2023 (10) TMI 273 - HC - Income Tax

Validity of passed u/s 143(3A) and 143(3B) - impugned order has been passed without issuance of notice and therefore the impugned order suffers from gross violation of principles of natural justice - HELD THAT - As per Section 4 of the Contract Act, 1872, communication of proposal is complete when it comes to the knowledge of the person to whom it is made. The principle in Section 4 of the Contract Act, 1872 can be invoked universally for all situations. Since there is no proof of service of draft order and/or show cause notice on the petitioner and since the respondent is also unable to confirm the communication of the draft order and show cause notice on the petitioner, it has to be construed that there is no service to the petitioner. We find merits in the submission of the petitioner. The impugned order is unsustainable. Therefore, this writ petition deserves to be allowed . This writ petition is allowed by directing the respondent to pass a fresh order on merits within a period of 75 days from the date of receipt of this order. The respondent shall also serve a copy of the draft assessment order and show cause notice on the petitioner within a period of 15 days from the date of receipt of this order. The petitioner shall file reply to the show cause notice within a period of 30 days thereafter. The respondent shall pass thereafter appropriate orders on merits, within a period of 30 days.

Summary

Issues involved:
The challenge to the impugned Assessment Order passed under Section 143(3A) and 143(3B) of the Income Tax Act, 1961 for the Assessment Year 2018-2019 based on the lack of issuance of notice.

Issue 1: Lack of issuance of notice

The petitioner challenged the Assessment Order on the grounds of violation of principles of natural justice due to the absence of a notice dated 15.01.2021. The respondent's counter acknowledged the absence of records confirming the delivery of the show cause notice and draft assessment order to the petitioner. The respondent committed to sending the show cause notice by email and completing the assessment proceedings in accordance with the law.

The defence of the respondent was based on the lack of records confirming the service of the draft order and show cause notice to the petitioner. Referring to Section 4 of the Contract Act, 1872, the court highlighted that communication of a proposal is only complete when it comes to the knowledge of the recipient. As there was no proof of service or confirmation of communication of the draft order and show cause notice to the petitioner, the court concluded that there was no valid service to the petitioner.

The court found merit in the petitioner's submission, deeming the impugned order unsustainable. Consequently, the writ petition was allowed, directing the respondent to pass a fresh order on merits within 75 days. The respondent was also instructed to serve a copy of the draft assessment order and show cause notice on the petitioner within 15 days, with the petitioner required to reply within 30 days. Subsequent appropriate orders were to be passed within 30 days, ensuring the petitioner's right to be heard either in person or through Video Conference. No costs were awarded, and connected miscellaneous petitions were closed.