2024 (8) TMI 226 - HC - Income Tax

Validity of reopening of assessment u/s 147 - non-consideration of the petitioner's detailed response against notice - HELD THAT - As detailed response / reply submitted by the petitioner has not been considered or appreciated by the respondents, which is sufficient to vitiate the impugned order. Under these circumstances, non-consideration of the aforesaid reply / response of the petitioner, by passing the impugned unreasoned and non-speaking order, is violative of principles of natural justice and on this ground alone, the impugned order is liable to be set aside and the matter be remitted back to the respondents for reconsideration afresh in accordance with law.

Summary

Issues:
Petitioner seeks writs of Certiorari and Mandamus under Article 226 of the Constitution of India to quash and set aside impugned notices and orders issued by Respondent No.1 under the Income Tax Act. The main contention is the non-consideration of the petitioner's detailed response by the respondents before passing the impugned order.

Analysis:

1. Consideration of Petitioner's Response:
The petitioner submitted a detailed reply along with documents in response to the Notice dated 24.02.2023 issued by the 1st respondent under Section 148A(b) of the Income Tax Act. However, the impugned order dated 31.03.2023, passed under Section 148A(b), did not consider or appreciate the petitioner's response. The Court held that this non-consideration of the petitioner's reply violated principles of natural justice, rendering the impugned order invalid. The matter was remitted back to the respondents for reconsideration in accordance with the law.

2. Impact of Pending Appeals:
The petitioner had filed appeals for previous assessment years (2016-17, 2017-18, and 2018-19), which were pending before the Appellate Authority. The petitioner argued that the outcome of these appeals would directly affect the jurisdiction of the respondents to issue the impugned notice under Section 148A(b). The Court acknowledged this argument and directed the Appellate Authority to dispose of the pending appeals within three months. It further directed the respondents to proceed with the matter only after the disposal of these appeals.

3. Court's Decision and Directions:
The Court allowed the petition, setting aside the impugned orders passed by the 1st respondent under Section 148A(b) and Section 148 of the Income Tax Act. The matter was remitted back to the respondents for fresh consideration in compliance with legal principles. The petitioner was granted liberty to submit additional pleadings or documents for the respondents' review. The Appellate Authority was instructed to expedite the disposal of pending appeals, and the respondents were directed to proceed with the case only after the conclusion of the appellate proceedings.

This detailed analysis of the judgment highlights the key issues raised by the petitioner, the arguments presented by both parties, and the Court's decision along with the directions issued for further proceedings.