2023 (7) TMI 29 - HC - Income Tax

Validity of assessment u/s 153C - petitioner was issued six separate notices of even date u/s 153C - petitioner had asked for 30 days to respond to the said notice - HELD THAT - As via notice dated 14.03.2023, 30 days time had been granted to file the return.Unfortunately for the petitioner, the AO passed the impugned assessment orders dated 28.03.2023, without granting the time sought for by the petitioner. Although representations were made thereafter by the petitioner for each of the assessment years on 12.04.2023, requesting the respondent to refrain from initiating penalty proceedings, there has been no movement in the matter. Given this position, AO had put the petitioner on an extremely tight leash. AO expected the petitioner to gather information for six AYs within two days, which by any yardstick was not a practical timeframe. This is especially so, as the AO, while issuing notice under Section 153C of the Act, had granted 30 days to the petitioner to file the return of income concerning the AYs in issue. Thus, for the foregoing reasons, we are inclined to set aside the impugned assessment orders.

Summary

Issues involved:
The judgment concerns the challenge to six separate assessment orders of different Assessment Years (AY) under the Income Tax Act, 1961, based on the breach of principles of natural justice.

Details of the Judgment:

Assessment Orders and Notices:
The petitioner challenged the assessment orders and demand notices issued under the Income Tax Act, alleging a breach of natural justice. The petitioner was given short periods to file returns and provide information for multiple AYs.

Breach of Natural Justice:
The petitioner argued that the Assessing Officer (AO) did not grant the requested time to respond to notices, leading to an unfair assessment process. Despite representations made by the petitioner, no action was taken to address the concerns raised.

Judgment and Relief:
The Court found that the AO's actions were unreasonable, expecting the petitioner to gather information for multiple AYs within an impractical timeframe. As a result, the Court set aside the assessment orders and consequent demand notices.

Fresh Exercise and Directions:
The Court allowed the AO to conduct a fresh assessment process, starting from the stage when the initial notice was issued. The petitioner was directed to respond and provide relevant information within four weeks. The AO was instructed to provide all necessary information to the petitioner and grant a personal hearing to the authorized representative.

Disposition of Writ Petitions:
The writ petitions were disposed of with the above directions, and pending applications were closed. Parties were instructed to act based on the digitally signed copy of the order, ensuring compliance with the Court's decision.