Income Tax Dept. Can’t Deny Adequate Time for SCN Reply Citing Limitation, Must Initiate Proceedings Earlier: Madras HC Grants Relief to Tamil Nadu Power Corp.

The Madras High Court has granted relief to Tamil Nadu Power Corporation, ruling that the Income Tax Department cannot deny adequate time for an SCN (Show Cause Notice) reply by citing limitation, and must initiate proceedings earlier. This decision emphasizes the importance of providing taxpayers with a reasonable opportunity to respond to notices, even if it means the department needs to start its processes well within the limitation period. The court underscored that a taxpayer should not be prejudiced by the department's delay in initiating proceedings. This upholds principles of natural justice and fair assessment in income tax matters.