2023 (6) TMI 822 - HC - Income Tax

Validity of Reassessment order u/s 148A - violation of principles of natural justice - no opportunity of personal hearing was granted to the assessee - HELD THAT - Admittedly, no opportunity of personal hearing was granted to the assessee. In the order passed u/s 148A(d) there is a reference to certain transactions done by two companies. Admittedly, in the show cause notice there was no such allegation concerning these two companies qua the appellant/assessee. Also hearing was not fixed by the AO on 29.03.2022. But the show cause notice states that the e-response should be filed by the assessee not later than 29.03.2022. Therefore, this is also an error committed by the Assessing Officer. Thus there has been violation of principles of natural justice - The writ petition is allowed. The order passed u/s 148A(d) is set aside and the matter is remanded back to the Assessing Officer for fresh consideration.

Summary

Issues involved:
The appeal against the order passed under Section 148A(d) of the Income Tax Act, 1961 based on violation of principles of natural justice.

Issue 1: Violation of principles of natural justice

The writ petitioner filed a petition challenging the order passed by the respondent under Section 148A(d) of the Income Tax Act, 1961, citing violation of principles of natural justice. The learned Single Bench dismissed the writ petition, stating that all issues can be raised in the re-assessment proceedings. The appellant, aggrieved by this decision, preferred the present appeal.

Issue 2: Error in assessment proceedings

Upon perusing the show cause notice issued by the Assessing Officer under Section 148A(b), it was found that certain allegations were made against the appellant/assessee regarding transactions with specific companies. However, the appellant had responded within the given timeframe and submitted necessary documents. It was noted that no opportunity for a personal hearing was provided to the assessee, and there were discrepancies in the communication and documentation process by the Assessing Officer. This led to a conclusion that there was a violation of principles of natural justice, necessitating a fresh decision.

In conclusion, the High Court of Calcutta allowed the appeal, setting aside the order passed under Section 148A(d) of the Act. The matter was remanded back to the Assessing Officer for a fresh decision. The Assessing Officer was directed to provide all relevant information concerning the companies involved and grant the assessee 15 days to submit a short additional response. Furthermore, an opportunity for a personal hearing was to be provided before a fresh order could be passed on merits and in accordance with the law.