2022 (9) TMI 1377 - HC - Income Tax

Validity of assessment order - denial of natural justice - petitioner submitted reply to the show cause notice making several objections/submissions mentioned therein, but the authority without giving due opportunity of hearing and without considering the objections/submissions made in the reply, passed the impugned order - HELD THAT - From bare perusal of record it is apparent that the show cause notice was issued on 26.03.2022 and in pursuance to which reply was filed by the petitioner on 27.03.2022. As the petitioner had already filed reply and the impugned order was passed after consideration of the reply, therefore, it cannot be said that no opportunity of hearing was given to the petitioner. As such the petition cannot be entertained on the ground of non-affording an opportunity of hearing and violation of principles of natural justice. As regards the other contention of the petitioner that the authority has not considered the grounds taken in the reply, also cannot be a tenable ground because it is well settled that if the order has been passed ignoring one or more grounds taken in the reply, the same cannot be a ground for invoking extraordinary jurisdiction of this court under Article 226/227 of the Constitution of India and such order can be assailed by way of alternative remedy of appeal provided under the relevant provision of the Income Tax Act, 1961. As the present petition was filed on 20.04.2022, i.e. within 20 days from the date of passing the assessment order dated 30.03.2022, therefore, if the petitioner files the statutory appeal within a further period of 30 days, the same shall be decided by the authority on merits, ignoring the question of delay in filing the appeal.

Summary

Issues involved:
Challenge to assessment order under Article 226/227 of the Constitution of India based on lack of opportunity of hearing and non-consideration of objections in the reply.

Analysis:
The petitioner challenged the assessment order dated 30.03.2022, alleging that the authority passed the order without affording a proper opportunity of hearing and without considering the objections raised in the reply to the show cause notice. The petitioner contended that despite having an alternative remedy, the order should be set aside due to grave legal errors and violation of principles of natural justice.

The petitioner's counsel relied on various decisions, including Tin Box Co. vs. Commissioner of Income Tax (2001) 249 ITR 216 (SC), Milestone Brandcom Pvt. Ltd. vs. National Faceless Assessment Centre (2022) 441 ITR 470 (Bom), CCTEB India (P) Ltd. vs. Deputy Commissioner of Income Tax (2022) 6 NYPCTR 497 (Del), and Ketan Ribbons Pvt. Ltd vs. National Faceless Assessment Centre Delhi. The respondent's counsel, however, supported the impugned order, arguing that due opportunity of hearing was provided, and the petitioner had an alternative remedy available.

Upon hearing both parties and examining the record, the court found that the show cause notice was issued on 26.03.2022, and the petitioner filed a reply on 27.03.2022. Since the impugned order was passed after considering the petitioner's reply, the court held that the petitioner was given an opportunity of hearing. The court also noted that the failure to consider all grounds in the reply does not warrant interference under Article 226/227 and can be addressed through the statutory appeal process under the Income Tax Act, 1961.

Given that the petition was filed within 20 days of the assessment order and the petitioner has a further 30 days to file a statutory appeal, the court disposed of the writ petition, declining interference in the impugned order.