Facts of the Case

As per the judgment (pages 1–2) :

  • The petitioner challenged:
    • Order dated 31.03.2022 under Section 148A(d)
    • Notice issued under Section 148 for AY 2018–19
  • A show cause notice under Section 148A(b) was issued on 17.03.2022 requiring reply by 24.03.2022.
  • The petitioner filed an adjournment request on 24.03.2022 citing:
    • Statutory compliance deadlines
    • Financial records stored in Uttarakhand requiring time for collation
  • Despite this, the Assessing Officer passed the impugned order stating that reply was considered and found meritless, which was factually incorrect.

Issues Involved

  1. Whether passing an order under Section 148A(d) without granting adequate time violates principles of natural justice?
  2. Whether the Assessing Officer is required to consider and respond to adjournment requests before proceeding?
  3. Scope and interpretation of opportunity under Section 148A(b) of the Income Tax Act.

 

Petitioner’s Arguments

  • The impugned order incorrectly records that a reply was filed and rejected.
  • The adjournment request was ignored without rejection.
  • There was a clear violation of principles of natural justice.
  • Adequate opportunity as mandated under Section 148A(b) was not granted.

 

Respondent’s Arguments

  • Filing of adjournment does not automatically entitle the petitioner to extension.
  • The request for adjournment was made on the last date.
  • The petitioner cannot presume adjournment would be granted.

 

Court’s Findings / Order

As observed on pages 3–4 :

  • Section 148A(b) allows:
    • Up to 30 days to respond
    • Further extension upon application
  • The respondent:
    • Neither rejected the adjournment request
    • Nor directed filing of reply within original timeline
  • Denial of adequate opportunity violates Section 148A(b).
  • Principles of natural justice were breached.

Final Order

  • Order under Section 148A(d) and notice under Section 148 were set aside.
  • Petitioner directed to file reply within 2 weeks.
  • Department directed to:
    • Re-open portal
    • Pass fresh reasoned order within 8 weeks
  • Court clarified it did not comment on merits.

Important Clarification

  • Time granted under Section 148A(b):
    • Can extend up to 30 days
    • May be further extended on request
  • Such time is excluded from limitation under Section 149.
  • Authorities must:
    • Explicitly accept or reject adjournment requests

Sections Involved

  • Section 148 – Income Escaping Assessment
  • Section 148A(b) – Show Cause Notice before Reassessment
  • Section 148A(d) – Order for Reassessment
  • Section 149 – Time Limit for Notice

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:2214-DB/58927052022CW68612022_183406.pdf

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