2023 (7) TMI 1095 - HC - Income Tax

Validity of reopening of assessment - allegation of violation of the process mandated under Section 144B(6)(viii) as not granting personal hearing - exemption u/s 54 denied to assessee for the reason that the sale consideration in question was spent in purchase of another immovable property in the name of her son and not in her own name - assessee disclosing her condition with medical records, the petitioner sought adjournment for 15 days to respond to the show cause notice but the Assessment Officer allowed her time only till 04.03.2023 - according to the petitioner, she had specifically requested for personal hearing in order to explain that the sale consideration of the immovable property was spent by her to purchase another immovable property in the name of her son owing to her medical condition; but even personal hearing was not granted to the petitioner and the same is not just in violation of the process mandated u/s 144B(6)(viii) HELD THAT - As mentioned above, learned counsel for respondent revenue in all fairness conceded that petitioner deserves a fair hearing on the issues. In the overall circumstances described above, the impugned assessment order as well as the consequent demand notice, both dated 15.03.2023 are set aside and the matter is remanded to the Assessment Officer to proceed further in accordance with law, of course, with due consideration to the judicial precedents referred to in the reply dated 04.03.2023 of the petitioner and after granting her a fair opportunity to be heard in person or through authorized representative.

Summary

Issues involved:
The writ petitioner assailed an order under Section 147 read with Section 144B of the Income Tax Act for the Assessment Year 2018-19, coupled with a demand notice under Section 156 of the Act, both dated 15.03.2023.

Details of the Judgment:

Issue 1: Validity of the assessment order and demand notice
The petitioner challenged the order initiating reassessment proceedings under Section 148A(d) of the Income Tax Act for the Assessment Year 2018-19. The petitioner, a bedridden terminally ill lady, was alleged to have not filed her income tax return despite receiving sale consideration and rental income. The petitioner filed a belated return disclosing the income and seeking exemption under Section 54 of the Act. The revenue issued a show cause notice questioning the exemption claimed. The petitioner sought adjournment due to her medical condition, but limited time was granted. The impugned assessment order and demand notice were subsequently passed. The court noted the lacunae in the assessment process and directed the matter to be remanded to the Assessment Officer for further proceedings in accordance with law, considering the judicial precedents cited by the petitioner.

Issue 2: Denial of fair hearing
The petitioner contended that she was not granted a fair hearing on the issues raised. Despite requesting a personal hearing to explain the utilization of sale consideration for purchasing another property in her son's name due to her medical condition, no personal hearing was granted. The petitioner argued that the denial of a fair hearing violated the process mandated under Section 144B(6)(viii) of the Act and was an abrogation of natural justice. The court acknowledged the need for the petitioner to have a fair hearing and set aside the assessment order and demand notice, remanding the matter for further proceedings with due consideration to the petitioner's contentions and judicial precedents cited.

Conclusion:
In light of the circumstances, the High Court set aside the impugned assessment order and demand notice dated 15.03.2023 and remanded the matter to the Assessment Officer for proper consideration of the petitioner's submissions and granting her a fair opportunity to be heard. The writ petition and application were disposed of accordingly, with the file to be consigned to records.