Facts of the Case

The petitioner challenged the reassessment proceedings initiated by the Income Tax Department on the ground that the notice issued under Section 148A(b) did not provide the minimum statutory period of seven days to file a reply.

The notice dated 10.03.2022 required the petitioner to submit a response on or before 17.03.2022. However, as per the petitioner, the notice was served on 12.03.2022 via email, thereby effectively reducing the response period below the statutory minimum.

Additionally, it was noted that the notice was initially dispatched without a digital signature and was reissued on 11.03.2022 with the corrected signature.

 Issues Involved

  1. Whether the mandatory minimum period of “not less than seven days” under Section 148A(b) was complied with.
  2. Whether the computation of the statutory period should be strictly interpreted.
  3. Whether non-compliance with the statutory time requirement renders reassessment proceedings invalid.

 Petitioner’s Arguments

  • The petitioner contended that the statutory requirement mandates at least seven clear days for filing a response.
  • The notice effectively provided less than seven days, violating Section 148A(b).
  • Reliance was placed on the Supreme Court judgment in Commissioner of Income-tax v. Braithwaite & Co. Ltd. (1993), arguing that the phrase “not less than” must be strictly construed to mean beyond the stipulated period.
  • It was further argued that the date of service and digital signing impacts the computation of limitation.

 Respondent’s Arguments

  • The Revenue contended that the notice was uploaded on the designated portal, and therefore, the petitioner’s reliance on email service was misplaced.
  • It was submitted that the notice was dispatched twice—first on 10.03.2022 (without digital signature) and again on 11.03.2022 (with digital signature).
  • The respondent argued that sufficient opportunity was granted to the petitioner.

 Court’s Findings / Order

  • The Court held that the statutory requirement of granting seven clear days was not fulfilled.
  • It observed that the notice required a reply by 17.03.2022, which did not satisfy the mandatory timeline.
  • The Court applied the ratio of Commissioner of Income-tax v. Braithwaite & Co. Ltd. and held that the expression “not less than seven days” must be interpreted strictly.
  • Consequently:
    • The order passed under Section 148A(d) dated 30.03.2022 was set aside.
    • The consequential notice under Section 148 dated 31.03.2022 was also quashed.
  • The Assessing Officer was granted liberty to initiate fresh proceedings in accordance with law after providing proper opportunity.

 Important Clarification by the Court

  • The Assessing Officer must:
    • Provide all relevant material/information before proceeding.
    • Grant adequate opportunity including two weeks’ time to respond.
    • Provide personal hearing to the petitioner.
  • The Court clarified that the observations made shall not affect the merits of the case.

 Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS14022023CW12432023_172926.pdf

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