2023 (6) TMI 525 - HC - Income Tax

Reopening of assessment - assessee had not responded to the notice u/s. 148A(b) - application seeking adjournment by the petitioner to file reply to the notice u/s 148A(b) made by assessee - Non availing the opportunity to defend its case to the petitioner - petitioner had submitted its request and the portal had received it, however, for some technical snag, its confirmation was not found and because of that reason, the petitioner remained deprived any further time to file reply, though requested for as above - HELD THAT - There is no gainsaying that the impugned order and the notice passed under section 148A(d) and 148 of the Act respectively, remain without availing the opportunity to defend its case to the petitioner. There was an evident breach of principles of natural justice. Observance of natural justice is essential part of quasi judicial process. When the provisions of section 148A themselves provide expressly for giving opportunity of hearing to the assessee, it was indispensable for the department to extend the reasonable opportunity to the petitioner to respond to the notice to put forth his case. It was some technical snag on the portal, which deprived the petitioner of such opportunity. The petitioner deserves to be given due opportunity. The impugned order passed u/s 148A(d)and notice of even date passed u/s 148 are hereby set aside only on the ground that the petitioner was deprived of opportunity pursuant to notice dated 21.3.2022 under section 140A(b) of the Act.

Summary

Issues Involved:
The issues involved in this case are related to the validity of the order passed by the Assessing Officer under section 148A(d) of the Income Tax Act, 1961 and the notice issued under section 148 of the Act for Assessment Year 2018-2019. The main contention is whether the petitioner was deprived of the opportunity to respond to the show cause notice issued under section 148A(b) of the Act, thus violating the principles of natural justice.

Summary of the Judgment:
The petitioner, a partnership firm, filed its return of income for the Assessment Year 2018-2019, declaring a total income. The respondent Income Tax authorities issued a notice under section 148A(b) of the Act, alleging that bogus invoices were issued by another entity. The petitioner requested an adjournment through the portal, but the Assessing Officer passed an order under section 148A(d) stating that income had escaped assessment. The petitioner claimed they were not given a fair opportunity to respond to the notice, as the adjournment request was not visible on the portal.

The respondent authorities argued that the petitioner failed to reply within the stipulated time and that the notice under section 148 was issued to prevent time-barred proceedings. They contended that the petitioner's claim of a violation of natural justice was misconceived. The respondent highlighted that every notice is issued after online approval at higher levels in the hierarchy.

The Court found that the petitioner's adjournment request was successfully uploaded on the portal, but confirmation was not visible due to a technical issue. It was established that the petitioner was deprived of the opportunity to defend their case, constituting a breach of natural justice. The Court emphasized that observance of natural justice is crucial in quasi-judicial processes and that the department should have extended a reasonable opportunity to the petitioner to respond.

Consequently, the Court set aside the impugned order and notice on the grounds of depriving the petitioner of the opportunity following the initial notice. The Court directed the proceedings to be remanded to the competent authority, granting the petitioner two weeks to respond to the notice. The competent authority was instructed to conclude the proceedings within six weeks after receiving the petitioner's reply.

In conclusion, the petition was allowed, and the Court provided specific directions to ensure the petitioner's right to a fair opportunity to respond and defend their case in accordance with the law.