2022 (8) TMI 207 - HC - Income Tax

Revision u/s 263 - Reopening of assessment u/s 147 - HELD THAT - AO is directed to take up the assessment from the stage of issuance of show cause notice giving opportunity to the petitioner to make his objections and to produce documents enable him to make his reply, to access to the portal and thereafter, following the procedure by giving personal hearing or video conferencing and thereafter to conclude the assessment. Since the petitioner only prays for a remand, the assessment is set aside and remanded to the file of concerned respondent. The petitioner is granted four weeks time from date of issuance of this order, to file his reply to the proposals contained in the show cause notice, as well as the points raised in the impugned order, that shall also be read as a show cause notice and nothing more. The petitioner shall be heard thereafter and an order passed by the Assessing Authority taking note of the submissions of the assessee both written and oral as well as any supportive documents filed.

Summary

Issues:
Assessment orders challenged for assessment years 2012-2013 and 2013-2014; Violation of principles of natural justice; Reopening of assessment under Section 148 of the IT Act; Revisional proceedings under Section 263 of the IT Act; Adequacy of opportunity for the petitioner to respond; Allegations of errors in the assessment order; Failure to follow procedures under Section 144 B of the IT Act; Discrepancies in property purchase details; Unexplained sources of funds; Faceless Assessment Centre procedures; Failure to respond to show cause notices; Principles of natural justice not followed.

Analysis:
1. The petitioner challenged assessment orders for the years 2012-2013 and 2013-2014, alleging violations of natural justice principles. The assessment was reopened under Section 148 of the IT Act, leading to revisional proceedings under Section 263 initiated by the third respondent.

2. The petitioner contended that the assessment orders were passed ex-parte without affording a proper opportunity for a hearing. The petitioner had already filed an appeal before the Income Tax Appellate Tribunal regarding the determination of taxable income.

3. The Principal Commissioner invoked Section 263 of the IT Act, finding errors in the Assessing Officer's order related to the purchase of a property in Chennai. The petitioner failed to provide satisfactory explanations for the discrepancies in property value and sources of funds.

4. The case was transferred to the Faceless Assessment Centre, where show cause notices were issued. The petitioner failed to respond adequately to these notices, leading to draft assessment orders and final orders being passed without proper consideration of the petitioner's submissions.

5. The Court found that the petitioner was not given sufficient time to respond to the show cause notices, leading to a violation of principles of natural justice. Citing previous judgments, the Court set aside the assessment orders and directed the Assessing Officer to allow the petitioner to make objections, provide documents, and conduct a proper assessment following due procedures.

6. The Court granted the petitioner four weeks to file a reply and directed the Assessing Authority to consider the petitioner's submissions before passing a new order. The writ petitions were allowed, with no costs incurred, and connected miscellaneous petitions were closed.