Statutory minimum reply time under Section 148A(b) must be given; deficient notice vitiates reassessment and penalty proceedings.

Section 148A(b) requires a show-cause notice granting at least seven days, and up to thirty days, to file a reply unless extended on application. A notice issued with less than the statutory minimum period was held invalid because it prejudiced the assessee and breached natural justice. As the foundational notice was defective, the consequential reassessment proceedings could not be sustained. The consequential order, reassessment notice, assessment order, and penalty notices were therefore set aside.

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Issues: Whether notices issued under Section 148A(b) of the Income-tax Act, 1961 were vitiated for failure to grant the statutory minimum time of not less than seven days for reply, and whether the consequential order, reassessment notice, assessment order, and penalty notices were liable to be set aside.

Analysis: Section 148A(b) mandates service of a show-cause notice granting an opportunity of hearing within a period of not less than seven days and not exceeding thirty days from the date of issue, unless extended on application. The notice in question afforded less than the minimum period, and the proceedings were initiated without objections being received. This resulted in prejudice and violated the principles of natural justice. Once the foundational notice was invalid, the consequential proceedings could not survive.

Conclusion: The notices under Section 148A(b) were invalid, and the consequential order, notice, assessment order, and penalty notices were set aside in favour of the assessee.

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