2021 (9) TMI 1339 - HC - Income Tax

Assessment u/s 153A/153C - violation of principle of natural justice - Whether before passing the objections/representations made by the petitioners against the initiation of impugned proceedings u/s 153C were considered or not and if not then is it a violation of principle of natural justice? - HELD THAT - Since in this case it appears from record that the representations/objections of the petitioners were not considered and disposed of before passing the aforesaid impugned assessment orders an no opportunity of hearing was given to the petitioners which is a clear violation of principle of natural justice without going into the merits of the impugned assessment orders and the aforesaid objections/representations of the petitioners on the ground of violation of principle of natural justice alone setting aside the aforesaid impugned assessment orders dated 22nd May 2021 being Annexure P-10 to the writ petition and remanding the case of the petitioners to the respondents concerned to consider and dispose of the aforesaid two representations/objections dated 23rd April 2021 and 4th May 2021 made by the petitioners in accordance with law and by passing a reasoned and speaking order and after giving an opportunity of hearing to the petitioners or their authorised representative within four weeks from the date of communication of this order and further continuation of the assessment proceedings in question will depend upon the outcome of the final order to be passed upon the aforesaid objections/representations of the petitioners. It is recorded that this court has set aside the aforesaid impugned assessment orders on limited ground of violation of principle of natural justice of not considering and disposing of the aforesaid representations/objections of the petitioners and this Court has not gone into the merits of the case. In this matter the respondent Assessing Officer will proceed strictly in accordance with law while disposing of the aforesaid representations/objections of the petitioners

Summary

Issues involved:
Violation of principle of natural justice in passing assessment orders without considering objections/representations of petitioners.

Analysis:
The petitioners challenged the assessment orders dated 22nd May, 2021 under Sections 153C and 144 of the Income Tax Act, 1961, alleging that the orders were passed without addressing their objections/representations dated 23rd April, 2021 and 4th May, 2021. The petitioners contended that the orders were in violation of the principle of natural justice as they were not given a hearing or their objections were not disposed of before the assessment orders were passed. The court noted that the Income Tax Authorities failed to demonstrate that the objections were considered and disposed of before passing the impugned assessment orders.

The main issue before the court was whether the petitioners' objections/representations against the initiation of proceedings under Section 153C of the Income Tax Act were duly considered before passing the assessment orders. The court found that the representations were not addressed before the orders were issued, leading to a clear violation of the principle of natural justice. The court, without delving into the merits of the assessment orders or the objections, set aside the impugned orders and remanded the case to the concerned authorities to consider and dispose of the representations in accordance with the law.

The court emphasized that the decision to set aside the assessment orders was solely based on the violation of the principle of natural justice and not on the merits of the case. The respondent Assessing Officer was directed to proceed strictly in accordance with the law while addressing the representations/objections of the petitioners. The court ordered that the continuation of the assessment proceedings would depend on the outcome of the final order to be passed on the objections/representations of the petitioners. The writ petition was disposed of with these directions, ensuring that the petitioners' objections were given due consideration and a fair opportunity of hearing was provided.