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2015 (1) TMI 1426 - HC - Income TaxReopening of assessment u/s 147 - unexplained share purchases - addition based on sworn statement of Mukesh Choksi accommodation entry provider - as alleged by assessee for non providing any fair and reasonable opportunity of being heard to the petitioner - denial of an opportunity of fair hearing by providing copy of the statement and related details regarding the alleged share amount - HELD THAT - Without furnishing a copy of the statement stated to have been given by Mukesh Choksi and without notifying the petitioner regarding basis of the transaction that petitioner is said to have entered into with Mukesh Choksi, respondent has passed the impugned order. The entire basis for the impugned order is the sworn statement of Mukesh Choksi. Unless petitioner is given opportunity to have his say in the mater with regard to the said statement and its contents, it cannot be said that petitioner was given an opportunity of being heard in the matter. Hence, it has to be held that the impugned order is passed without providing any fair and reasonable opportunity of being heard to the petitioner. There was absence of fair and reasonable opportunity and such an assessment order could not be sustained and could be interfered with under Article 226 of the Constitution of India. See MR. ASHOK MITTAL VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX AND ANOTHER 2014 (4) TMI 208 - DELHI HIGH COURT - Decided in favour of assessee.
Issues:
Challenge to assessment order under Section 143(3) read with Section 147 of the Income Tax Act, 1961 for the assessment year 2007-08 based on a re-opening notice under Section 148. Analysis: The petitioner challenged the assessment order dated 30.06.2014 passed by the Income Tax Officer under Section 143(3) read with Section 147 of the Income Tax Act, 1961 for the assessment year 2007-08. The petitioner's return of income for the said assessment year was accepted initially, but a notice under Section 148 was issued for re-opening the assessment. The respondent added a sum of &8377; 6,34,645 to the petitioner's income, alleging it pertained to shares purchased by the petitioner from income that had allegedly escaped assessment. The petitioner contended that the proceedings were initiated based on a sworn statement by Mr. Mukesh Choksi, which the petitioner had requested but not received. The petitioner argued that without being provided with the statement or details of the transaction, he was not given a fair opportunity to be heard. The petitioner relied on a Delhi High Court judgment where a similar lack of opportunity rendered an assessment order unsustainable under Article 226 of the Constitution of India. The Court noted that the petitioner was not furnished with the statement made by Mukesh Choksi, which formed the basis of the assessment order. Without being informed about the contents of the statement or the basis of the transaction with Mukesh Choksi, the petitioner's objections were disregarded, and the assessment order was passed solely on the basis of the statement. The Court emphasized that the petitioner must be given a fair opportunity to respond to the statement and its contents to ensure a proper hearing. Citing a Delhi High Court judgment, the Court highlighted the importance of providing all relevant details to the assessee for a fair and reasonable opportunity to be heard. Therefore, the Court held that the impugned order was passed without affording the petitioner a fair hearing and ordered the matter to be reconsidered by the respondent after providing the petitioner with a fair and reasonable opportunity to be heard and furnishing the details/copy of the statement on which the assessment order was based. In conclusion, the Court allowed the writ petition, quashed the impugned order, and remitted the matter for fresh consideration in accordance with the law and the observations made in the judgment.
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