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Facts
The Assessee challenged an assessment order for A.Y. 2018-19, which included additions for unexplained money (Section 69A) and interest on FDR. An appeal to the Ld. Commissioner (NFAC) was dismissed due to non-compliance by the Assessee. Subsequently, the Assessee challenged the reopening proceedings, specifically arguing that the notice under Section 148A(b) was invalid as it provided only 6 days to respond, instead of the minimum 7 clear days required.
Held
Relying on High Court precedents, the Tribunal found that the notice issued under Section 148A(b) granted insufficient time for compliance. Consequently, the Tribunal quashed the initial notice under Section 148A(b), the subsequent notice under Section 148, and the resultant assessment order.
Key Issues
Whether reassessment proceedings initiated under Section 147/148 are valid if the notice issued under Section 148A(b) grants less than the statutory minimum of 7 clear days for the assessee to respond.
Sections Cited
250, 147, 144B, 69A, 148A(b), 148, 34(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH “SMC”, NAGPUR
Before: SHRI NARENDER KUMAR CHOUDHRY
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 28.03.2025, impugned herein, passed by the National Faceless Appeal Center (NFAC) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2018- 19.
Admittedly, in the instant case, though the Assessee challenged the assessment order dated 28.02.2023 u/s 147 r.w.s. 144B of the Act, whereby additions of Rs.11,03,500/- being unexplained u/s 69A of the Act and Rs.56,666/- as unexplained interest accrued on FDR have been made, by filing first appeal before the Ld. Commissioner, however, despite of affording opportunities of being heard, eventually made no compliance and therefore, the Ld. Commissioner dismissed the appeal of the Assessee, affirming the aforesaid additions.
The Assessee, being aggrieved, challenged the reopening of the proceedings u/s 147 of the Act issuing notice dated 31.03.2022 u/s 148 of the Act. The Ld. Counsel for the Assessee has drawn attention of this Court to page no.78 which is a notice dated 23.03.2022 u/s 148A(b) of the Act, according to which the Assessee was given opportunity to submit the response with supporting documents electronically in e-proceeding facility on or before 29.03.2022, meaning thereby clear six days were provided to reply to the said notice and therefore the Ld. Counsel Shri Kapil Hirani has claimed that impugned notice alongwith assessment order passed in pursuance thereto, is liable to be quashed in view of following judgments such as :
By the Hon’ble Jurisdictional Bombay High Court in the case of Samadha Corporation Vs. Income Tax Officer, Ward 5(3) Nagpur and another WP No.2154 of 2022 (Bombay–HC) decided on 20.09.2022 wherein the Hon’ble High Court has also dealt with the provision of section 148A(b) of the Act, which requires grant of minimum 7 days’ time to the Assessee for filing of its reply to the show cause notice and consequently set aside the order passed u/s 148A(b) of the Act by disposing of the writ petition.
Further, the Hon’ble Jurisdictional High Court in the case of Mukesh J. Ruparel Vs. Income Tax Officer and ors. WP No.15268 of 2023 (Bombay – HC) has also dealt with an identical issue, wherein the Assessing Officer (AO) vide notice dated 15.03.2023 granted time only up to 20.03.2023 to the show cause notice, which was less than 7 days and therefore Hon’ble High Court not only quashed the notice issued u/s 148A(b) of the Act but also the notices issued subsequently u/s 148A(b) of the Act, as well as 148 of the Act.
The Hon’ble Calcutta High Court in the case of Girdhar Gopal Dalmia Vs. The Union of India & Ors. M.A.T. No.727 of 2022 (Calcutta – HC) decided on 21.06.2022 dealt with the identical issue and clarified that if the appellant had received the show cause notice on 17.03.2022 online, then for calculating the period of 7 days namely 17.03.2022 has to be excluded if that is so the period of 7 clear days not stand fulfilled.
On the aforesaid analyzations, it has become clear that for taking appropriate action and/or opportunity to the Assessee for making compliance to the notice u/s 148A(b) of the Act, clear cut time of 07days is required to be given and the day on which the notice is issued, has to be excluded from that period.
Coming to the instant case, it is observed that the impugned notice was issued on 23.03.2022 and therefore the time given commended from 24.3.2022 onwards and ended on 29.03.2022, and hence only 6 days clear time was given to the Assessee.
Thus, respectfully following the aforesaid judgments of the Hon’ble Jurisdictional High Court, this Court is inclined to quash the notice dated 23.03.2022 u/s 148A(b) of the Act and last notice dated 31.003.2022 u/s 148 of the Act and the assessment order dated 28.02.2023. Hence, the notices u/s 148A(b) and 148 of the Act, along with the assessment order, are quashed.
In the result, the appeal filed by the Assessee is allowed. Order is pronounced 24.09.2025 as per rule 34(5) of the Income Tax {Appellate Tribunal} Rule 1963.