Right To File Objection To SCN Can't Be Denied Due To One Day Delay: Delhi High Court
The Delhi High Court bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora ruled that the right to file an objection to the Show Cause Notice cannot be denied owing to a one-day delay. The petitioner has challenged the order passed under Section 148A (d) of the Income Tax Act, 1961 and the notice passed under Section 148 of the Income Tax Act. The petitioner was given...
The Delhi High Court bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora ruled that the right to file an objection to the Show Cause Notice cannot be denied owing to a one-day delay.
The petitioner has challenged the order passed under Section 148A (d) of the Income Tax Act, 1961 and the notice passed under Section 148 of the Income Tax Act.
The petitioner was given time till April 8, 2022, to reply to the show cause notice dated March 30, 2022. The order under Section 148A(d) was issued without taking the petitioner's request for adjournment or detailed response to the Show Cause notice into account.The order proceeded on the basis that the petitioner did not file any reply to the show cause notice.
The department contended that the adjournment request had not been filed within the stipulated time, i.e., till April 8, 2022. Therefore, the Assessing Officer was well within his right to pass the order under Section 148A (d) of the Income Tax Act.
The court observed that the petitioner has a right to get adequate time in accordance with the Income Tax Act to submit its reply.
"Section 148A(b) 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), which period may in fact be further extended upon an application made by the Assessee in this behalf, and such period given to the assessee is excluded in computing the period of limitation for issuance of notice under Section 148 of the Act in terms of the third proviso to Section 149 of the Act," the court said.
The court held that since the petitioner is a resident of the United States of America, the delay of one day in asking for an adjournment should not have led to the closure of the right to file a reply to the Show Cause Notice.
The court set aside the order passed under Section 148A (d) as well as the notice under Section 148 of the Income Tax Act. The court directed the department to pass a fresh reasoned order under Section 148A (d) after considering the reply filed by the petitioner in accordance with the law within eight weeks.
Case Title: Ernst & Young, US LLP Versus ACIT
Citation: 2022 LiveLaw (Del) 586
Dated: 20.05.2022
Counsel For Petitioner: Sr. Advocate S. Ganesh
Counsel For Respondent: Advocate Puneet Rai