Minimum Notice Period: less-than-seven-day show-cause notices vitiate reassessment and penalty actions, resulting in quashing of those proceedings.

Section 148A(b) requires a show-cause notice to afford the assessee a minimum period of not less than seven days to reply; where the notice supplies a shorter period the procedural mandate is breached and the assessing officer cannot validly proceed. Consequent actions taken pursuant to such defective notices - including decision under Section 148A(d), issuance of notice under Section 148, reassessment under Section 147 read with Section 144B, and penalty proceedings under Section 271AAC(1) - are vitiated and liable to be quashed for non-compliance with the minimum notice requirement.

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Issues: Whether notices issued under Section 148A(b), Section 148A(d), Section 148, Section 147 r.w.s. 144B and penalty under Section 271AAC(1) of the Income-tax Act, 1961 are liable to be quashed for failure to provide the minimum statutory notice period of not less than seven days as required under Section 148A(b) of the Income-tax Act, 1961.

Analysis: Section 148A(b) of the Income-tax Act, 1961 requires that a notice to show cause be served within such time as may be specified in the notice, being not less than seven days from the date on which the notice is issued; the provision mandates that the assessee be given an opportunity to respond before initiation of notice under Section 148. The statutory scheme further contemplates that the assessing officer shall consider the reply and decide under Section 148A(d) whether issuance of a notice under Section 148 is warranted. Where the show-cause notice supplies a period shorter than the statutorily prescribed minimum, the procedural mandate of Section 148A(b) is not complied with and consequent actions taken pursuant to such defective notice (including issuance of notice under Section 148, orders under Section 148A(d), reassessment under Section 147 read with Section 144B, and consequential penalty proceedings) stand vitiated. The matter is governed by the previously decided Division Bench authority which held that a notice issued on 20.03.2022 calling for a reply by 25.03.2022 did not meet the minimum seven-day requirement and was therefore contrary to law; where an identical compliance defect exists in the impugned notices and consequential orders, the same principle applies.

Conclusion: The impugned notices issued under Section 148A(b) dated 20-03-2022, notices and orders under Section 148A(d) and Section 148 dated 27-04-2022, the order under Section 147 read with Section 144B dated 06-12-2023, and the penalty order under Section 271AAC(1) dated 20-06-2024 are quashed for failure to provide the minimum statutory notice period of not less than seven days as required by Section 148A(b) of the Income-tax Act, 1961.

Ratio Decidendi: A notice under Section 148A(b) of the Income-tax Act, 1961 that affords less than the minimum period of not less than seven days to the assessee is procedurally non-compliant and vitiates any subsequent action taken pursuant to that defective notice.

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