Court quashes tax order & notice violating response time; petitioner retains rights The Court quashed the order issued under Section 148A(d) of the Income Tax Act, 1961, and the subsequent notice under Section 148 due to inadequate time ...
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Court quashes tax order & notice violating response time; petitioner retains rights
The Court quashed the order issued under Section 148A(d) of the Income Tax Act, 1961, and the subsequent notice under Section 148 due to inadequate time granted for the petitioner to respond, violating the statutory seven-day period. The respondent was given liberty to proceed lawfully, while the petitioner retained the right to seek remedies as per the law. The writ petition was disposed of accordingly.
Issues: Challenging Notice under Section 148A(b) of the Income Tax Act, 1961, rejection of reply under Section 148A(d), inadequate time granted to file response.
Analysis: The petitioner challenged a Notice dated 22nd March, 2022, issued under Section 148A(b) of the Income Tax Act, 1961, along with a consequential order dated 06th April, 2022 issued under Section 148A(d) and another notice issued under Section 148 of the Act dated 7th April, 2022. The Respondent alleged that the petitioner made cash deposits without filing Income Tax Returns. The petitioner responded by explaining that the cash deposits were received from society members, supported by proper receipts and audit records. However, the Respondent rejected the reply under Section 148A(d) for not providing a list of members who deposited cash. The petitioner argued that the three-day response time was insufficient to compile the list, violating the mandatory seven-day period under Section 148A(b) and causing prejudice.
The Court noted that Section 148A(b) mandates a minimum seven-day period for the assessee to respond to a show cause notice. In this case, the petitioner could not provide all relevant details within the inadequate three-day period, leading to a violation of the statutory time limit and causing significant prejudice. Consequently, the Court quashed the impugned order dated 6th April, 2022 under Section 148A(d) and the notice under Section 148 of the Act. The respondent/revenue was granted liberty to take further steps if permitted by law, with the petitioner retaining the right to seek remedies in accordance with the law. The writ petition was disposed of with this direction.
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