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2024 (1) TMI 65 - HC - Income TaxValidity of Faceless Assessment order - Principles of natural justice denied - denial of extension of seven days time sought for and the issuance of the impugned assessment order without passing any orders on the request of the petitioner, are in violation of the constitutional rights guaranteed under Article 14 of the Constitution of India - HELD THAT - The liability of the tax is a civil liability. Principles of natural justice ought to be adhered to, while finalizing the assessment proceedings in respect of tax. It is not in dispute that the petitioner is issued with Exhibit P15 show cause notice dated 10.05.2023. In fact, it is admitted that the petitioner has not submitted any reply to the same. The petitioner sought one week s time till 22.05.2023 for filing reply and no decision was taken on the petitioner s request for extension of time and the window was closed and finally assessment order was passed in the absence of any reply from the petitioner. Thus AO has proceeded in a hurried manner to some extent, which is in violation of the principles of natural justice. Therefore, the impugned Exhibit P21 order is set aside and the respondents are directed to open the window for uploading Exhibit P17 objection to the show cause notice. No further time will be granted to the petitioner for the purpose. The assessment proceedings should be finalised and a fresh assessment order be passed in accordance with law. The petitioner should be intimated a fresh date for filing reply to the show cause notice. WP allowed.
Issues involved:
The issues involved in the judgment are the denial of extension of time for filing reply to a show cause notice by the Income Tax Authorities, violation of constitutional rights guaranteed under Article 14 of the Constitution of India, and the failure to adhere to principles of natural justice in finalizing assessment proceedings. Details of Judgment: Issue 1: Denial of Extension of Time The petitioner, an assessee under the Income Tax Act, 1961, sought an extension of time to submit a reply to a show cause notice issued by the third respondent. Despite the petitioner's request for an extension until 22.05.2023, no decision was communicated, and the window for submission was closed, leading to the issuance of the assessment order. The court held that the assessing officer proceeded in a hurried manner, violating principles of natural justice. The impugned order was set aside, directing the respondents to open the window for uploading objections without granting further time. Issue 2: Violation of Constitutional Rights The petitioner contended that the denial of extension and the issuance of the assessment order without addressing the request for more time violated the constitutional rights guaranteed under Article 14 of the Constitution of India. The court acknowledged the petitioner's readiness to submit the reply if given the opportunity. The learned counsel for the Revenue acknowledged the failure to address the petitioner's request for an extension of time. Issue 3: Failure to Adhere to Principles of Natural Justice The court emphasized that the liability of tax is a civil liability, requiring adherence to principles of natural justice in assessment proceedings. It noted that the petitioner was issued a show cause notice but had not submitted a reply. The failure to address the request for an extension of time and the subsequent passing of the assessment order without the petitioner's response was deemed a violation of natural justice. The court directed the finalization of assessment proceedings with a fresh order passed in accordance with the law. In conclusion, the court allowed the writ petition, setting aside the impugned order, and directed the authorities to comply with the order communicated for further proceedings.
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