The Division Bench of the Delhi High Court in the case of Bird Worldwide Flight Services (L.) Pvt. Ltd. vs Deputy Commissioner of Income Tax Circle 4(2), Delhi consisting of Justices Manmohan and Manmeet Pritam Singh Arora observed that Petitioner has a right to get adequate time under Section 148A of the Income Tax Act, 1961 to respond to the show cause notice.
Facts
This writ petition was filed challenging the order passed u/s 148A(d) of the Income Tax Act, 1961 (‘the Act’) and the Notice issued u/s 148 of the Act for the Assessment Year (‘AY’) 2017-18. In the present case the initial notice u/s 148A(b) of the Act was issued on 18th May, 2022. He stated that the Petitioner asked for the material relied upon vide letter dated 01st June, 2022. He, however, stated that the material forming the basis of allegation of escapement of income was served on the Petitioner only on 19th July, 2022 with a direction to respond by 21st July, 2022.
Contentions Made
Petitioner: Relying on Union of India vs. Ashish Agarwal, he stated that though the Petitioner filed for an adjournment on 21st July, 2022 for additional ten days, yet the reply was filed within the additional time on 26th July, 2022. He contended that the same was not taken into account while passing the impugned order dated 29th July, 2022.
Observations of the Court
The Bench opined that the Petitioner has a right to get adequate time u/s 148A of the Act to respond to the show cause notice:
“It is pertinent to mention that Section 148A(b) of the Act permits the Assessing Officer to suo moto provide up to thirty days’ period to an assessee to respond to the show cause notice issued under Section 148A(b) of the Act, which period may in fact be further extended upon an application made by the Assessee in this behalf.”
“It is settled law that an assessee cannot be penalised or suffer adverse consequences for default on the part of the respondent-revenue.”
Relying on Meenu Chaufla Vs. ITO it held that in such cases as above, the mandate of Section 148A(c) is violated.
Judgment
The impugned order and the notice u/s 148 of the Act, both dated 29th July, 2022 for the AY 2017-18 were set aside and the matter was remanded back to the AO for a fresh decision after considering the reply dated 26th July, 2022 filed by the Petitioner within four (04) weeks.
Case: Bird Worldwide Flight Services (L.) Pvt. Ltd. vs Deputy Commissioner of Income Tax Circle 4(2), Delhi
Citation: W.P.(C) 12654/2022 & CM APPL. 38423/2022
Bench: Justice Manmohan, Justice Manmeet Pritam Singh Arora
Decided on: 2nd September 2022
Read Judgment @Latestlaws.com
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