RANCHI DISTRICT BAR ASSOCIATION THROUGH ITS JOINT SECRETARY (ADMIN) SRI PAWAN RANJAN KHATRI V. PRINCIPAL COMMISSIONER OF INCOME TAX

WPC/4606/2023

AI Insights

The case involves the Ranchi District Bar Association challenging the actions of the Income Tax authorities under Section 148 of the Income Tax Act, 1961. The primary contention was the inadequate response time provided in a show cause notice issued under Section 148A(b), which allegedly violated the statutory requirement of a minimum of seven days for the assessee to respond. The petitioner argued that the notice required a response within five days, leading to an ex parte assessment and subsequent penalty orders, which were also challenged in the writ petition. The High Court of Jharkhand, referencing a previous decision and the specific provisions of the Income Tax Act, found in favor of the petitioner, emphasizing the necessity of providing a clear seven-day period for response, excluding the day of issuance and the last day of submission.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 746609 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 27-02-2025
• Assessment Year: misc
• Other Referred Cases: Pioneer Motors (Private) Ltd. Vs. Municipal Council, Nagercoil
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: KUMAR VAIBHAV; ANURAG VIJAY; SRIJAN
• Assessee Lawyers: DARSHANA MISHRA; MAHENDRA CHOWDHARY
• Keywords: Ex parte assessment; Income Tax Act; Penalty orders; Show cause notice; Minimum 7 days time
• Section: 148; 148A(b)

Judgement Text

" -1 of 3- W.P. (T) No. 4606 of 2023 IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P. (T) No. 4606 of 2023 Ranchi District Bar Association, having its office at New Bar Building, Court Compound, Kutchery Road, Ranchi P.O. G.P.O., P.S. - Sadar, Town and District: Ranchi - 834001 in the state of Jharkhand, through its Joint Secretary (Admin.) Sri Pawan Ranjan Khatri, son of Late Ramesh Chandra Khatri, aged about 46 years, resident of Kadru diversion Road, Behind Hotel Yuvraj Palace, Tripathi Colony, P.O. & P.S. Doranda, Town and District: Ranchi-834002, in the State of Jharkhand. ………….. Petitioner Versus 1. Principal Commissioner of Income Tax, having its office at Central Revenue Building, 5A, Main Road, P.O. - G.P.O., P.S. Chutia, Town and District Ranchi - 834001, Jharkhand. 2. Income Tax Officer, Ward 1(1), Ranchi, having its office at Central Revenue Building (Annexe), 5A, Main Road, P.O. -Ranchi, P.S. Chutia, Town and District Ranchi 834001, Jharkhand. 3. Assessment Unit, Income Tax department, National Faceless Assessment Centre, 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, P.O. Lodhi Road, P.S. Lodhi Road, Delhi 110 003 …………… Respondents --------- CORAM: HON’BLE THE CHIEF JUSTICE HON’BLE MR. JUSTICE DEEPAK ROSHAN --------- For the Petitioner: Mrs. Darshana Poddar Mishra, Advocate Mr. Mahendra Kumar Chowdhary, Advocate For the Respondents: Mr. Kumar Vaibhav, Advocate Mr. Anurag Vijay, Advocate Mr. Srijan, Advocate --------- 07/Dated: 27.02.2025 M. S. Ramachandra Rao, C.J. (Oral) 1. In this Writ Petition the petitioner has assailed the action of the respondents in initiating proceeding under Section 148 of the Income Tax Act, 1961 by issuing a show cause notice dt. 23.03.2022 under Section 148A(b) of the Income Tax Act contending that under Clause (b) of Section 148A minimum 7 days time should be granted to the assessee, and pointing out that in the said show cause, the assessee was asked to respond by 29.03.2022, a bare five days from the date of issuance of the show cause notice. It is also contended that in view of the short time granted to -2 of 3- W.P. (T) No. 4606 of 2023 the petitioner, the petitioner was not able to reply to the show cause notice dt. 23.03.2022 and this resulted in an ex parte assessment order passed on 31.03.2022 and subsequent penalty orders. The said assessment order as well as the penalty orders have also been challenged in the Writ Petition by way of amendment application which was allowed on 21.12.2023. 2. A Division Bench of this Court in W.P.(T) No. 2640 of 2023 vide order dt. 28.08.2023 considered the provisions of the Income Tax Act and held as under: “7. To decide the lis involved in the instant application it is necessary to peruse the provisions of the Act which governs the issue in hand, which is quoted herein below:- Section 148A(b) of the I.T. Act. “148A (b) provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a);” From bare perusal of Section 148A(b) it appears that minimum 7 days is required to be given to the Assessee for filing reply. This 7 day is to be calculated by ignoring the date of issue and the last date of submission. In other words, minimum 7 clear days has to be provided to the Assessee for filing reply. In this regard reference may be made to the case of Pioneer Motors (Private) Ltd. Vs. Municipal Council, Nagercoil reported in AIR 1967 SC 684 wherein at paragraph 8 and 9 the Hon’ble Apex Court has deliberated the issue with regard to counting of dates. -3 of 3- W.P. (T) No. 4606 of 2023 “8. The words “not being less than one month” do imply that clear one month's notice was necessary to be given, that is, both the first day and the last day of the month had to be excluded. ………………..……….. “When…… ‘not less than’ so many days are to intervene, both the terminal days are excluded from the computation”. ……………………………………. 9. ………..………… In every case the words have to be construed in the context taking into consideration the language used and the object to be achieved. As we have said above, the use of the words “not being less than one month” implies the giving of a clear month excluding both the first and the last day of the month ………………………………………………………….. Emphasis supplied. 8. Thus, we see that the law is no more res-integra; inasmuch as, the words ‘not be less than 7 days’ implies that clear seven days is obligatory to be given to the Assessee. Thus, on the one hand the notice which was given to the petitioner under Section 148A(b) was not in accordance with the provision of the Act, inasmuch as, only 6 clear days was given to him. So, on this score alone the notice under Section 148A(b) deserves to be quashed and set aside.” 3. Counsel for the respondents does not dispute the said proposition of law laid down in that case. 4. Therefore, the writ petition is allowed. The impugned ex-parte assessment order as well as the penalty orders passed by the respondents are set aside. The petitioner is granted four weeks’ time to reply to the show cause notice dt. 23.03.2022 and the respondents are directed to pass a fresh assessment order in accordance with law within three months from the date of filing of the reply by the petitioner to the show cause notice after complying with the principles of natural justice. (M. S. Ramachandra Rao, C.J.) (Deepak Roshan, J.) APK/VK "