Court sets aside ex-parte order citing procedural flaws -19

The court set aside the ex-parte order passed under Section 148A(d) of the Income Tax Act, 1961 for the Assessment Year 2018-19, due to procedural irregularities in the notice issuance and inadequate response time provided to the petitioner. The matter was remanded back to the Assessing Officer for a fresh decision within eight weeks, with instructions for the petitioner to re-file their reply within a week. The court emphasized the importance of granting a minimum seven-day response period to the assessee and clarified that its decision did not address the merits of the underlying dispute, leaving all parties' rights and contentions open.

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Issues:
Challenge to notice under Section 148A(b) of the Income Tax Act, 1961; Order under Section 148A(d) of the Act; Adequacy of response time; Ex-parte order; Compliance with statutory period; Remand for fresh decision.

Analysis:

The petitioner challenged a notice issued under Section 148A(b) of the Income Tax Act, 1961, dated 14th March, 2022, along with the subsequent order under Section 148A(d) of the Act and another notice issued under Section 148 of the Act for the Assessment Year 2018-19. The petitioner contended that the initial notice was received via email as an encrypted file, rendering it inaccessible. The petitioner promptly informed the respondent about this issue on the same day. However, the physical copy of the notice was received through speed post on 17th March, 2022, allowing insufficient time for response as mandated by Section 148A(b) of the Act. Despite the petitioner's request for an adjournment, the respondent proceeded to pass the order ex-parte under Section 148A(d) of the Act, without considering the communication regarding the accessibility issue.

In light of the petitioner's submissions, the court referred to a previous decision and emphasized the importance of granting a minimum period of seven days for the assessee to respond to a show cause notice under Section 148A(b) of the Act. The respondent, represented by learned counsel, acknowledged the procedural irregularities and expressed willingness for the matter to be remanded back to the Assessing Officer for a fresh decision in compliance with the law. Consequently, the court set aside the impugned order passed under Section 148A(d) of the Act for the assessment year 2018-19 and directed the Assessing Officer to issue a fresh reasoned order within eight weeks, taking into account the petitioner's reply, which was instructed to be re-filed within a week. Importantly, the court clarified that its decision did not delve into the merits of the underlying controversy, leaving the rights and contentions of all parties open. With these directions, the writ petition was disposed of.

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