The Gujarat High Court (HC) has held that failure to communicate adjournment invalidates the order under section 148(A) of the Income Tax Act, 1961.
The show cause notice under Section 148A(b) of the Act dated 10.3.2022 was issued to Shree Siddhi Foods, the assessee, which filed the application on 17.3.2022 and sought an adjournment for a period of seven days so that it can prepare the details. The reply had been filed on 25.3.2022.
According to the Assessing Officer, the assessee has failed to file the additional details for more than fifteen days. The request for an adjournment for seven days was not acceded to by explicit order. When the order was passed under Section 148A(d) of the Income Tax Act on 31.3.2022, he was oblivious to the reply which was tendered by the petitioner-assessee.
It was observed that once there was a request for adjournment, it should be a clear rejection with proper reasons if rejection has come. If any time is required to be granted, a specific date should be conveyed to the assessee.
It was evident that being aware of the request for adjournment, the Assessing Officer chose not to accede to such a request and then unilaterally took up the matter on 31.3.2022. Further noted that more than two weeks had elapsed from the time of issuing of the notice.
The assessee has no access to the Assessing Officer and would be completely clueless about the date on which the matter is to be next taken. Either there shall be a specific adjournment or specific order that requires communication.
A two-member bench comprising Justice Sonia Gokani and Justice Sandeep N Bhatt quashed the order of 148A(d) of the Act and the issuance of notice under Section 148 of the Income Tax Act, 1961.
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