2023 (1) TMI 1161 - HC - Income Tax

Reopening of assessment u/s 147 - validity of order passed u/s 148A issued in the wrong name and PAN number - non consideration of reply sent by the petitioner - HELD THAT - The respondents have accepted the mistake in the counter affidavit filed by them before this Court but however they had stated that there is typographical mistake. When a categorical stand has been taken by the petitioner that he is not the owner of the subject property which is also disclosed in his reply dated 24.03.2022, which was admittedly received by the second respondent on 30.03.2022 even prior to passing of the impugned order dated 31.03.2022 at 6.30 p.m., this Court is of the considered view that the second respondent ought to have given due consideration to the reply dated 24.03.2022 sent by the petitioner in the impugned order dated 30.03.2022, however since the same has not been given due consideration and that too when the impugned order has wrongly disclosed the name of Muktha Seth and wrong PAN number has been given whereas the petitioner's name is Devarajulu Jayakothandaraman and his PAN number is different, this Court is of the considered view that by total non-application of mind and by violating the principles of natural justice, the second respondent has passed the impugned order u/s 148A(d) of the Act and has erroneously issued the consequential notice dated 31.03.2022 to the petitioner under Section 148 and, therefore, the impugned order as well as the consequential notice will have to be quashed by this Court and remand it back to the second respondent for fresh consideration on merits and in accordance with law. Since the petitioner claims that he was not given sufficient time to send detailed reply to the notice dated 17.03.2022, this Court is of the considered view that the petitioner must be given an opportunity to send additional reply to the one already sent on 24.03.2022 to the second respondent. Thus the impugned order dated 30.03.2022 as well as the consequential order dated 31.03.2022 issued by the second respondent are hereby quashed and the matter is remanded back to the second respondent for fresh consideration on merits and in accordance with law.

Summary

Issues:
Challenge to impugned order under Section 148A of the Income-Tax Act, 1961.

Analysis:
The petitioner challenged the impugned order passed under Section 148A of the Act, citing various grounds. Firstly, the petitioner argued that the order was a nullity as his name was wrongly mentioned as Muktha Seth instead of Devarajulu Jayakothandaraman. Secondly, the petitioner claimed that although he replied to the notice within the stipulated time, the reply was not considered in the impugned order, leading to a violation of principles of natural justice. Additionally, the petitioner contended that he was entitled to send the reply through the e-portal but had to do so physically due to issues with his PAN number. The petitioner also disputed ownership of the property mentioned in the notice, asserting that it was not his and requested the proceedings against him be dropped. The petitioner further argued that the impugned order wrongly disclosed the name and PAN number, which did not match his details. The second respondent denied the allegations and maintained that the petitioner did not send a reply within the specified time frame, despite evidence presented by the petitioner showing dispatch and receipt dates of the reply.

The Court observed that the reply sent by the petitioner was received before the impugned order was passed, and the second respondent should have considered it. The Court noted that the petitioner's claim of not owning the mentioned property was not supported by evidence and that the second respondent had admitted the typographical error in mentioning the petitioner's name. The Court found that the impugned order and consequential notice were issued erroneously, without due consideration of the petitioner's reply and in violation of natural justice principles. Consequently, the Court quashed the impugned order and remanded the matter back to the second respondent for fresh consideration, directing the petitioner to submit an additional reply within two weeks. The second respondent was instructed to pass final orders within one month, considering both replies in accordance with the law.

In conclusion, the Court disposed of the writ petition, quashing the impugned order and consequential notice, and remanding the matter for fresh consideration. The petitioner was granted the opportunity to submit an additional reply, and the second respondent was directed to pass final orders within the specified timeframe, adhering to legal provisions under Section 148(d) of the Act.