Right to file an objection to a Show Cause notice cannot be denied due to one day delay to assessee living outside India: Delhi High Court

The Delhi High Court ruled that the assessee who lives outside of India cannot be denied his right to file an objection to the Show Cause notice just because there was a one-day delay in requesting an adjournment through the Division Bench of Justices Manmohan and Manmeet Pritam Singh Arora in the case of Ernst and Young U.S. LLP v. ACIT (W.P.(C) 7791/2022 & CM APPLs.23857-23858/2022)


The order was issued under Section 148 A (d) of the Income Tax Act of 1961, and the notice was issued under Section 148 of the Act. The petition had been filed in challenge to the order.

According to the petitioner’s counsel, the impugned order was made without taking into account the petitioner’s request for an adjournment from 9 April 2022, as well as their full response to the show cause notice from 12 April 2022 and 13 April 2022. Respondents-Revenue claimed that because the adjournment request had not been submitted by the deadline, the Assessing Officer had every authority to issue the order in accordance with Section 148A(d) of the Act.


The Court decided that the Petitioner-Assessee had a right to adequate time to make its reply in conformity with the Act. 

The third proviso of Section 149 of the Act states that the period given to the assessee is excluded from the computation of the period of limitation for issuing notice under Section 148 of the Act. Section 148A(b) allows the Assessing Officer to suo moto provides an assessee with up to thirty days to respond to the Show Cause Notice issued under Section 148A(b). This period may actually be further extended upon an application made by the assessee in this regard.

Since the Petitioner-Assessee, in this case, was a citizen of the United States, this Court felt that the one-day delay in requesting an adjournment should not have prevented the Petitioner-Assessee from replying to the Show Cause Notice.

The Bench overturned the impugned orders and instructed respondent 1 to issue a new, reasoned order in accordance with Section 148 A(d) after taking the petitioner’s reply into account.

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