Srivenkateshwar Tradex Private Limited v. Principal Commissioner of Income Tax, PCIT 7 & Anr.

1. Issue notice. 1.[1] Mr Ruchir Bhatia, learned senior standing counsel, accepts notice on behalf of the respondents/revenue.

2. Given the directions that we propose to pass, Mr Bhatia says that no counter-affidavit is required to be filed in the matter and he will rely on the record presently available with the court. 2.[1] Therefore, with the consent of the counsels for the parties, the writ petition is taken up for final hearing and disposal at this stage itself.

3. This writ petition concerns Assessment Year (AY) 2019-20.

4. The record shows that the petitioner was issued a notice dated 05.03.2023 under Section 148A(b) of the Income Tax Act, 1961 [in short,

7. It is not in dispute that the petitioner had filed responses to both notices issued under Section 148A(b) of the 1961 Act. These responses are dated 16.03.2023 and 30.03.2023.

8. The Assessing Officer (AO), however, was not persuaded by the responses furnished on behalf of the petitioner and, thus, proceeded to pass the impugned order dated 31.03.2023 under Section 148A(d) of the Act.

9. Mr A.K. Babbar, who appears on behalf of the petitioner, says that the reassessment proceedings have been triggered pursuant to show-cause notices issued under Sections 74 and 132 of the Central Goods and Services Tax Act, 2017 [in short, “CGST Act”], read with the corresponding provisions of the State Goods and Services Tax Act, 2017 [in short, “SGST Act”] as also the Integrated Goods and Services Tax Act, 2017 [in short, “IGST Act”]. 9.[1] It is Mr Babbar’s contention that the adjudication concerning these show-cause notices is pending and therefore, the fact that the proceedings were triggered under the allied statutes, simpliciter, could not be taken as information, without due application of mind for triggering reassessment proceedings under the 1961 Act.

10. Besides this, Mr Babbar also submits that insofar as the allegations made against the petitioner with regard to the fictitious purchases made from RPPL was concerned, the AO gave the petitioner barely two (2) days to file a response, which is contrary to the provisions of the 1961 Act. 10.[1] It is Mr Babbar’s contention that the timeframe granted did not permit the petitioner to file a more exhaustive and detailed reply to the said showcause notice.

11. Mr Bhatia, on the other hand, says that no prejudice was caused to the petitioner, since both the replies have been considered in the impugned order. 11.[1] Mr Bhatia, however, cannot but concur that the minimum statutory timeframe provided under the provisions of Section 148A(b) of the 1961 Act for filing the response is seven (7) days, which, in this case, was clearly not provided to the petitioner.

12. Therefore, we would be entering into an area of uncertainty if we were to accept that in this case, the two (2) days granted to the petitioner via the notice dated 27.03.2023 was sufficient.

13. The statute, as indicated above, provides a specific timeframe and therefore, that leeway would have to be granted to the assessee.

14. Having regard to the fact that the responses to notices form part of the impugned order dated 31.03.2023 passed under Section 148A(d) of the 1961 Act, in our view, the best way forward would be to set aside the said order with liberty to the AO to pass a fresh order. 14.[1] It is ordered accordingly.

15. Since Mr Babbar has indicated to us that the petitioner would like to file a further reply, accordingly, two(2) weeks are granted to file a comprehensive reply to both notices issued under Section 148A(b) of the Act. 15.[1] The AO, upon receipt of the reply, will issue a notice to the petitioner for according personal hearing in the matter. The notice will indicate the date and time of the hearing. 15.[2] The AO will, thereafter, proceed to pass a speaking order; a copy of which will be furnished to the petitioner.

16. The writ petition is disposed of, in the aforesaid terms.