2021 (7) TMI 1345 - HC - Income Tax

Assessment u/s 153C - violation of Principles of Natural Justice - As contended that it is a classic case of violation of Principles of Natural Justice as the authorities competent, who is exercising the quasijudicial power, failed in their duty to provide reasonable opportunity to the assessees in the manner known to law - HELD THAT - The manner, in which, the orders of assessment were passed by the Assessing Authority itself would establish that reasonable opportunity had not been granted to the petitioners/assessees. Opportunity to be granted is not a mere opportunity and it must be meaningful and reasonable. The assessees must have time to put forth their defense statements, examine the witnesses by engaging a counsel or for personal hearing. Undoubtedly, the allegations against the assessees emanated from and out of a search conducted in the premises of M/s.Agni Estates and Foundations Private Limited. The assessees are the 'other persons' and therefore, they require opportunity to rebut the contentions raised against them from and out of the materials collected from the premises of the 'searched person'. This being the factum, the respondent could not able to establish that reasonable opportunity has been afforded to the petitioners/assessees to defend their case in the manner known to law. However, the allegations made against the Assessing Authority is not substantiated and became unnecessary. Therefore, such allegations made in the affidavits require no consideration. Though such an allegation is made, the respective learned Senior counsels fairly have not insisted the same. The Learned Senior counsels for the petitioners have reiterated that the petitioners are ready and willing to defend their case and reasonable opportunity is to be given.

Summary

Issues:
Challenging assessment orders under Section 153C of the Income Tax Act, 1961; Allegations of hurried assessment without reasonable opportunity; Violation of Principles of Natural Justice; Request for additional time, cross-examination, and personal hearing not considered; Quashing of assessment orders and remand for fresh consideration.

Detailed Analysis:

1. Challenging Assessment Orders under Section 153C:
The writ petitions challenge assessment orders passed under Section 153C of the Income Tax Act, 1961. Previous judgments by the court directed the Assessing Authority to afford opportunities to the petitioners for assessment/reassessment.

2. Allegations of Hurried Assessment without Reasonable Opportunity:
Petitioners argue that the Assessing Authority passed assessment orders hurriedly, denying them reasonable opportunities to defend their case. The petitioners' counsels contended that the orders lacked compliance with the directions issued by the court, rendering them null and void in the eyes of the law.

3. Violation of Principles of Natural Justice:
The petitioners alleged a violation of the Principles of Natural Justice, asserting that the authorities failed to provide reasonable opportunities as required by law. They emphasized the importance of affording a meaningful and reasonable opportunity to present a defense, including cross-examination and personal hearing.

4. Request for Additional Time, Cross-Examination, and Personal Hearing:
The petitioners requested additional time to respond to the allegations, cross-examine witnesses, and engage in a fair defense. However, the Assessing Authority proceeded with the assessment without considering these requests, leading to the challenge of the assessment orders.

5. Quashing of Assessment Orders and Remand for Fresh Consideration:
The court, after considering the submissions, quashed the assessment orders for various assessment years. The matters were remanded back to the Assessing Authority for fresh consideration, emphasizing the need to provide a reasonable opportunity to the petitioners for a fair assessment process.

6. Court Directions and Conclusion:
The court directed the Assessing Authority to allow representation by counsels or authorized representatives, permit cross-examination of relevant persons, and ensure cooperation for timely disposal of proceedings. The Assessing Authority was given four weeks to complete the assessment/reassessment orders, with the option for petitioners to approach the appellate authority if aggrieved. All writ petitions were allowed with no costs, and connected miscellaneous petitions were closed.