The Income Tax Officer,Ward Hingolitq. & Dist. Hingoli v. Ghuge

( 1 ) wp 10244.22 IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABAD WRIT PETITION NO. 10244 OF 2022 Pradeep S/o Tukaram KokadwarAge: 57 years, Occ.: Business, R/o. Mayur Agencies, Mondha Road,Jniktur, Tq. Jintur, Dist. Parbhani.(Maharashtra State)PAN No. ...PETITIONER V/s. 1.The Principal Chief Commissioner Income Tax-1, Nashik Income Tax Building, Agra Road,Nashik, Dist. Nashik. 2.The Income Tax Officer,Ward HingoliTq. & Dist. Hingoli. ... RESPONDENTS ... Mr. Raviraj R. Chandak, Advocate for the PetitionerMr. Alok Sharma, Advocate for R/1 & 2 CORAM : RAVINDRA V. GHUGE & Y.G. KHOBRAGADE, JJ.DATE :28[th] June, 2023 ORAL JUDGMENT (Per: Ravindra V. Ghuge, J.) :- 1.Rule. Rule made returnable forthwith and heard finally by the consent of the parties. 2.The short issue involved in this case is as to whether the IncomeTax Department can refuse to look into a reply which is tendered belatedly to anotice under Section 148-A (b) of the Income Tax Act. 3.The Petitioner who is an assessee, is alleged to have failed indisclosing total credits of Rs.3,48,29,506/- during the financial year 2015-2016, relevant to the assessment year 2016-2017 which were deposited in thebank account held by the Petitioner with M/s. Shri Renuka mata Multi StateUrban Co-operative Credit Society Limited. With the said notice having beenissued on 29.05.2022, a period of fourteen days was granted to the Petitionerto tender a reply. Our attention is drawn to the judgment delivered by theHon’ble Supreme Court dated 04.05.2022 in Civil Appeal No.3005/2022(Union of India and Others V/s. Ashish Agarwal), more specifically toparagraph 10 (i) (the last sentence) which reads as “the Assessing Officer shall,within thirty days from today provide to the respective assessees informationand material relied upon by the Revenue, so that the assessees can reply to theshow-cause notices within two weeks thereafter”. 4.Section 148-A (b) requires an opportunity of hearing to be given tothe assessee which would not be less than seven days and should not exceedingthirty days from the date of the notice or such time as may be extended by theconcerned authority on an application tendered by the assessee. 5.The Petitioner has tendered his reply dated 14.06.2022, to thenotice at issue, which was uploaded on 15.06.2022. The authorities havepassed an order under Section 148-A (d) on 27.07.2022. It is obvious thatwhen the concerned authority delivered its order on the said date, the replywas already before the said authority. 6.The learned advocate Shri Sharma appearing for the Income TaxDepartment, who has vehemently opposed this petition, submits that theauthority concerned has recorded in paragraph 3 of its order which reads asunder: “03. Information and material shared with the assessee:- Following the directions of the Hon'ble Supreme Court of Indiaas mentioned above and considering the CBDT InstructionNo.01/2022 dated 11/05/2022 and ITBA step- by step documentNo.1 dated 12-05-2022 related to implantation of the decision ofHon'ble Supreme Court of India, the information and the materialwas supplied to the assessee on 29.05.2022 and time of twoweeks from date of communication of letter issued to theassessee conveying information/material relied upon wasprovided to the assessee for submitting the response/reply.” 7.He, therefore, contends on instructions, that when the Hon’bleSupreme Court granted only fourteen days time to submit a reply, any responsefrom the assessee after such fourteen days, is to be ignored. The Department ( 4 )wp 10244.22 Following the directions of the Hon'ble Supreme Court of Indiaas mentioned above and considering the CBDT InstructionNo.01/2022 dated 11/05/2022 and ITBA step- by step documentNo.1 dated 12-05-2022 related to implantation of the decision ofHon'ble Supreme Court of India, the information and the materialwas supplied to the assessee on 29.05.2022 and time of twoweeks from date of communication of letter issued to theassessee conveying information/material relied upon wasprovided to the assessee for submitting the response/reply.” 