Response submitted on next working day to be considered if time-limit to file response expired on a public holiday: HC

Case Details: R N Fashion v. Union of India - [2022] 139 taxmann.com 539 (Calcutta)

Judiciary and Counsel Details

• • T.S. Sivagnanam & Hiranmay Bhattacharyya, JJ.
  • Pratyush Jhunjhunwala & Samit Rudra, Advs. for the Appellant.
  • Soumen Bhattacharyya, Adv. for the Respondent.

Facts of the Case

Assessee was issued notice under section 148A(b) calling upon to show cause as to why action shouldn’t be initiated for reopening of assessment. Notice stipulated that the reply be submitted by assessee not later than 18-03-2022. The assessee uploaded its reply on 21-03-2022.

The Assessing Officer (AO) proceeded to pass the order stating that the assessee did not file any response within the stipulated time. Aggrieved-assessee writ petition against the order passed by the AO.

High Court Held

The High Court held that the time limit for filing the reply in terms of notice expired on 18-03-2022 which was a public holiday. It was not clear as to whether the concerned AO had attended office or he was enjoying the holiday. In any event, a purposive interpretation needs to be given to the statutory provision. The opportunity provided under clause (b) of Section 148A should be a meaningful opportunity.

After the holiday, the following two days namely, 19th & 20th March 2022 were Saturday and Sunday. Therefore, the next working day was 21-03-2022. It appears that AO was not aware of the provisions of the General Clauses Act and, therefore, needs to be appraised of the same. The court has no hesitation to hold that AO acted in great haste and virtually reduced the procedure under the amended provision to a nullity.

The power to re-assess assessee was available to AO till the year 2023 if permissible under law. Therefore, the court failed to understand what was the great hurry on the part of AO to pass the order by ignoring the assessee’s reply given on the next working day.

The statute provides for granting time to submit a reply within seven days, but not exceeding 30 days from the date on which the notice is issued. Thus, a reasonable view ought to have been taken by AO as admittedly the reply cannot be submitted on 18th March 2022 if it was required to be submitted in physical form because the Income Tax Department was closed on account of a public holiday. Therefore, the interpretation given by AO was a thoroughly narrow interpretation and a perverse outlook.

List of Cases Reviewed

• • R.N Fashion v. UOI [WPO/1943/2022, dated 7-4-2022] (para 8) set aside.
  • Rajendra Singh v. State of Madhya Pradesh AIR 1996 SC 2736 distinguished.

List of Cases Referred to

• • RN Fashion v. Union of India [WPO/1943/2022, dated 7-4-2022] (para 1)
  • Rajendra Singh v. State of Madhya Pradesh AIR 1996 SC 2736 (para 4)
  • Divya Capital One (P.) Ltd. v. Asstt. CIT [W.P. (C) No. 7406 (Delhi) of 2022, dated 12-5-2022] (para 5)
  • GKN Driveshafts (India) Ltd. v. ITO [2002] 125 Taxman 963/[2003] ITR 19 (SC) (para 5)