2024 (6) TMI 1299 - HC - Income Tax

Validity of assessment - providing shorter period one day to reply to SCN - violation of principles of natural justice - HELD THAT - As show cause notice provided one day's time for the petitioner to reply, this was clearly not reasonable. Amount received in the South Indian Bank - A statement from the South Indian Bank to the effect that the amount received in the bank account was Rs. 42,92,330/- and not Rs. 85,84,660/- was submitted by the petitioner as an attachment to the reply dated 17.03.2024. Therefore, the impugned order is set aside and the matter is remanded for reconsideration. On perusal of the impugned assessment order, find no consideration of these contentions or documents. For these reasons, the impugned order is not sustainable - Assessee appeal allowed.

Summary

Issues:
Challenge to assessment order on grounds of breach of principles of natural justice.

Analysis:
The petitioner challenged an assessment order dated 24.03.2024, alleging a breach of natural justice principles. The assessment was reopened under Section 148A(d) and notices were issued under various sections of the Income Tax Act. The petitioner responded to the notices, disputing the amount received in the bank and providing documents to support their claim. However, the impugned order did not discuss these submissions, leading to the challenge on the basis of lack of consideration of petitioner's contentions.

Analysis Continued:
The petitioner contended that the amount received in the bank was lower than what was stated in the order, supported by a certificate from the bank. The respondent argued that the petitioner failed to respond to several notices and did not satisfactorily explain the cash deposits, leading to the confirmation of variations. The respondent claimed that the impugned order was reasoned and offered a personal hearing through video conferencing.

Analysis Continued:
The court observed that the show cause notice provided only one day for the petitioner to reply, which was deemed unreasonable. The petitioner consistently maintained that the deposits were not income but contributions from members for chit savings. Despite this, the impugned order did not address these contentions or consider the documents submitted by the petitioner, rendering it unsustainable.

Analysis Continued:
Consequently, the court set aside the impugned order and remanded the matter for reconsideration. The petitioner was granted 15 days to submit additional documents, with the respondents directed to facilitate the process. The first respondent was instructed to provide a reasonable opportunity, including a personal hearing, and issue a fresh assessment order within three months from receiving the additional documents.

Analysis Continued:
The Writ Petition was disposed of with no order as to costs, and the connected miscellaneous petitions were closed accordingly.