2021 (4) TMI 1099 - HC - Income Tax

Violation of principles of natural justice - show cause notice has been issued on 11.12.2019 listing the matter for personal hearing on 16.12.2019. However, the same has been served only subsequent to the time of personal hearing and there has been no opportunity of hearing extended to the petitioner - HELD THAT - It is only if the records of assessment specifically reveal the position that the petitioner was in receipt of show cause notice dated 11.12.2019 crystallising the issues proposed to be dealt with in the assessment and replies have been put forth by the petitioner to the aforesaid proposals, that it could be assumed that the show cause notice, sent through email, has been taken note of and responded to by the petitioner. Learned Senior Standing Counsel today confirms, on a perusal of the records, that there is nothing in the record to indicate that the proposals in the show cause notice had been discussed in the course of hearing on 12.12.2019. The benefit of doubt, in the above circumstances, should be extended to the petitioner. It is also admitted that the show cause notice has been received by the petitioner on the date of hearing and beyond the time of hearing. The impugned order is also passed on the same date of hearing proposed in the show cause notice, i.e., 16.12.2019. The impugned order is set aside. Since the assessments are now to be conducted in terms of the faceless assessment scheme, I refrain from fixing a date of hearing afresh and merely direct that proceedings for assessment be completed after hearing the petitioner within a period of six (6) weeks from today.

Summary

Issues: Challenge to assessment order for A.Y. 2017-18 based on violation of principles of natural justice.

Analysis:
1. The petitioner challenges an assessment order dated 16.12.2019 under the Income Tax Act, 1961 for A.Y. 2017-18, alleging a violation of natural justice.

2. The petitioner's counsel argues that the show cause notice was issued on 11.12.2019 for a personal hearing on 16.12.2019, but it was served after the scheduled hearing, denying the petitioner an opportunity to be heard.

3. However, the Senior Standing Counsel for the revenue contends that the petitioner's authorized representative had appeared on 12.12.2019, and the reply to the show cause notice dated 11.12.2019 was considered, as it was also sent via email.

4. The court noted the delay in the petitioner's responses to notices but emphasized that the show cause notice fixing the personal hearing on 16.12.2019 was received by the petitioner only on the same day, post the scheduled time.

5. The court observed that the records must reflect whether the petitioner received and responded to the show cause notice dated 11.12.2019, which the Senior Standing Counsel confirmed was not discussed during the hearing on 12.12.2019.

6. Consequently, the court extended the benefit of doubt to the petitioner due to the lack of evidence that the show cause notice was adequately addressed, setting aside the impugned order dated 16.12.2019.

7. Given the transition to faceless assessment, the court refrained from setting a new hearing date but directed that the assessment proceedings be completed within six weeks after hearing the petitioner.

8. Ultimately, the Writ Petition was allowed, with no costs, and connected Miscellaneous Petitions were closed, concluding the matter.