Facts of the Case

The petitioner challenged the validity of:

  • Notice issued under Section 148A(b) dated 22.03.2022
  • Order passed under Section 148A(d)
  • Reassessment proceedings initiated under Section 148 for AY 2018–19

The primary grievance was that the petitioner was granted only three days to respond to the show cause notice issued under Section 148A(b), whereas the law mandates a minimum of seven days.

 Issues Involved

  1. Whether providing only three days to respond to a notice under Section 148A(b) violates statutory requirements.
  2. Whether such inadequate opportunity renders subsequent proceedings under Section 148 invalid.

 Petitioner’s Arguments

  • The petitioner contended that:
    • The notice provided insufficient time (3 days) to respond.
    • As per statutory mandate, minimum 7 clear days must be granted.
    • The order passed under Section 148A(d) based on such defective notice is legally unsustainable.

 Respondent’s Arguments

  • The Revenue accepted that:
    • The statute requires a minimum of seven clear days for response under Section 148A(b).
  • However, proceedings were initiated based on the notice already issued.

 Court’s Findings / Order

  • The Court observed:
    • The notice dated 22.03.2022 required a response by 25.03.2022, effectively granting only three days.
    • This is contrary to the statutory requirement of granting at least seven days.
  • The Court relied on precedent:
    • Indus Valley Partners India Pvt. Ltd. v. ACIT (W.P.(C) 1243/2023)
  • Final Order:
    • Impugned notice under Section 148A(b) and order under Section 148A(d) were set aside.
    • The Assessing Officer was granted liberty to proceed afresh in accordance with law.

 Important Clarification

  • The judgment reinforces that:
    • Minimum 7 clear days is mandatory under Section 148A(b).
    • Any deviation results in violation of principles of natural justice.
    • Proceedings based on such defective notice are liable to be quashed.

 Legal Provisions Involved

  • Section 148 – Income escaping assessment
  • Section 148A(b) – Opportunity of being heard before issuance of notice
  • Section 148A(d) – Order deciding whether notice under Section 148 should be issued

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS15032023CW31592023_181519.pdf

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