2023 (11) TMI 348 - HC - Income Tax

Validity of assessment u/s 144B - request for adjournment and VC ignored - without giving reasonable opportunity - violative of principles of natural justice - HELD THAT - The screen shots pellucidly depict that the request for adjournment and VC are made through the official web portal of the respondent. Therefore, it shall be deemed that the respondents have received the request for adjournment and VC sought for by the petitioner through her e-mail. Except denying the submission of the response by the petitioner by 07.03.2023, the respondent did not produce any cogent material to show that no such e-mail requests were made by the petitioner. Therefore, we believe the e-mail communication made by the petitioner seeking adjournment on medical grounds. The respondent neither granted time as sought for by the petitioner nor sent any refusal communication in time to the petitioner so as to enable her to submit her case on the date fixed by the respondents. Respondent passed the impugned order on 21.03.2023. The conspicuous silence of the respondents and passing of the impugned assessment order resulted in violation of principles of natural justice to the petitioner, inasmuch as, the respondents passed the impugned assessment order without giving fair opportunity to the petitioner to submit her case on the points raised by the respondents. Therefore, impugned order deserves to be set aside. It is trite law that availability of efficacious alternative remedy is not a bar for a constitutional Court to exercise its plenary jurisdiction under Article 226 of the Constitution of India when the concerned public authority passes an order in utter disdain to the principles of natural justice. WP allowed setting aside the impugned assessment order with a direction to the respondents to grant sufficient time to the petitioner to submit her detailed explanation along with relevant documents relied upon by her and thereupon the respondents shall afford an opportunity of hearing to petitioner through VC and pass an appropriate order in accordance with governing law and rules expeditiously.

Summary

Issues involved:
The issues involved in this case include the legality of the proceedings/order issued by the 1st respondent under the Income Tax Act without providing a reasonable opportunity, violation of principles of natural justice, and the subsequent assessment order passed by the respondent.

Details of the Judgment:

Issue 1: Lack of Opportunity and Violation of Natural Justice
The petitioner, engaged in excavator business, did not file returns for AY 2015-16 due to income below the exemption limit. The respondent reopened the case based on flagged information about property purchase and machinery rent. The petitioner filed ITR and responded to subsequent notices. However, the respondent issued a show cause notice proposing significant additions without considering the petitioner's request for extension due to illness. The petitioner's requests for extension and video conference were ignored, leading to the assessment order allegedly violating natural justice.

Issue 2: Respondent's Counter and Assessment Process
The respondent contended that the petitioner had alternative appeal remedies and failed to file returns initially. The respondent claimed to have followed due procedure in issuing notices and providing opportunities for the petitioner to respond. The respondent argued that ample opportunities were given, but the petitioner failed to provide explanations, thus justifying the assessment order.

Issue 3: Examination of Natural Justice Violation
The court scrutinized whether the assessment order violated natural justice principles. The petitioner presented evidence of requests for adjournment and video conference due to medical reasons, which were not adequately addressed by the respondent. The court found that the respondent's silence and passing of the order without fair opportunity breached natural justice, leading to the order being set aside.

Conclusion
The court allowed the writ petition, setting aside the assessment order and directing the respondents to grant the petitioner sufficient time for explanations and relevant document submission. The court emphasized the importance of natural justice and the need for fair opportunities in assessment proceedings, ordering a new assessment process with proper adherence to the law and rules.

This summary provides a detailed breakdown of the judgment, highlighting the key issues, arguments presented by both parties, and the court's decision regarding the violation of natural justice in the assessment process.