Date of receiving SCN & holidays to be excluded while computing 7 days period to give response u/s 148A: HC

Case Details: Girdhar Gopal Dalmia v. Union of India - [2022] 141 taxmann.com 251 (Calcutta)

Judiciary and Counsel Details

• • T. S. Sivagnanam & Hiranmay Bhattacharyya, JJ.
  • Ranjeet Kumar Murarka, Sr. Adv., Vivek Murarka and Debanath Dey for the Appellant.
  • Soumen Bhattacharya for the Respondent.

Facts of the Case

The instant petition was filed by the assessee challenging the notice issued under section 148A(b) on the ground that adequate opportunity had not been granted to him. The assessee contended that the assessee wasn’t given adequate time to file reply even though the statute specifies that a minimum of 7 days should be granted to the assessee.

However, the Assessing Officer (AO) contended that the assessee was granted reasonable opportunity. It was submitted that not only the reply was given but enclosures had been uploaded including bank statements to show that the alleged remittances by the assessee were through proper banking channels.

High Court Held

The High Court held that the statute gives discretion to the AO to fix the notice period and such time limit has to be fixed bearing in mind the principles of natural justice that the assessee should be afforded a reasonable and adequate opportunity.

It should be noted that 17th March 2022 was declared as a State holiday on account of the Holi festival and 18th March 2022 (Friday) was also declared as a holiday and 19th March 2022 and 20th March 2022 being Saturday and Sunday, the next working day is 21st March 2022.

The assessee had received the show cause notice on 17th March 2022 online and the order was passed on 29th March 2022. Thus, the period of 7 clear days did not stand fulfilled in the case on hand.

For calculating the period of 7 days, the date of receiving notice online, i.e., 17th March 2022 had to be excluded. Apart from that, 18th March 2022, 19th March 2022, and 20th March 2022 were to be excluded since they were all holidays on account of Holi festival.

Considering all these factors, the assessee should be granted an opportunity of being heard and thus, the matter was to be remanded back to AO for fresh consideration.

List of Cases Referred to

• • R.N. Fashion v. Union of India [2022] 139 taxmann.com 539 (Cal.) (para 3).