2022 (12) TMI 760 - HC - Income Tax

Validity of reopening of assessment u/s 147 - Order u/s 148A(d) - denial of natural justice - petitioner to challenge the assumption of jurisdiction by the authorities on the ground that the precondition u/s 149(1)(b) has not been satisfied in this case - short point argued by the learned counsel for the petitioner is that the order has come to be passed without considering the request for adjournment that has been filed by the petitioner - HELD THAT - It is incumbent upon the authority to have either accepted the same, in which case, time sought ought to have been granted, or to put the petitioner to notice that the officer is rejecting the request. Neither of this has been done and the impugned order has come to be passed unilaterally on 29.03.2022 itself. On this one ground, the impugned order stands vitiated. It is also the attempt of the petitioner to challenge the assumption of jurisdiction by the authorities on the ground that the precondition u/s 149(1)(b) has not been satisfied in this case. This is a question of fact that the petitioner will have to establish before the authorities and thus the Court says nothing further on this score. In view of the violation of principles of natural justice, order dated 29.03.2022 is set aside. The petitioner is granted two (2) weeks from date of receipt of a copy of this order to file its reply, for which purpose, the portal shall be enabled. On receipt of reply from the petitioner, the time frame set out u/s 148A(d) will stand triggered and the officer will decide on the basis of the materials available on record including the reply of the assessee whether or not it is a fit case to issue notice u/s 148 by passing a speaking order with the previous approval of the specified authority. It is made clear that if no response is filed by the petitioner within a time stipulated above, for which the liberty has been granted under this order, the impugned order will stand revived unilaterally and all consequences will flow from the same.

Summary

Issues:
Challenge to order under Section 148A(d) of the Income Tax Act, 1961 and jurisdictional challenge under Section 149(1)(b).

Analysis:

1. Challenge to Order under Section 148A(d):
The writ petition challenges an order dated 29.03.2022 passed under Section 148A(d) of the Income Tax Act, 1961. The petitioner argued that the order was passed without considering their request for adjournment made on 28.03.2022. The petitioner had requested 15 days to respond to a show cause notice issued under Section 148A(b) dated 20.03.2022. However, the officer did not address this request in the order dated 29.03.2022. The court held that the authority should have either accepted the request and granted the time sought or informed the petitioner of the rejection. Since neither was done, the impugned order was deemed vitiated due to a violation of principles of natural justice.

2. Jurisdictional Challenge under Section 149(1)(b):
The petitioner also challenged the assumption of jurisdiction by the authorities, contending that the precondition under Section 149(1)(b) was not satisfied. The court noted that this is a question of fact that the petitioner needs to establish before the authorities, and the court refrained from further comment on this issue. The court emphasized that the petitioner must address this challenge before the authorities, indicating that it is a separate matter from the violation of natural justice in the impugned order.

3. Court's Decision and Directions:
In view of the violation of principles of natural justice, the court set aside the order dated 29.03.2022. The petitioner was granted two weeks from the receipt of the court's order to file a reply, with the portal being enabled for this purpose. Upon receiving the reply, the officer would decide, based on the materials available including the reply, whether to issue a notice under Section 148. The court clarified that if no response was filed within the stipulated time, the impugned order would stand revived unilaterally, with all consequences flowing from it. The writ petition was disposed of with no costs, and connected miscellaneous petitions were closed accordingly.