2023 (3) TMI 866 - HC - Income Tax

Validity of assessment orders - violation of the principles of natural justice - non providing time seekeed to reply to SCN - documents/records sought for by the respondent in the Show Cause Notice are voluminous in nature, even without waiting for the documents to be submitted by the petitioner for which they have sought for two weeks time, the impugned assessment orders passed - HELD THAT - Admittedly, as seen from the impugned assessment orders, the reason for rejection of the petitioner's request in his reply seeking two weeks time to furnish the particulars/documents sought for by the respondent in their Show Cause Notice has not been considered by the respondent. Having not been informed and that too when the impugned assessment orders do not give reasons as to why the respondent has not granted time despite a specific request having been made by the petitioner in their reply this Court is of the considered view that principles of natural justice has been violated by the respondent. Since the documents have already been given by the petitioner to the respondent during the pendency of these writ petitions, no prejudice would be caused if the assessments are redone in respect of the assessment years - Thus the impugned assessment orders are hereby quashed and the matters are remanded back to the respondent for fresh consideration, on merits.

Summary

Issues:
Challenge of assessment orders based on violation of principles of natural justice.

Analysis:
The petitioner challenged the assessment orders dated 30.05.2022 for the assessment years 2019-20 and 2020-21, citing a violation of natural justice principles. The Show Cause Notice issued under Section 143(3) of the Income Tax Act required the petitioner to submit details and documents by 17.05.2022. The petitioner requested two weeks to provide the voluminous documents but the assessment orders were passed before the deadline without considering the request. The petitioner contended that the respondent did not provide reasons for not granting the extension requested in their reply to the Show Cause Notice.

Counter Affidavit:
The respondent argued that the assessment orders had to be passed by 31.05.2022 due to the statutory limitation under Section 153(B) of the Income Tax Act. They claimed that two weeks were granted to the petitioner before passing the assessment orders. The respondent contended that the writ petitions were not maintainable as the petitioner did not utilize the statutory appellate remedy before filing the petitions.

Dispute on Limitation:
The petitioner disputed the respondent's contention on the limitation period, asserting that the deadline for passing the assessment orders was 30.09.2022. The petitioner highlighted that the reason for rejecting the request for an extension was not considered by the respondent in the assessment orders.

Violation of Natural Justice:
The Court found that the respondent violated natural justice principles by not providing reasons for rejecting the petitioner's request for an extension. The petitioner later submitted the requested documents during the writ petitions, indicating that redoing the assessments for the years in question would not cause prejudice. The Court directed the respondent to redo the assessments within eight weeks, ensuring compliance with natural justice principles and granting a personal hearing to the petitioner's representative.

Conclusion:
The Court quashed the impugned assessment orders and remanded the matters back to the respondent for fresh consideration within a specified time frame. The petitioner was prohibited from submitting additional documents and instructed to cooperate with the proceedings without causing delays.