INDUS VALLEY PARTNERS INDIA PVT. LTD. v. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 10-1 & ANR.

1. On the previous date, we had heard the matter at some length, whereupon we had etched out the broad controversy with regard to the mandatory period for filing a reply to the notice issued under Section 148A(b) of the Income Tax Act, 1961 [in short, “Act”] which was required to be provided.

2. As noted on that date i.e., 01.02.2023, it was the contention of Mr Salil Kapoor, who appears on behalf of the petitioner, that the minimum statutory timeframe, as indicated in clause (b) of Section 148A of the Act, was not provided. 2.[1] For the sake of convenience, the relevant parts of the order dated 01.02.2023 are set forth hereafter: “2. This writ petition concerns Assessment Year (AY) 2018-19.

3. Mr Salil Kapoor, who appears on behalf of the petitioner/assessee, says that the period granted to the petitioner for filing a reply via notice dated 10.03.2022, issued under Section 148A(b) of the Income Tax Act, 1961 [in short, “the Act”], was less than the mandatory period, i.e., seven days.

3.1. In support of his plea, Mr Kapoor has drawn our attention to the email dated 12.03.2022 to show that the notice was served on that date. To be noted, the aforementioned notice dated 10.03.2022 called upon the petitioner to file its response “on or before 17.03.2022”.

4. It cannot be disputed that the requirement under Section 148A(b) of the Act is to accord time to an assessee “not less than seven days and but not exceeding thirty days from the date on which the notice is issued…”.

5. Mr Kapoor submits that the expression “not less than seven days” commences from the date when the notice was issued, which will take the time required to be granted beyond 17.03.2022. 5.[1] In support of his plea, Mr Kapoor has relied upon the judgment of the Supreme Court rendered in Commissioner of Income-tax v. Braithwaite & Co. Ltd (1993) 67 Taxman 155 (SC). In particular, reference is made to the observations made in paragraph 7 of the said judgment, which read as follows: “7. We are of the view that on the plain reading of the proviso to rule 1(v), Second Schedule it is clear that in order to claim benefit of the said provision the borrowed money has to be repaid during the period of more than seven years. The only interpretation which can be given to the expression 'during a period of not less than seven years' is that the said period should go beyond seven years. The reasoning is simple. The period of seven years would not complete till the last 'minute' or even the last 'second' of the said period are counted. In other words, till the last minute of the seven years' period is completed the period remains less than seven years. In the present case the agreement was entered on 1-8-1964. The last instalment was to be paid on 31-7-1971. The seven years were to complete at 12 A.M. (between the night of 31- 7-1971 and 1-8-1971). Even if the loan was paid back at 11.59 P.M. on 31-7-1971 the period would be less than seven years by one minute. It is. therefore, obvious that the period of 'not less than seven years' can only mean till after the completion of seven years. We, therefore, hold period of seven years does not mean repayment 'during a period of not less than seven years'. To claim the benefit under rule 1(v) of the Second Schedule the repayment of the borrowed money must be during a period which is more than seven years.” [Emphasis is ours]

6. We may note that Mr Abhishek Maratha, learned senior standing counsel, who appears on behalf of the respondent/revenue, has indicated, albeit, across the bar, that the notice dated 10.03.2022, issued under Section 148A(b) of the Act, would have been uploaded on the designated portal, and therefore, the reliance on the email dated 12.03.2022 by the petitioner/assessee will not help its cause.

7. In this context, we have queried Mr Maratha as to whether a real-time alert was sent to the petitioner via SMS.

7.1. Mr Maratha says that he will ascertain as to whether or not the notice was, firstly, uploaded on the designated portal and also whether a real-time alert was sent to the petitioner via SMS.

8. We may note that Mr Kapoor has conceded that there is no assertion, even in the writ petition or in the reply to the notice dated 10.03.2022, that the petitioner/assessee did not receive a real-time alert via SMS.

9. That said, the impediment which is in the way of the respondent/revenue is as to whether the expression “not being less than seven days” appearing in clause (b) of Section 148A of the Act should be interpreted in the manner in which Mr Kapoor has put forth before us.

10. At this stage, Mr Kapoor also points out that the digital signatures were appended on the notice, issued under Section 148A(b) of the Act, only on 11.03.2022 i.e., on Friday. 10.[1] Although the date is not visible, since there is a reference to the day, it can be concluded that the date, as per the calendar would be 11.03.2022.

11. In any event, Mr Maratha will return with instructions on the aspects indicated above.

12. Issue notice. 12.[1] Mr Maratha accepts notice on behalf of the respondents/revenue.

13. List the matter on 14.02.2023.”