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2023 (5) TMI 845 - HC - Income TaxReopening of assessment - validity of notice issued u/s 148A(b) and order passed u/s 148A(d) - Assessee seeking accommodation - principal allegation against the petitioner is that he has failed to disclose the entire sale consideration concerning the subject properties - HELD THAT - A show cause notice was issued on 17.02.2023, which required a response to be filed by 23.02.2023. The petitioner, evidently, made a request for accommodation on 23.02.2023 to seek time up until 07.03.2023. We are told that the reason given for seeking accommodation was that the petitioner had to gather the material relevant for his defence. It appears that without dealing with the request for accommodation, the AO passed the impugned assessment order dated 03.03.2023. Clearly, the petitioner was not heard in support of his stand. There is, therefore, if nothing else, a breach of principles of natural justice, as the AO, without dealing with the request for accommodation, proceeded to pass the impugned assessment order dated 03.03.2023. On this singular ground, we are inclined to set aside the impugned assessment order dated 03.03.2023 and the order passed under Section 148A(d) - consequential notice issued under Section 148 of the Act shall also collapse.
Issues:
The judgment concerns Assessment Year (AY) 2018-19 and is directed against the assessment order dated 03.03.2023 passed under Section 147, read with section 144B of the Income Tax Act, 1961. Additionally, challenge is laid to the notice dated 17.03.2022 issued under Section 148A(b) and the order dated 31.03.2022 passed under Section 148A(d) of the Act. Challenge is also laid to the consequential notice dated 31.03.2022 issued under Section 148 of the Act. Assessment Order and Allegations: The petitioner was alleged to have failed to disclose the entire sale consideration concerning certain properties, leading to an allegation of income escaping assessment. The assessment order highlighted a discrepancy in the sale consideration shown in the registered deed compared to the actual sale consideration, resulting in a shortfall that needed to be added back for calculating capital gains. Proceedings and Breach of Natural Justice: The petitioner responded to the notice issued under Section 148A(b) of the Act, but the Assessing Officer (AO) proceeded to pass an order under Section 148A(d) without granting sufficient opportunity for the petitioner to explain the alleged discrepancies. The AO's decision was based on the belief that income had escaped assessment due to high-value transactions involving a cash component. Judgment and Relief Granted: The court found that the petitioner was not adequately heard in defense of the allegations, leading to a breach of natural justice. As a result, the court set aside the impugned assessment order and related orders. The AO was directed to consider the petitioner's reply to the notice dated 17.02.2023, grant a personal hearing, and pass a fresh order. The consequential notice issued under Section 148 of the Act was also invalidated, and the petitioner was given four weeks to respond to the notice dated 17.02.2023. Conclusion: The writ petition was disposed of with the above directions, and parties were instructed to act based on the digitally signed copy of the order.
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