M/S. SRI GOPAL STORE V. AO., ASSESSMENT UNIT OF NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPT., NEW DELHI

WP(C)/18079/2023

AI Insights

In this case, M/s. Sri Gopal Store, represented by Mr. S. Ray, Sr. Advocate, challenged the procedural validity of a show cause notice issued by the Assessment Unit of the National Faceless Assessment Centre, Income Tax Department, New Delhi. The notice was issued on 12th December 2022, requiring a response by 16th December 2022, which was found to be in contravention of the CBDT's directive mandating a minimum of seven days' notice unless curtailed by the expiration of the limitation period for assessment. The court examined whether the revenue's actions adhered to the procedural norms set by the CBDT and whether the assessee was given adequate opportunity to respond.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 747559 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 13-07-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: S S MOHAPATRA
• Assessee Lawyers: S RAY
• Keywords: Assessment Order; CBDT directive; Compliance; Show cause notice; Scrutiny order

Judgement Text

" Page 1 of 3 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.18079 of 2023 (Through Hybrid mode) M/s. Sri Gopal Store …. Petitioner Mr. S. Ray, Sr. Advocate -versus- AO, Assessment Unit of National Faceless Assessment Centre, Income Tax Dept., New Delhi …. Opposite Party Mr. S. S. Mohapatra, Advocate (Senior Standing Counsel, I.T.) CORAM: JUSTICE ARINDAM SINHA JUSTICE SANJAY KUMAR MISHRA ORDER 13.07.2023 1. Mr. Ray, learned senior advocate appears on behalf of petitioner (assessee) and demonstrates, the show cause notice was issued on 12th December, 2022 requiring reply by late afternoon of 16th December, 2022. This was contrary to direction by Central Board Direct Taxes (CBDT) for there being minimum seven days notice, unless to be curtailed by reason expiring period of limitation for the assessment. 2. Mr. Mohapatra, learned advocate, Senior Standing Counsel Order No. 02. // 2 // Page 2 of 3 appears on behalf of revenue. He submits, counter has been filed. He draws attention to statements made in a passage appearing in paragraph 11. The passage is reproduced below. “On the above facts, it is seen that AO has given several opportunities and sufficient time to comply with the notice issued to assessee, however, assessee did not comply with some of the notices and if complied, it was incomplete. Moreover, after the issuance of the show-cause notice on 12.12.2022 though the compliance date was 16.12.2022 scrutiny order was passed on 23.12.2022 after 11 days from the date of issuance of the show-cause. The assessee could have complied with the notice if wanted to. Further, as mentioned in clause no. N.1.3.2 Response time of 7 days may be curtailed, keeping in view the limitation date for completing the assessment. Hence, technically there is no violation of the SOP issued by the CBDT on this behalf.” 3. Mr. Ray disputes alleged omission can be fatal to contention of his client. 4. We made query from Court on whether there is any CBDT provision in Income Tax Act, 1961 or the rules having empowered the CBDT to issue a directive on dispensation of requirement to give show cause notice on earlier omission by assessee in the proceeding. Nothing could be shown. It transpires that revenue was mandated to give the show cause notice and on having given it was bound by // 3 // Page 3 of 3 directions made by CBDT on reasonable time for the assessee to answer. The statement in relied on passage in the counter saying that though compliance date was 16th December, 2022, scrutiny order was passed on 23rd December, 2022 after 11 days and assessee did not comply till then, demonstrates that there is no basis for curtailment of the response time. 5. For reasons aforesaid we set aside and quash impugned assessment order and demand, both dated 23rd December, 2022. The show cause notice is restored for being replied to. Assessee is to answer by 20th July, 2023, failing which scrutiny order dated 23rd December, 2022 culminating in impugned assessment order and demand will all stand automatically restored. 6. The writ petition is disposed of. ( Arindam Sinha ) Judge ( S. K. Mishra ) Judge Prasant Digitally Signed Signed by: PRASANT KUMAR SAHOO Reason: Authentication Location: OHC Date: 13-Jul-2023 18:05:18 Signature Not Verified "