2022 (8) TMI 912 - HC - Income Tax

Validity of reopening of assessment u/s 147 - as per the petitioner objection raised by the petitioner has not been properly considered - HELD THAT - Ground raised by the petitioner that, while rejecting the objection of the petitioner by orders dated 19.03.2022, the objection raised by the petitioner has not been properly considered, is not appealing to this Court at this juncture because there has been consideration and rejection has been made and if that will have any repercussion in the present impugned orders i.e., assessment orders dated 28.03.2022, the same can very well be assailed collaterally, if the petitioner has chosen to go before the Appellate Authority, challenging the impugned assessment orders. Therefore, the said objections raised by the petitioner or the ground urged by the petitioner with regard to the jurisdiction of the Revenue, to invoke Section 147 or Section 148 is concerned, that cannot be gone into at this juncture especially in these writ petitions. After the rejection was made on 19.03.2022 of the objections of the assessee, a reasonable time should have been given to the assessee to respond to the show cause notices. It may be either the final show cause notice or by way of notice either under Section 142 (1) or Section 143 (2) of the Act as the case may be. In the present case, after the 19.03.2022 rejection order, straight away, final show cause notices were issued on 24.03.2022, giving only a very short time up to 27.03.2022 and in the meanwhile, the petitioner has already approached this Court by filing the aforesaid two writ petitions. The said reasons stated by the writ petitioner for deferring the date was not considered, as impugned orders of assessment was passed on 28.03.2022. Therefore, this Court feels that a fair opportunity was not given to the petitioner even after the show cause notices dated 24.03.2022. In view of the aforesaid facts, this Court also feels that the impugned orders dated 28.03.2022 are in violation of the principles of natural justice. On that ground itself, the impugned orders i.e., the assessment orders dated 28.03.2022 are liable to be set aside. Thus assessment orders which are impugned herein are hereby set aside and the matters are remitted back to the respondent / Revenue for reconsideration.

Summary

Issues:
Reopening of assessment for Assessment Years 2015-16 and 2016-17 under Section 148 of the Income Tax Act, 1961; Consideration of objections to the reasons for reopening; Timelines for response to final Show Cause Notices; Challenge to assessment orders dated 28.03.2022; Violation of principles of natural justice in passing assessment orders.

Analysis:
The petitioner, an assessee under the respondent, challenged the reopening of assessments for the years 2015-16 and 2016-17 through notices issued under Section 148 of the Income Tax Act. After seeking reasons for reopening and raising objections, the objections were rejected on 19.03.2022. Final Show Cause Notices were issued on 24.03.2022, with a response deadline of 27.03.2022, and assessment orders were passed on 28.03.2022, leading to the filing of the present writ petitions.

The petitioner contended that objections were not properly considered, especially since writ petitions challenging the rejection were pending. The Revenue argued that all necessary procedures were followed, and the petitioner could appeal to the Commissioner of Income Tax (Appeals) instead of pursuing writ petitions. The Court considered these submissions and the materials before it.

While the Court acknowledged that objections had been considered and rejected, it noted that the petitioner should have been given a reasonable time to respond after the rejection. The short timeframe between the rejection and final Show Cause Notices, along with the hasty passing of assessment orders, indicated a lack of fair opportunity and violation of natural justice. Consequently, the assessment orders dated 28.03.2022 were set aside.

The Court ordered the matters to be remitted back to the Revenue for reconsideration, allowing the petitioner to treat the Show Cause Notices as fresh and provide necessary documents within two weeks. Other prayers in the writ petitions were rejected, except for the quashing of the assessment orders. The Court disposed of the writ petitions with these directions, emphasizing no costs and closing connected miscellaneous petitions.