2022 (7) TMI 962 - HC - Income Tax

Reopening of assessment u/s 147 - Notice issued u/s 148A - Allegation of violation of principles of natural justice - no reply/submission of the petitioner was available in the case history/noting page in the Income Tax Business Application Portal - HELD THAT - As the petitioner sent a representation on 11.04.2022. The reply with the documents annexed to it has been uploaded in the Departmental portal. In the reply, the details were given how the petitioner over a period of time made all the fixed deposits initially at Tuticorin and thereafter, at Chennai and further along with the bank statement records uploaded in the portal with hash value. In the order, dated 19.04.2022, there is no reference. It is clearly stated in the impugned order inner page 2 paragraph 4, it is recorded that the petitioner had not sent any reply on or before 11.04.2022 and further in view of the same, nothing has been considered and discussed in the impugned order. Hence, the impugned order is set aside. The petitioner is permitted to file any additional reply and documents in support of their contention in addition to the earlier reply, dated 11.04.2022. The Assessing Officer is directed to consider the petitioner's reply and give her an opportunity of personal hearing and pass appropriate orders on merits and in accordance with law thereafter.

Summary

Issues:
1. Petitioner's contention regarding notice under Section 148 A (a) of the IT Act for non-filing of return for Assessment Year 2015-2016.
2. Allegation of failure to consider petitioner's reply under Section 148 A (d) of the IT Act.
3. Source of fixed deposits and equity shares transactions.
4. Application of Section 149 (1) (a) of the IT Act regarding the time limit for issuing notice.
5. Timeliness of passing the impugned order under Section 148 A (b) of the IT Act.
6. Request for quashing the impugned orders and seeking an opportunity for a personal hearing.
7. Respondent's submission regarding transactions during the financial year 2014-2015 and non-filing of return for Assessment Year 2015-2016.
8. Notice issued under Section 148 A (a) and (b) of the IT Act for transactions in the financial year 2014-2015.
9. Assessment of petitioner's submissions and documents.
10. Compliance with principles of natural justice.
11. Objection to income exceeding Rs.50,00,000 and validity of the orders passed.
12. Review of petitioner's representation and documents uploaded in the Departmental portal.
13. Setting aside of the impugned order and directions for further consideration by the Assessing Officer.

Analysis:

1. The petitioner raised concerns over receiving a notice under Section 148 A (a) of the IT Act for not filing the return for Assessment Year 2015-2016 despite regular compliance in previous years. The petitioner requested time to gather necessary details, leading to subsequent notices and responses.

2. The petitioner alleged that the respondent failed to consider the petitioner's reply under Section 148 A (d) of the IT Act, despite submitting relevant documents and explanations regarding the source of fixed deposits and equity shares transactions, emphasizing compliance with the law and citing a relevant judicial decision.

3. Details provided by the petitioner revealed the sources of fixed deposits from family partitions, Stridhana, and savings from various sources. The petitioner also explained the sale and purchase of equity shares, highlighting compliance with Section 10 (38) of the IT Act.

4. The petitioner invoked Section 149 (1) (a) of the IT Act to argue that the income in question was below the threshold of Rs.50,00,000, questioning the validity of the notice issued beyond the prescribed time limit.

5. The petitioner criticized the timeliness of the respondent's actions, highlighting discrepancies in the processing of the case within the stipulated time frame under Section 148 A (b) of the IT Act.

6. Seeking relief, the petitioner requested the quashing of the impugned orders and emphasized the right to a personal hearing before any adverse decision, offering cooperation for clarifications if needed.

7. The respondent presented details of transactions involving the petitioner during the financial year 2014-2015, pointing out the non-filing of the return for Assessment Year 2015-2016, leading to the issuance of notices under Section 148 A (a) and (b) of the IT Act.

8. The respondent justified the issuance of notices based on the petitioner's non-compliance and the subsequent lack of submission in the Departmental portal, leading to the passing of orders under Section 148 A (d) and Section 148 of the IT Act.

9. The assessment of the petitioner's submissions and documents was scrutinized, with emphasis on the availability and consideration of relevant information in the case history for a fair evaluation.

10. Compliance with principles of natural justice was defended by the respondent, highlighting the opportunities provided to the petitioner for submitting details and the absence of violation in the procedural aspects of the case.

11. The respondent countered the petitioner's objection regarding income exceeding Rs.50,00,000, asserting the validity of the orders passed under Section 148 A (d) of the IT Act within the prescribed time limits.

12. Upon review, discrepancies in the respondent's consideration of the petitioner's representation and uploaded documents were identified, leading to the setting aside of the impugned order and directions for further review by the Assessing Officer.

13. The judgment allowed the writ petition with specific directions for additional submissions, a personal hearing, and a reassessment of the case by the Assessing Officer, ensuring compliance with legal procedures and principles of natural justice.