Impugned order dated 6th April, 2022 under Section 148A(d) and notice under Section 148 of the the Income Tax Act, 1961 are quashed: High Court Of Delhi
The impugned order dated 6th April, 2022 under Section 148A(d) and notice under Section 148 of the Act are quashed was upheld by the High Court Of Delhi through the learned bench led by HON’BLE MR. JUSTICE MANMOHAN and HON’BLE MR. JUSTICE DINESH KUMAR SHARMA in the case of SHRI SAI CO-OPERATIVE THRIFT AND CREDIT SOCIETY LTD. Vs INCOME TAX OFFICER, WARD 43-6 (W.P.(C) 7385/2022) on 12th May, 2022.
Brief facts of the case are that present writ petition was filed challenging the Notice dated 22nd March, 2022 issued under Section 148A(b) of the Income Tax Act, 1961 and notice issued under Section 148 of the Act dated 7th April, 2022.
Learned counsel for the Petitioner stated that the Respondent has issued a notice to petitioner-society under clause (b) of Section 148A of the Act on 22nd March, 2022 on the ground that the Petitioner had made cash deposits of Rs.92,11,800/- in its bank accounts but had not filed its Income Tax Return. He stated that the Petitioner was asked to furnish a reply to the said notice on or before 25th March, 2022. He further stated that the Petitioner duly replied to the said notice on 25th March, 2022 clearly explaining that all the cash deposited by the Petitioner was received from the members of the society, for which cash receipts had been issued to the members and proper record in this regard had been maintained. The respondents passed the order dated 6th April, 2022 under clause (d) of Section 148A rejecting the reply of the Petitioner on the ground that although the Petitioner had stated that the cash deposited in the bank account of the Petitioner was received from its members yet it had failed to provide the list of members who had given cash to the Petitioner. He emphasises that the revenue has failed to give a minimum time of seven days to the petitioner to file its reply and, thus, failed to fulfil the criterion of ‘not less than seven days” as provided in clause (b) of Section 148A of the Act.
Mr.Sunil Agarwal, learned counsel for the revenue, accepted notice. He, on instructions, stated that the Assessing Officer did not issue any corrigendum extending the time limit for filing the reply as no such request was made. He further states that as the said reply was filed within the time stipulated in the notice dated 22nd March, 2022, no prejudice has been caused to the petitioner.
The Court observed that “under Section 148A(b) of the Act, a minimum time of seven days has to be granted to the assessee to file its reply to the said show cause notice. In the present case, though the petitioner responded to the show cause notice, yet it could not provide all the relevant details and documents, as the time period of three days to respond to the show cause notice was inadequate.”
In view of facts and circumstances, court held that the impugned order dated 6th April, 2022 under Section 148A(d) and notice under Section 148 of the Act are quashed. If the law permits the respondent/revenue to take further steps in the matter, it shall be at liberty to do so.
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Written by- Riya Singh, Legal Intern, Prime Legal