Assessee Can't Indefinitely Seek Time In Response To SCN: Kerala High Court

The Kerala High Court has held that the assessee cannot indefinitely seek time in response to a show cause notice.

The bench of Justice Dinesh Kumar Singh has observed that petitioners cannot go on asking for a time one after another in response to the show cause notice issued one after another. There is no violation of the principles of natural justice.

Information was flagged in the case of the petitioner or assessee in accordance with the risk management strategy formulated by the Central Board of Direct Taxes. The assessment in the case was reopened by issuing a notice under Section 148.

The assessment order has been passed, and total taxable income has been determined to be Rs. 6,48,29,2113 with the addition of Rs. 6,36,70,393 under Section 69A of the Income Tax Act. The demand notice for payment of tax was also annexed to the assessment order, and a direction was issued to initiate penalty proceedings.

The petitioner submitted that the Show Cause Notice issued to the petitioner on May 3, 2023, asking the petitioner to file a reply by May 6, 2023, was responded to by the petitioner, and the request for time to file the reply was made up to May 20, 2023. The petitioner was issued a notice on May 17, 2023, and the petitioner asked for a further time to June 7, 2023. In the meantime, the assessment order was passed on May 24, 2023.

The department contended that the petitioner did not file a reply even up to the extended time asked by him up to May 20, 2023. Though the second Show Cause Notice was issued again, the petitioner asked for time and did not file a reply.

The court held that the petitioner did not file a reply, and therefore, the authority was well within its power not to grant further time for the petitioner.

Counsel For Petitioner: Abraham Joseph Markos

Counsel For Respondent: Christopher Abraham

Citation: 2023 LiveLaw (Ker) 12

Case Title: Shaju Pachelil Pathrose Versus Additional/Joint/Deputy/Assistant Commissioner Of Income Tax

Case No.: WP(C) No. 20400 Of 2023

Click Here To Read The Order