Masood Gulam Vs ITO (Karnataka High Court)
The petitioner filed a writ petition under Article 226 of the Constitution seeking to quash the order passed under Section 148A(d) of the Income-tax Act dated 29.03.2023, the notice issued under Section 148 dated 29.03.2023, and the assessment order passed under Sections 147 read with 144 dated 24.03.2024 for Assessment Year 2019-20. The petitioner also sought consequential reliefs, including withdrawal of the assessment order and prohibition against further action pursuant to the impugned proceedings.
The petitioner contended that the notice dated 21.03.2023 issued under Section 148A(b) required a response within six days. According to the petitioner, Section 148A(b) prescribes a minimum period of seven days for furnishing a reply. It was argued that the notice was therefore illegal, invalid and inoperative, rendering all subsequent proceedings, including the order under Section 148A(d), the notice under Section 148 and the assessment order, liable to be quashed. The petitioner submitted that despite this statutory defect, the respondent proceeded to complete the reassessment by passing the assessment order dated 24.03.2024.
The respondent supported the impugned notices and assessment order and contended that the writ petition was without merit and liable to be dismissed.
The High Court examined the statutory requirement under Section 148A(b) and referred to the judgment of the Bombay High Court in Mukesh J. Ruparel Vs. Income Tax Officer, Ward 27(2)(1) — W.P. No.15268/2023 dated 25.07.2023. The Bombay High Court had held that Section 148A(b) mandates that an assessee must be given not less than seven days and not more than thirty days to respond to a show cause notice. The judgment also referred to the CBDT Guidelines dated 01.08.2022, which similarly contemplate a response period of seven to thirty days. It held that failure to provide the statutory minimum period renders the notice invalid. The Bombay High Court further observed that the notice before it was liable to be quashed because only five days had been granted for filing a reply. The judgment also noted other deficiencies, including non-consideration of the assessee’s objection regarding the statutory notice period, incorrect approval under Section 151 relating to another assessee, omission to specify the quantum of escaped income in the order under Section 148A(d), and a factually incorrect observation that the affidavit submitted by the petitioner’s brother was not notarised. Consequently, the Bombay High Court quashed the notice under Section 148A(b), the order under Section 148A(d), and the consequential notice under Section 148.
