2024 (8) TMI 178 - HC - Income Tax

Validity of reassessment proceedings - Proceedings were ex-parte - as argued petitioner was not provided sufficient and reasonable opportunity to contest the proceedings by filing his reply documents, which is violative of principles of natural justice - HELD THAT - Contention as urged by the respondents that the present petition was not maintainable in the light of availability of equally efficacious and alternative remedy by way of appeal is concerned, in the light of the material on record which indicates that by the impugned proceedings were ex-parte as against the petitioner who was not provided sufficient and reasonable opportunity to contest the proceedings by filing his reply documents, which is violative of principles of natural justice, the said contention urged by the respondents cannot be accepted especially when the petitioner did not receive the impugned notice under Section 148A(b) on account of the same having been delivered to an inactive e-mail id which had been shut down more than five years. The returns filed by the petitioner for the Assessment Years up to 2017 18 and subsequent to 2018 19 have been assessed by the respondents who have collected the requisite taxes and the present case relates to only one isolated AY 2018-19 in relation to which the petitioner specifically contented that he was under the bonafide impression that total income would be less than that of basic exemption limited to the sum of Rs.2,50,000/- and was mistakenly advised that there was no requirement to file the return of income in the said AY 2018-19. It is also borne out from the material on record that the inability and omission on the part of the petitioner to file his reply along with the documents to the notice under Section 148A(b) was due to bonafide reasons, unavoidable circumstances and sufficient cause. The impugned notice, order etc., are violative of principle of natural justice and the same deserves to be quashed and the matter remitted back to the respondent No.1 for reconsideration afresh in accordance with law.

Summary

Issues Involved:
Petition seeking writs of Certiorari or direction to quash assessment order, computation sheets, notice of demand, penalty order, and related documents for the Assessment Year 2018-19. Challenge to the notice issued under Section 148A(b) and the subsequent order under Section 148A(d) due to non-receipt by the petitioner leading to violation of principles of natural justice. Argument regarding maintainability of the petition in light of alternative remedy through appeal.

Analysis:

1. Assessment Order and Related Documents:
The petitioner sought writs to quash the assessment order, computation sheets, notice of demand, and penalty order for the Assessment Year 2018-19. The petitioner contended that due to non-receipt of the notice under Section 148A(b), he was unable to participate in the proceedings, leading to a violation of principles of natural justice. The court noted that the petitioner had valid reasons for not responding to the notice, such as the notice being sent to an inactive email address. Consequently, the court quashed the impugned documents and remitted the matter back to the respondent for fresh consideration.

2. Notice Issued under Section 148A(b) and Subsequent Order:
The petitioner argued that the notice issued under Section 148A(b) and the subsequent order under Section 148A(d) were invalid due to non-receipt of the notice, which deprived the petitioner of the opportunity to respond and participate in the proceedings. The court found merit in the petitioner's argument, emphasizing the importance of principles of natural justice. As a result, the court quashed the impugned notice and order, directing the respondent to reconsider the matter afresh from the stage of the notice issuance.

3. Maintainability of the Petition:
The respondents contended that the petition was not maintainable due to the availability of an alternative remedy through an appeal. However, the court rejected this argument, considering the ex-parte nature of the proceedings against the petitioner and the lack of reasonable opportunity provided to contest the proceedings. The court emphasized that the petitioner's inability to respond to the notice was due to genuine reasons and circumstances beyond his control. Consequently, the court allowed the petition, quashed the impugned notices, and reserved liberty for the petitioner to file objections and documents in response to the notice under Section 148A(b).

In conclusion, the court granted the petitioner's request, quashed the impugned notices and orders, and directed the respondent to reconsider the matter afresh, ensuring the petitioner's right to be heard and participate in the proceedings in accordance with the principles of natural justice.