No Undue Delay in Submitting Reply to SCN: Himachal Pradesh HC sets aside u/s 143 (3) of Income Tax Act and remits matter back to PCIT [Read Order]

The Himachal Pradesh High Court has set aside the order under Section 143(3) of the Income Tax Act, 1961, citing no undue delay in submitting the reply to the Show Cause Notice, and has remitted the matter back to the Principal Commissioner of Income Tax ( PCIT ).

The petitioner is a private limited company engaged in the manufacturing of pharmaceuticals etc. in the name and style of “M/s Ultra Drugs Private Limited” and it is an Assessee under the Income Tax Act, 1961.

On 17.10.2022, a return under Section 139(1) of the Income Tax Act for the assessment year 2022-23 had been filed by the petitioner. 3. On 01.06.2023 a notice under Section 143(2) of the Income Tax Act was issued, informing the petitioner that his case was selected for scrutiny under the CASSS.

Thereafter, notices under Sections 142(1) of the Income Tax Act were issued to the petitioner on 31.10.2023 and 16.11.2023. Detailed reply was furnished by the petitioner on 28.11.2023 to the same. Again, notices were issued on 04.01.2024, 17.03.2024 and 18.03.2024 to the petitioner under Section 142(1) of the Income Tax Act, which were compiled by the petitioner.

On 24.03.2024, which was Sunday, the petitioner alleges that the Assessing Officer closed the e-filing portal and restricted the petitioner to file the response; that on 24.03.2024 at 11:39 p.m. response/submission to the show-cause notice was submitted to the National Faceless Assessment Centre by the petitioner through email, which was reiterated in a subsequent email sent on the following day i.e. 25.03.2024 as a reminder, stating specifically that the Income Tax portal was closed, and the same was transferred by the National Faceless Assessment Centre to the concerned Assessing Officer.

Mr. Vishal Mohan representing the petitioner contended that time granted for submitting reply to the show-cause notice dt. 20.03.2024 of a period less than four days is arbitrary, and sufficient time ought to have been granted by respondent no.2 to enable the petitioner to submit its reply to the show-cause notice dt. 20.03.2024. He further pointed out that the petitioner was ready with the reply and had filed the same on the same day. i.e. 24.03.2024 at 11:39 p.m. through the National Faceless Assessment Centre, but in view of the fact the Assessing Officer had closed the e-filing portal by then on the ground that the petitioner had not submitted the reply by 15:45 p.m. on 24.04.2023, the same could not be uploaded.

This division bench comprising Justice M. S. Ramachandra Rao and Justice Jyotsna Rewal Dua opinion that the time granted for submitting reply to the petitioner is extremely short, and when there was no undue delay on the part of the petitioner in submitting the reply and it had submitted the reply on the date fixed i.e. 24.03.2024, though sometime after 15:45 p.m. the same ought not to have been ignored by PCIT and, the impugned order could not has been passed by him.

Further convinced that reasonable time to the petitioner had not been granted by PCIT in the show-cause notice dt. 20.03.2024 to reply to the same and, since there is no undue delay on the part of the petitioner in submitting its reply, which admittedly it did on 24.03.2024, the impugned order dt. 27.03.2024 passed by PCIT was set aside, and the matter is remitted back to PCIT to consider the reply submitted by the petitioner on 24.03.2024 and 25.03.2024 to the show-cause notice dt. 20.03.2024 and then pass a reasoned order in accordance with law and communicate the same to the petitioner. The petitioner may also be afforded an opportunity of being heard by respondent no.2. Accordingly, writ petition was allowed.

To Read the full text of the Order CLICK HERE

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