2021 (12) TMI 1261 - HC - Income Tax

Assessment u/s 153C - non issue of notice u/s 142 - notices under Sections 142(1) and 143(3), were in all probability sent to the earlier e-mail address of the petitioner, which had become defunct - violation of the principles of natural justice, as he was not served with the requisite statutory notices, leading to passing of the assessment order - HELD THAT - Though respondent No.1 has stated that he had sent the notice under Section 142(1) of the Act, firstly on 30.08.2021, and thereafter on 17.09.2021 with corrigendum on 27.09.2021, nothing has been stated regarding service of notice. All that is stated is that the assessee did not respond to any of the notices. If this is read in conjunction with the averments made in paragraph No.4 of the counter affidavit filed by the respondents, it becomes evident that the notices were sent by the respondent to the earlier e-mail address of the petitioner, which has now become defunct. Petitioner has now a new e-mail account being [email protected] , which was duly informed to the Income Tax Department on 15.08.2019. That being the position, we are of the view that petitioner was not heard before passing the impugned order of assessment. There is thus violation of the principles of natural justice. The impugned assessment order should be set aside with a direction to respondent No.1 to pass fresh assessment order for the assessment year 2019-20 in accordance with law,

Summary

Issues:
Quashing of assessment order under Section 153 C of the Income Tax Act, 1961 for the assessment year 2019-20 due to violation of principles of natural justice.

Analysis:
The petitioner filed a petition under Article 226 seeking to quash the assessment order passed by the Assistant Commissioner of Income Tax for the assessment year 2019-20. The petitioner, an assessee under the Act, had initially filed a return of income for the said year. Subsequently, incriminating materials related to land purchase were found during a search operation in another individual's case. The assessing officer proceeded ex parte as the petitioner did not respond to notices, leading to an assessment determining a significantly higher income. The petitioner claimed not receiving notices as they were sent to an outdated email address, while the respondent contended that notices were sent to the correct email address available on the ITBA portal. The court noted the violation of natural justice principles due to the petitioner not being heard before the assessment order was passed.

The court examined the assessment order and found discrepancies in the notices sent to the petitioner. Despite the respondent's claims of sending notices, there was no mention of the service of notices, and it was evident that the outdated email address was used. The petitioner had updated their email address with the Income Tax Department, which was not considered during the communication process. Consequently, the court concluded that the petitioner was not given a fair hearing before the assessment order was issued, leading to a violation of natural justice.

In light of the principles of natural justice being breached, the court decided to set aside the impugned assessment order and directed the respondent to conduct a fresh assessment for the assessment year 2019-20, ensuring the petitioner is given a proper opportunity to be heard. The writ petition was allowed accordingly, and any pending interlocutory applications were closed without any costs being imposed.