2022 (3) TMI 1547 - HC - Income Tax

Reopening of assessment u/s 147 - time granted to the petitioner to reply was not made fully available to the petitioner - HELD THAT - Show Cause Notices were issued as to why the proposed variations should not be made, where, the Revenue directed the assessee to submit their response through the registered e-filing account at www.incometax.gov.in by 23 59 hours of 28.03.2022. In response to the said notices dated 27.03.2022, when the petitioner / assessee made an attempt to upload the reply, the web portal did not allow the assessee as it was closed by 28.03.2022 at 18 50 and 18 52 hours respectively, for which, evidences i.e., the screen shot print outs have been filed in the typed set of papers. Thereafter, the assessment order has been passed in respect of W.P.No.7932 of 2022, which is impugned herein under Section 147 r.w.s. 144B on 28.03.2022 at 23 32 hours IST that means well before the time granted to the petitioner to reply i.e., 23.59 hours, the very assessment order itself was passed at 23 32 hours, that too by closing the web portal from uploading the reply by the assessee by 18 52 hours on 28.03.2022. Thus, the evidences would show clearly that the time granted to the petitioner to reply was not made fully available to the petitioner to utilize and in fact even before the closing time of filing the reply, the very impugned assessment orders were passed. On that ground itself, it can easily be construed that the principles of natural justice has been violated. Therefore, on that ground, this Court is inclined to set aside these orders and remit the matter back to the respondents for reconsideration. Respective impugned orders of assessment are set aside and the matters are remitted back to the respondents for reconsideration.

Summary

Issues:
1. Reopening of assessment under Section 147 of the Income Tax Act, 1961.
2. Violation of principles of natural justice due to inadequate time for response.
3. Setting aside assessment orders and remitting the matter back for reconsideration.

Analysis:

1. Reopening of assessment under Section 147 of the Income Tax Act, 1961:
The case involved writ petitions concerning the Assessment Years 2014-15 and 2016-17. Notices under Section 148 of the Income Tax Act were issued to reopen the assessments. The Revenue directed the assessee to respond through the registered e-filing account by a specified deadline. However, the assessee faced technical issues as the web portal for uploading replies closed before the deadline. Assessment orders were passed before the allotted time for response, raising concerns about procedural fairness.

2. Violation of principles of natural justice due to inadequate time for response:
The petitioner argued that the time granted for response was not fully available due to the early closure of the web portal. The assessment orders were passed well before the deadline, indicating a violation of natural justice principles. The evidence presented supported the claim that the petitioner was not given a fair opportunity to respond. The Court acknowledged this violation and deemed it appropriate to set aside the assessment orders.

3. Setting aside assessment orders and remitting the matter back for reconsideration:
In light of the procedural irregularities and the violation of natural justice, the Court decided to set aside the assessment orders and remit the matter back to the respondents for reconsideration. The Court directed the Revenue to issue a fresh show cause notice with a clear time limit of at least one week for the petitioner to reply. After considering the response, the respondents were instructed to pass orders of assessment. The Court emphasized the importance of adhering to procedural fairness and ensuring adequate time for the parties to present their case.

In conclusion, the High Court of Madras, in a common order, set aside the assessment orders for the respective Assessment Years and remitted the matters back to the respondents for reconsideration. The Court emphasized the need for procedural fairness, directing the Revenue to provide sufficient time for the petitioner to respond before passing any new assessment orders. The judgment highlighted the importance of upholding natural justice principles in administrative proceedings related to tax assessments.