2022 (5) TMI 1651 - HC - Income Tax

Validity of the assessment order passed u/s 147 r/w 144 and 144B - violation of principles of natural justice - as argued that since the notices were posted only in the Web Portal, there was no visible opportunity to the petitioner to respond the same, therefore, the petitioner may be permitted to treat the said notice as a fresh one - HELD THAT - According to the petitioner, the show cause notice was not served on him and that the notices as well as the subsequent impugned assessment order were uploaded only in the web portal, which the petitioner was able to retrieve only belatedly. Therefore, this court is of the view that, if one chance is given to him, certainly, the petitioner/assessee would reply to the show cause notice and face the assessment. The impugned order can be set aside and the matter can be remitted back to the respondents with a direction to the respondents to give one more opportunity to the petitioner to respond to the show cause notice - The impugned assessment order is set aside and the matter is remitted back to the respondents for reconsideration.

Issues:
1. Validity of the assessment order passed under Section 147 r/w 144 and 144B of the Income Tax Act.
2. Allegation of lack of opportunity to respond to show cause notices.
3. Request for setting aside the impugned assessment order and granting a fresh opportunity to respond to the show cause notice.

Analysis:
1. The petitioner filed a writ petition seeking to quash the assessment order passed under Section 147 r/w 144 and 144B of the Income Tax Act. The petitioner, engaged in lorry transport business previously managed by the deceased father, alleged that the assessment was completed ex-parte without providing a reasonable opportunity to respond. The petitioner claimed that crucial notices were uploaded on the ITBA portal, which he accessed belatedly. The petitioner argued that the assessment order did not reflect the actual taxable income and sought its quashing on the grounds of arbitrariness.

2. The petitioner contended that apart from the assessment order, no show cause notice was served directly, and the notices were only posted on the web portal, limiting his ability to respond effectively. The petitioner requested the court to treat the notice as a fresh one to enable a proper response within a reasonable time. The counsel for the respondents argued that all necessary notices, including the final show cause notice, were duly issued, and there was no violation of natural justice principles. The court acknowledged the petitioner's difficulty in accessing the notices on time and emphasized the importance of providing a fair opportunity to respond.

3. After hearing both parties, the court concluded that the petitioner should be given another chance to respond to the show cause notice dated 16.03.2022. The court set aside the impugned assessment order and directed the matter to be reconsidered by the respondents. The petitioner was granted two weeks to respond to the notice, treating it as a fresh opportunity. The court instructed the Revenue to facilitate the process through the web portal and keep it open for further communication with the assessee. The writ petition was allowed, with costs denied, and related petitions were closed.

This judgment highlights the significance of procedural fairness in tax assessments and underscores the importance of providing adequate opportunities for taxpayers to participate in the process. The court's decision to set aside the assessment order and grant a fresh chance to respond reflects a commitment to upholding principles of natural justice and ensuring a fair determination of tax liabilities.

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