A division bench of the Delhi High Court has held that the assessee has the right to get adequate time to respond to the show-cause notice under section 148A(b) of the Income Tax Act, 1961.
The assessee, M/s Bird World Wide Flight Services (I) Pvt Ltd, received the initial notice under 148A(b) of the Act was issued on 18th May, 2022. The Petitioner asked for the material relied upon vide letter dated 01st June, 2022. However, the material forming the basis of allegation of escapement of income was served on the Petitioner only on 19th July, 2022 with a direction to respond by 21st July, 2022. The petitioner contended that a period of two weeks would be granted to the Assessee to file the response under Section 148A(b) of the Act and the same shall be reckoned from the date on which the ‘Information’ and the ‘Material’ forming the basis of purported action, is served on the Assessee. He states that though the Petitioner filed for an adjournment on 21st July, 2022 for additional ten days, yet the reply was filed within the additional time on 26th July, 2022.
A bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that “Having perused the paper book, this Court is of the view that the Petitioner has a right to get adequate time under Section 148A of the Act to respond to the show cause notice. It is pertinent to mention that Section 148A(b) of the Act permits the Assessing Officer to suo moto provide up to thirty days’ period to an assessee to respond to the show cause notice issued under Section 148A(b) of the Act, which period may in fact be further extended upon an application made by the Assessee in this behalf.”
Quashing the order with a direction to the AO to re-consider the matter, the Court held that “This Court in Meenu Chaufla Vs. ITO, WP(C) No. 7854 of 2022 dated 27th May 2022, has held that in such cases the mandate of Section 148A(c) is violated as it casts a duty on the AO, by using the expression ‘shall’, to consider the reply of the Assessee in response to notice under Section 148A(b), before making an order under Section 148A(d) of the Act.”
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