Case Law Details
Sri Gopal Store Vs AO (Orissa High Court)
In the recent case of Sri Gopal Store vs AO, the Orissa High Court established a vital precedent for faceless assessment proceedings under the Income Tax Act, 1961. The court ruled that the assessee should be provided a minimum of seven days to comply with a show cause notice (SCN), following guidelines from the Central Board Direct Taxes (CBDT).
Analysis: In this case, Sri Gopal Store, the petitioner, was issued a show cause notice on 12th December, 2022, requiring a response by 16th December, 2022. The petitioner argued that this did not adhere to CBDT guidelines, which mandate a minimum notice period of seven days unless the assessment period is nearing its expiry. The AO countered that the assessee had been given several opportunities and sufficient time to comply but had failed to do so. Furthermore, the AO argued that while the compliance date was 16th December, the scrutiny order was only passed on 23rd December, 2022, giving the assessee 11 days to comply.
Upon review, the Orissa High Court ruled in favour of the petitioner, noting that the revenue authority was obliged to provide a reasonable timeframe for the assessee to respond to the show cause notice. The court further observed that there was no justification for curtailing the response time.
Conclusion: The judgment in the Sri Gopal Store vs AO case by the Orissa High Court reinforces the importance of adherence to procedural guidelines in tax assessment proceedings. By ruling that a minimum of seven days must be given to comply with a show cause notice, the court underscored the need for fairness and reasonableness in tax procedures. This verdict is a significant step towards enhancing transparency and predictability in faceless assessments under the Income Tax Act, 1961.
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