2023 (10) TMI 1357 - HC - Income Tax

Validity of reassessment proceedings - denial of opportunity of being heard to the assessee contemplated under Section 148A(b) - HELD THAT - Section 148A(b) begins with provide an opportunity of being heard to the assessee . Hearing does not mean filing reply to the show cause notice. If the provision of this Section contemplates opportunity of being heard that has to be construed as personal hearing. Therefore, we not find substance in the submission of learned Standing Counsel that an opportunity of being heard to the assessee contemplated under Section 148A(b) does not necessarily mean personal hearing. In our view, opportunity of being heard means an opportunity of personal hearing to the assessee. Admittedly, no such opportunity of being heard was given to the petitioner before passing reopening order and issuing notice. Therefore, the same are set aside. The petitioner is directed to appear before the respondent on or before 27.10.2023 with all the relevant document in his possession of being heard.

Summary

Issues:
The judgment involves the legality of Ext. P5 order and Ext. P6 notice issued to a Co-operative society for the assessment year 2019-20 under Section 148A of the Income Tax Act.

Analysis:
The petitioner, a Co-operative society, argued that they had no taxable income for the relevant assessment year and did not file a return. The Income Tax Officer issued notices under Section 148A(a) and 148(A)(b) alleging escaped assessment without providing an opportunity for a personal hearing as mandated by Section 148A(d).

The petitioner contended that Ext. P5 order and Ext. P6 notice were against the law as they were issued without affording the opportunity of being heard as required by Section 148A(b). The respondent, representing the Income Tax Department, argued that the manner of hearing under Section 148A(b) does not necessarily include a personal hearing.

The Court examined Section 148A(b) which mandates providing an opportunity of being heard to the assessee before issuing a notice under Section 148. The Court clarified that "opportunity of being heard" entails a personal hearing, not just filing a reply to a show cause notice. As the petitioner was not given a chance for a personal hearing before the impugned order and notice were issued, the Court found them unsustainable.

Consequently, the Court set aside Ext. P5 order and Ext. P6 notice, directing the petitioner to appear before the respondent with all relevant documents for a personal hearing. The assessing officer was instructed to pass a fresh order after considering the petitioner's submissions. Failure to appear on the specified date would result in no further hearing opportunities for the petitioner.

In conclusion, the Court disposed of the writ petition with the above directions, emphasizing the importance of providing an opportunity for a personal hearing as part of the assessment process under Section 148A of the Income Tax Act.