2024 (4) TMI 804 - HC - Income Tax

Validity of assessment order - as argued without giving the petitioner an opportunity to reply by granting adjournment, the second respondent has now passed the assessment order by adding a further sum towards addition u/s 68 - petitioner requested for adjournment in response to the earlier show cause notice which was denied - HELD THAT - Without giving the petitioner an opportunity to reply by granting adjournment, the second respondent has now passed the assessment order by adding a further sum towards addition u/s 68 of the Income Tax Act, 1961. Thus, the impugned order has been passed in violation of principles of natural justice. Therefore, it is liable to be interfered with under Article 226 of the Constitution of India. Accordingly, the impugned order passed by the first respondent is quashed and the case is remitted back to the first respondent to pass fresh orders within a period of 90 days from the date of receipt of a copy of this order. It is made clear that the impugned order and the show cause notice shall be read compendiously and a reply to the same shall also be filed by the petitioner within a period of 30 days from the date of receipt of a copy of this order

Summary

Issues involved: Writ Petition for Certiorarified Mandamus to quash the impugned order for assessment year 2018-19 and direct completion of fresh assessment after granting opportunity of hearing.

Summary:

Issue 1 - Violation of principles of natural justice:
The petitioner filed a Writ Petition seeking to quash the order passed by the first respondent for the assessment year 2018-19 and to direct a fresh assessment after providing a reasonable opportunity of hearing. The petitioner received a show cause notice proposing additions to the taxable income, but was not given sufficient time to respond. Despite requesting an adjournment, the assessment order was passed adding a further sum under Section 68 of the Income Tax Act, 1961, without allowing the petitioner to reply. The court held that the impugned order was passed in violation of principles of natural justice and quashed it under Article 226 of the Constitution of India.

Outcome:
The impugned order dated 13.09.2021 was quashed, and the case was remitted back to the first respondent to pass fresh orders within 90 days. The petitioner was directed to file a reply within 30 days, and the respondents were instructed to enable the portal for receiving the reply. The Writ Petition was allowed with no costs, and connected Miscellaneous Petitions were closed.