2022 (8) TMI 1466 - HC - Income Tax

Validity of reopening of assessment - petitioner against the impugned assessment order as been passed in total violation of principle of natural justice since before passing the aforesaid impugned assessment order all the formal notices were issued under the old surrendered PAN - HELD THAT - On perusal of the relevant record annexed to the writ petition, as find that the return relating to the relevant assessment year 2017-18 was filed by the petitioner under the aforesaid new PAN which was allotted to the petitioner and in spite of that, the assessing officer concerned has passed the impugned assessment order under the old PAN. On a similar grievance relating to the assessment year 2015-16, the assessment against the petitioner was dropped by the order dated 29th July, 2022. Considering the submission of the parties, and facts and circumstances as appears from record the impugned order to the writ petition is quashed. However, quashing of the impugned assessment order will not prevent the respondent assessing officer to initiate any fresh proceeding and pass an order under Section 147 of the Act in accordance with law.

Summary

Issues:
Challenge to assessment order under Section 147 of the Income Tax Act, 1961 for the assessment year 2017-18 based on violation of natural justice principles.

Analysis:
The petitioner challenged the assessment order dated 29th March, 2022, under Section 147 of the Income Tax Act, 1961, for the assessment year 2017-18. The main contention was the violation of natural justice principles as all formal notices were issued under the old surrendered PAN, despite the petitioner having filed the return under the new PAN. The petitioner communicated the surrender of the old PAN and the acquisition of the new one to the assessing officer's office in 2015. The assessment order was passed under the old PAN, leading to a breach of natural justice. It was noted that a similar issue had arisen for the assessment year 2015-16, where the assessment was dropped. Upon reviewing the record and submissions, the court found merit in the petitioner's argument and quashed the impugned assessment order dated 29th March, 2022.

The court's decision to quash the assessment order did not preclude the assessing officer from initiating fresh proceedings and passing an order under Section 147 of the Act in compliance with the law. The court emphasized that while the impugned order was set aside, the assessing officer retained the authority to undertake lawful proceedings in the future. The writ petition, WPA No.17644 of 2022, was disposed of with this direction, allowing for potential future actions by the assessing officer within the legal framework.