The Single bench of the Karnataka High Court, headed by Justice S. Sunil Dutt Yadav, quashed the demand order prior to which only a two-day period was granted to reply to the Income Tax Show Cause Notice ( SCN ).
The assessee has sought the issuance of a writ of certiorari to quash the order dated 21.03.2024, passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, along with the computation sheet, demand notice, and notice issued under Section 271AAC(1) of the Income Tax Act, 1961.
The impugned Assessment Order was passed in violation of principles of natural justice. In so far as the show cause notice issued at dated 16.03.2024 was concerned, it had mandated filing of reply on or before 18.03.2024. It was submitted that such short time given for reply has resulted in violation of principles of natural justice and prejudice has been caused as the assessee was not in a position to submit the reply.
It was also submitted that, in light of the failure to upload the reply as the time limit has lapsed, the assessee was unable to put forth his case effectively, resulting in the passing of an order in the absence of a reply to the contentions raised in the show cause notice dated 16.03.2024.
The issuance of notice and reply to be furnished on 18.03.2024 are borne from records. The contention of prejudice being caused by the short time of two days given for making out a reply was considered by the court.
The bench held that the order in the computation sheet, demand notice, and notice were set aside, and the matter was relegated to the stage of the reply to the show cause notice, with the assessee being at liberty to upload the order of this Court as a reply to the recovery notice/show cause notice. The writ petition was disposed of accordingly.
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