2023 (12) TMI 350 - HC - Income Tax

Validity of Reopening of assessment - as argued no oral hearing was granted to the petitioner before passing the impugned order u/s 148A(d) - HELD THAT - The affidavit filed by the respondents/revenue clearly states that no oral hearing was granted to the petitioner before passing the impugned order dated 30.03.2023 u/s 148A(d) - Having regard to the averments made in the aforementioned affidavit filed by the respondents/revenue, according to us, the best way forward would be to set aside the impugned order dated 30.03.2023 passed u/s 148A(d) and the consequent notice of even date i.e., 30.03.2023 issued u/s 148 of the Act, albeit with liberty to the AO to pass a fresh order after hearing the petitioner/assessee. Accordingly, the impugned order and the consequent notice of even date issued u/s 148 of the Act are set aside. Liberty is, however, given to the AO to pass a fresh order.

Summary

Issues involved:
The judgment concerns Assessment Year (AY) 2019-2020. The main issues raised were the lack of inquiry before directing reassessment proceedings and the absence of an oral hearing granted by the Assessing Officer (AO).

Issue 1: Lack of inquiry before reassessment proceedings:
The petitioner was alleged to have acquired accommodation entries and engaged in bogus transactions with New Goodwill Traders, resulting in an alleged tax evasion of Rs. 65,95,123. The petitioner's counsel provided relevant documents, including purchase bills, E-way Bill, and bank statements, to demonstrate compliance. The petitioner contended that the AO did not follow CBDT guidelines before initiating reassessment proceedings.

Issue 2: Absence of oral hearing:
The petitioner's counsel argued that despite requesting an oral hearing, it was not granted by the AO. It was highlighted that according to CBDT guidelines, the AO is required to provide a personal hearing to the notice before proceeding with reassessment.

Judgment Details:
The High Court set aside the impugned order dated 30.03.2023 and the consequent notice issued under Section 148 of the Income Tax Act, 1961. The court granted liberty to the AO to pass a fresh order after providing an oral hearing to the petitioner or their authorized representative. The new order must be a speaking order and shared with the petitioner. The writ petition was disposed of accordingly, and the interim order dated 03.05.2023 was vacated. Parties were instructed to act based on the digitally signed copy of the order.