7.He, therefore, contends on instructions, that when the Hon’bleSupreme Court granted only fourteen days time to submit a reply, any responsefrom the assessee after such fourteen days, is to be ignored. The Department ( 4 )wp 10244.22 further contends that on verification, it was observed that the Petitioner hadfiled his return of income for the year under consideration and the aforesaidcash deposits / credits were not accounted for the year under consideration.We find that the said stand taken by the Department as is set out in the re-produced paragraph 3, would amount to a pedantic view. The Hon’bleSupreme Court in Ashish Agarwal (supra), has recorded that the time availablefor an assessee to reply is thirty days. Section 148-A (b) indicates that theminimum time to be granted is seven days and the maximum is thirty days. If ajustifiable reason is put-forth, the time could be extended even there beyond. 8.However, Shri Sharma is right in contending that the fourteen daysallotted to the Petitioner expired on 13.06.2022. There is no dispute on thiscontention. He is right in contending that the assessee should have moved anapplication online seeking extension of time and the Department could haveconsidered that application. 9.It is obvious that the Assessee / Petitioner did not move anapplication till 13.06.2022, for seeking extension of time. Though his reply isdated 14.06.2022, it is admittedly uploaded on 15.06.2022. Had he made anapplication for seeking extension of time, further complications would not haveoccurred. On this count, since we are favorably entertaining this petition, wewould impose nominal cost of Rs.5,000/- on the Petitioner. The learned advocate Shri Sharma submits that the said amount may be donated to theAdvocate’s Association of the Bombay High Court, Bench at Aurangabad. Assuch, the Petitioner would deposit such amount with the Advocate’s Associationof the Bombay High Court, Bench at Aurangabad within fifteen days fromtoday. 10.The issue is that the Department did not look into the reply /response of the Petitioner which was uploaded on 15.06.2022, belatedly by twodays, when the decision was pronounced by the Department under 148-A (d),on 27.07.2022. It would have been pragmatic for the Department to haveconsidered the response which was already available in it’s records at the timewhen the decision was pronounced on 27.07.2022. We do not find any suchconclusion from the judgment in Ashish Agarwal (supra), that a reply filedwithin the period of thirty days and after the expiry of fourteen days mentionedin the notice, should not be looked into by the Department. It is in the interestof justice and fair play that when a reply is available on record, though filedbelatedly, but, much prior to the decision arrived at by the authorities, thesame should be considered. It would be far fetched to hold that the Departmentshould ignore such a reply only for the reason that it was filed belatedly, butbefore the final order was passed. ( 6 )wp 10244.22 11.The learned advocate for the Petitioner cites a judgment dated12.05.2022 delivered by the Delhi High Court in Divya Capital One PrivateLimited V/s. Assistant Commissioner of Income Tax Circle 7 (1) Delhi & Anr.,wherein a similar view is taken. A detailed reply was filed after the period setout in the notice under Section 148-A (b) had expired, but, was received by theDepartment before the final order could be passed. ( 6 )wp 10244.22 11.The learned advocate for the Petitioner cites a judgment dated12.05.2022 delivered by the Delhi High Court in Divya Capital One PrivateLimited V/s. Assistant Commissioner of Income Tax Circle 7 (1) Delhi & Anr.,wherein a similar view is taken. A detailed reply was filed after the period setout in the notice under Section 148-A (b) had expired, but, was received by theDepartment before the final order could be passed. 12.In view of the above, this petition is partly allowed. The orderdated 27.07.2022 stands quashed and set aside and the proceedings arerelegated to the office of Respondent No.2. We expect the said authority toconsider the reply of the Petitioner dated 14.06.2022 in the light of the noticedated 29.05.2022 and pass an appropriate reasoned order in accordance withlaw. In view of the above, this petition is partly allowed. The order 13.The Rule is made partly absolute in the above terms. [Y.G. KHOBRAGADE, J.] [RAVINDRA V. GHUGE, J.] mub