Delhi HC Rejects Income Tax Notice U/S 148A Due to No Minimum Time Given

The Delhi High Court has refused a notice under section 148A of the Income Tax Act, 1961 towards the assessee favouring the ruling by observing that the department has not been able to furnish a minimum of 7 days to answer to this notice and driving serious prejudice to the assessee.

The department has passed an order under clause (d) of income tax section 148A eliminating the answer of the applicant on the basis of the applicant who has mentioned that the cash deposited in the bank account of the applicant was obtained from its members yet it has unable to furnish the list of members who has provided cash to the applicant.

The applicant Shri Sai Co-operative Thrift and Credit Society Ltd mentioned that the applicant was provided only three days time to furnish its answer to the notice and the list of members can not be furnished along with the answer as the time allotted to the applicant to make the list and file with the answer was not enough. They also said that the revenue has losses to provide a minimum duration of 7 days to the applicant to furnish its answer and hence not able to fulfil the eligibility of not less than 7 days as mentioned beneath clause (b) of Section 148A of the Act.

Justice Manmohan and Justice Dinesh Kumar Sharma see that under Section 148A(b) of the act, a minimum duration of 7 days needs to be allotted to the taxpayer to furnish its answer to the mentioned show-cause notice.

“Refusing the order, the court mentioned that 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. Consequently, this Court is of the view that in the present case not only there has been a violation of the mandatory time period stipulated under Section 148A(b) of the Act, but grave prejudice has been caused to the petitioner.”