Facts of the Case

The petitioner, Anuj Ghuliani, filed a writ petition under Articles 226 and 227 of the Constitution of India seeking quashing of the notice dated 21.08.2024 issued under Section 148A(b) of the Income-tax Act, 1961 for Assessment Year 2018–19, the order dated 31.08.2024 passed under Section 148A(d), the consequential notice dated 31.08.2024 issued under Section 148, and the approval dated 30.08.2024 granted under Section 151 of the Act.

The Assessing Officer issued a show cause notice under Section 148A(b) granting the petitioner only five days to submit a reply, which was less than the statutory minimum period of seven days. Upon expiry of the five-day period, the income-tax portal did not permit filing of any response. The petitioner personally approached the department and, on instructions of officials, submitted his reply by email on 27.08.2024, which was within the statutory seven-day period.

Despite the reply having been submitted, the specified authority recorded that no reply had been filed, and the Assessing Officer proceeded to pass an order under Section 148A(d) and issue a notice under Section 148 without considering the petitioner’s response.

Issues Involved

Whether reassessment proceedings can be sustained when the Assessing Officer grants less than the mandatory period prescribed under Section 148A(b), ignores the reply submitted within the statutory time, and proceeds to issue notice under Section 148 in violation of principles of natural justice.

Petitioner’s Arguments

The petitioner contended that granting only five days to respond to the notice under Section 148A(b) was in clear violation of the statutory mandate of seven days. It was argued that denial of adequate time and non-consideration of the reply submitted within the permissible period vitiated the entire reassessment proceedings. The petitioner further submitted that recording that no reply was filed was factually incorrect, rendering the approval under Section 151 unsustainable.

Respondents’ Arguments

The Revenue fairly submitted that the petitioner could be granted one more opportunity to respond to the notice under Section 148A(b) and did not oppose remand of the matter to the Assessing Officer for fresh consideration in accordance with law.

Court Order / Findings

The Delhi High Court held that the impugned order passed under Section 148A(d) and the consequential notice issued under Section 148 could not be sustained. The Court observed that Section 148A(b) mandates granting a minimum of seven days to respond and that the Assessing Officer had admittedly granted only five days.

The Court further noted that the petitioner had submitted his reply within the statutory period, albeit through email, and that the authorities erred in proceeding on the incorrect premise that no reply had been filed. The Court held that failure to consider the petitioner’s reply amounted to violation of principles of natural justice.

In view of the admitted factual position and the fair stand taken by the Revenue, the Court set aside the impugned order and notice and directed reconsideration of the matter.

Important Clarification

The Court clarified that strict compliance with the statutory requirement under Section 148A(b) of granting a minimum of seven days is mandatory. Any reassessment order passed without granting such time or without considering the assessee’s reply is vitiated. Further, any fresh notice under Section 148 must be preceded by proper approval from the competent authority as required under the Act.

Final Outcome

The writ petition was allowed. The Delhi High Court set aside the order dated 31.08.2024 passed under Section 148A(d) and the notice dated 31.08.2024 issued under Section 148 for Assessment Year 2018–19. The Assessing Officer was directed to consider the reply filed by the petitioner on 27.08.2024 and pass an appropriate order within four weeks. The writ petition along with pending applications was disposed of accordingly.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1770016495_ANUJGHULIANIVsINCOMETAXOFFICERANR..pdf

 

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