One Day Delay to reply SCN cannot led to closure of right to file a reply

Ernst and Young U.S. LLP Vs ACIT (Delhi High Court)

Petitioner-Assessee has a right to get adequate time in accordance with the Act to submit its reply. Section 148A(b) 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), which period may in fact be further extended upon an application made by the Assessee in this behalf, and such period given to the assessee is excluded in computing the period of limitation for issuance of notice under Section 148 of the Act in terms of the third proviso to Section 149 of the Act.

 Since, in the present case, the Petitioner-Assessee is a resident of the United States of America, this Court is of the view that the delay of one day in asking for an adjournment should not have led to closure of the right to file a reply to the Show Cause Notice.

Consequently, the impugned order passed under Section 148A(d) as well as the notice under Section 148 of the Act, both dated 13^th April, 2022, are quashed and the Respondent No.1 is directed to pass a fresh reasoned order under Section 148A(d) after considering the reply dated 13^th / 14^th April, 2022 filed by the Petitioner in accordance with law within eight weeks.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

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