2024 (8) TMI 46 - HC - Income Tax

Validity of reopening of assessment u/s 147 - Opportunity of hearing not granted to the petitioner before passing the impugned order - HELD THAT - Respondent fairly stated that the petitioner was not provided an opportunity of hearing and the matter may be remanded back to the respondent-AO so as to enable the petitioner to file a reply to the notice u/s 148B because keeping this matter pending in this Hon ble Court would delay the re-assessment proceedings, if required to be re-opened after considering the reply of the petitioner and giving opportunity of hearing to the petitioner. Considering the above submissions, the impugned notice issued under Section 148 of the Act and the order passed u/s 148A(d) are hereby quashed and set aside remanding the matter back to the respondent-AO so as to grant an opportunity of hearing to the petitioner to file a reply as provided u/s 148A(b) of the Act. The respondent is directed to give an opportunity of hearing to petitioner in compliance of the above provisions of the Act. The petition is accordingly disposed of.

Issues:
1. Petition under Article 226 of the Constitution of India seeking quashing of an order u/s 148A(d) and notice u/s 148.
2. Opportunity of hearing not granted to the petitioner before passing the impugned order.
3. Remand of the matter back to the Assessing Officer to grant an opportunity of hearing to the petitioner.

Analysis:

Issue 1:
The petitioner filed a petition under Article 226 of the Constitution of India, seeking the High Court to quash the impugned order u/s 148A(d) dated 30.03.2022 and the notice issued u/s 148 dated 31.03.2022. The petitioner requested various reliefs, including a writ of certiorari, mandamus, and to stay further proceedings. The petitioner declared a loss in the return of income for Assessment Year 2018-19, and the assessment order was passed by the respondent under Section 148A(d) of the Income Tax Act, 1961.

Issue 2:
The main contention raised by the petitioner was that the respondent did not grant an opportunity of hearing before passing the impugned order under Section 148A(d) of the Act. The respondent issued a notice under Section 148A of the Act on 17.03.2021, requiring a reply by 24.03.2022. Despite the petitioner seeking more time, the respondent passed the order on 30.03.2022 without allowing the petitioner to file a reply. The respondent subsequently issued a notice under Section 148 on 31.03.2022 for the re-opening of the assessment for the relevant year.

Issue 3:
During the proceedings, the petitioner's counsel argued that the respondent should have provided an opportunity of hearing as per Section 148A(b) of the Act, which allows the assessee to file a reply within a specified time. The respondent's counsel acknowledged the lack of opportunity given to the petitioner and suggested remanding the matter back to the Assessing Officer to enable the petitioner to respond to the notice under Section 148B of the Act. The High Court, considering the submissions, quashed the impugned notice and order, directing the Assessing Officer to grant the petitioner an opportunity of hearing as per the provisions of the Act.

In conclusion, the High Court ruled in favor of the petitioner, setting aside the impugned notice and order, and remanding the matter back to the Assessing Officer for providing an opportunity of hearing to the petitioner in compliance with the relevant provisions of the Income Tax Act.

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