The Calcutta High Court has quashed a show cause notice (SCN) issued under Section 74 for multiple financial years, confirming that such a practice is not permitted under the existing laws.
Calcutta HC Invalidates Multiple Financial Year SCNs
The Calcutta High Court has set a precedent by ruling that a single show cause notice (SCN) issued under Section 74 for multiple financial years is unlawful. This decision reinforces the requirement for distinct SCNs corresponding to specific assessment years to ensure taxpayer rights are protected.
The court highlighted that the statutory provisions do not allow for one SCN to cover several financial years, which can lead to confusion and inadequate opportunities for the taxpayer to respond adequately for each period. By quashing the SCN and its consequential order, the court has curtailed excesses that might arise from broad interpretations of tax laws.
This ruling serves as a critical reminder for tax authorities to adhere strictly to statutory mandates while issuing notices. Lawyers specializing in taxation should ensure their clients understand the nuances of their SCNs and assert their rights should similar circumstances arise.
Citations
- Calcutta High Court (2026) Unknown
