2023 (11) TMI 655 - HC - Income Tax

Validity of order passed u/s 144 r.w.s. 147 - denial of natural justice - As stating that the petitioner had not responded to the notices issued by the respondent Bank informed about the attachment order passed by the Department attaching the bank account of the petitioner - HELD THAT - On perusal of the records, it is an admitted fact that the Authorised representative of the petitioner was passed away on 29.12.2017. Thereafter, the notice under Section 148 of the IT Act was issued on 31.03.2021 by way of post and the same was received by the petitioner on 03.04.2021. Thereafter, all the notices were uploaded in the e-portal and the e-portal was also accessed by the petitioner. In fact, the assessment order also sent by virtue of post and the acknowledgement card was filed before this Court. As stated in counter affidavit of the respondent, between the period of date of issuance of notice and till the date of assessment, the assessee had accessed the e-portal for filing the income tax returns for assessment year 2021-2022 and for filing the audit report for the assessment year 2021- 2022. When such being the case, find no force in the submissions of the petitioner that the impugned order was passed in violation of principal of natural justice since the respondent had already taken all the efforts to send the notices to the petitioner through physically as well as by uploading the same in the e-portal. Further, it is clear that only due to inaction on the part of petitioner in filing the reply, this assessment order came to be passed. Assessee themselves had given up their rights for personal hearing and filing of reply in the present case. However, in the scheme of the IT Act, the assessee will have two opportunities to present their case. One is before the Assessing Officer and another is before the Appellate Authority. The Appellate Authority will also have similar power of the Assessing Officer to adjudicate the petitioner s case. Hence, once a person had given up his rights, he cannot claim it back as he lost his opportunity. In such situation, he has to avail the second opportunity to present their case before the Appellate Authority. Decided against assessee.

Summary

Issues involved:
The challenge to an order passed under Section 144 read with Section 147 of the Income Tax Act, 1961 on grounds of violation of natural justice.

Summary:

Issue 1: Violation of natural justice in passing the impugned order
The petitioner challenged the impugned order passed by the respondent under Section 144 read with Section 147 of the Income Tax Act, 1961, alleging a lack of response to notices and violation of natural justice. The petitioner claimed ignorance of the order until the bank informed about the attachment of the bank account. The respondent, however, contended that notices were duly served on the petitioner, who had accessed the e-portal for filing returns and audit reports. The court noted that the petitioner's authorized representative had passed away, but the petitioner had accessed the e-portal and received the assessment order. The court found that the respondent had made efforts to notify the petitioner both physically and through the e-portal, and the assessment order was a result of the petitioner's inaction in responding.

Issue 2: Rights of the assessee in the assessment process
The court observed that the petitioner had voluntarily given up the rights of filing a reply and personal hearing before the Assessing Officer. It was emphasized that under the IT Act, the assessee has two opportunities to present their case - before the Assessing Officer and the Appellate Authority. As the petitioner had forfeited the first opportunity, the court held that they must utilize the second opportunity before the Appellate Authority. Consequently, the court dismissed the writ petition but granted the petitioner 30 days to file an appeal before the Appellate Authority, ensuring a fair consideration without limitation constraints.

Conclusion:
The court dismissed the writ petition challenging the impugned order, emphasizing the petitioner's access to the e-portal and the forfeiture of rights in the assessment process. The petitioner was granted a period to appeal before the Appellate Authority, maintaining the principles of natural justice and procedural fairness in the tax assessment proceedings.