Facts of the Case

The present writ petition was filed by the petitioner challenging the order dated 30th March 2022 passed under Section 148A(d) of the Income Tax Act, 1961 and the consequential notice dated 31st March 2022 issued under Section 148 of the Act for Assessment Year 2018–19.

A show cause notice under Section 148A(b) was issued to the petitioner on 17th March 2022 requiring a response by 24th March 2022. The petitioner filed an adjournment application on 18th March 2022 seeking time till 27th March 2022.

Despite this, the online portal for submission was closed on 24th March 2022. The petitioner thereafter submitted the reply via email on 27th March 2022 to the Assessing Officer.

However, the Assessing Officer proceeded to pass the impugned order under Section 148A(d) without considering the said reply.

Issues Involved

  1. Whether the Assessing Officer is obligated to consider the reply submitted by the assessee before passing an order under Section 148A(d) of the Income Tax Act, 1961.
  2. Whether closure of the submission portal without deciding the adjournment request violates principles of natural justice.
  3. Whether non-consideration of reply amounts to violation of statutory mandate under Section 148A(c).

Petitioner’s Arguments

  • The petitioner contended that adequate opportunity to respond was not provided.
  • It was submitted that an adjournment request was duly filed seeking extension of time.
  • The reply was submitted via email on 27th March 2022 since the portal was closed.
  • The impugned order was passed without considering the reply, thereby violating Section 148A(c), which mandates consideration of the assessee’s response.

Respondent’s Arguments

  • The respondent argued that only seven days’ time had been granted to the petitioner to respond.
  • It was contended that the Assessing Officer was within his rights to close the online portal.
  • Filing of an adjournment application does not automatically entitle the petitioner to extension of time.

Court’s Findings / Order

  • Section 148A(b) permits the Assessing Officer to grant up to thirty days to the assessee to respond, which may also be extended upon request.
  • The petitioner had filed an adjournment request promptly, which was neither accepted nor rejected by the respondent.
  • The reply submitted via email was available on record before passing the impugned order.
  • Section 148A(c) uses the expression “shall”, thereby making it mandatory for the Assessing Officer to consider the reply before passing an order under Section 148A(d).
  • The impugned order dated 30th March 2022 under Section 148A(d) and notice dated 31st March 2022 under Section 148 were set aside.
  • The respondent was directed to consider the petitioner’s reply dated 27th March 2022 and pass a fresh reasoned order within eight weeks.
  • The Court clarified that it had not expressed any opinion on the merits of the case.

 

Important Clarification

  • The judgment emphasizes that consideration of reply under Section 148A(c) is mandatory and not procedural formality.
  • Even if the reply is submitted through alternate means such as email, it must be considered if it is available on record.
  • Failure to decide an adjournment request and proceeding ex parte may vitiate proceedings.

Sections Involved

  • Section 148 – Income escaping assessment
  • Section 148A(b) – Show cause notice before issuance of notice
  • Section 148A(c) – Consideration of reply (mandatory)
  • Section 148A(d) – Order for issuance of notice
  • Section 149 – Time limits for notice

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:2113-DB/MMH27052022CW78542022_190545.pdf

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