2024 (1) TMI 698 - HC - Income Tax

Validity of Reopening of assessment - denial of natural justice - petitioners have given their response to the notice issued under Section 148A(b) and in the response petitioners have not given complete reply, but have asked for certain documents which have not been furnished - HELD THAT - The impugned orders are unsustainable as the petitioners have not been given adequate opportunity to respond to the notices issued u/s 148A(b) of the Income Tax Act, 1961. Considering the same, the impugned orders are quashed and the cases are remitted back to the respondent for passing a fresh order on merits. The respondent shall furnish documents and details called for by these petitioners within a period of four (4) weeks from the date of receipt of a copy of this order. The petitioner shall respond to notices issued under Section 148A(b) of the Income Tax Act, 1961, by way of reply / additional representation within a period of four (4) weeks thereafter.

Summary

Issues involved:
The judgment involves challenges to proceedings under clause (d) of Section 148A of the Income Tax Act, 1961, based on a survey conducted under Section 133A of the Act. The issues include jurisdiction of re-opening assessment, adequacy of opportunity given to the petitioners, and the validity of the impugned orders.

Relevant details for each issue:

1. Jurisdiction of Re-opening Assessment:
- A survey was conducted under Section 133A of the Income Tax Act, 1961.
- Statements from partners of a business were recorded during the survey.
- Statements were retracted later, and notices under Section 148A(b) were issued.
- Petitioners requested documents based on the recorded statements.
- Petitioners claimed no undisclosed transactions to the Department.
- Petitioners argued that re-opening the assessment was without jurisdiction.
- Petitioners relied on previous court decisions to support their case.
- Respondent claimed authority to re-open assessment based on recorded statements.

2. Adequacy of Opportunity Given:
- Petitioners' responses to notices under Section 148A(b) were incomplete.
- Petitioners requested documents not furnished by the respondent.
- Impugned orders passed without providing adequate opportunity to petitioners.
- Court found the impugned orders unsustainable due to lack of opportunity.

3. Validity of Impugned Orders:
- Impugned orders quashed for lack of opportunity to respond.
- Cases remitted back to the respondent for fresh orders on merits.
- Respondent directed to furnish requested documents within four weeks.
- Petitioners to respond to notices within four weeks thereafter.
- Respondent to pass appropriate orders within four weeks after receiving responses.
- Writ Petitions disposed of with above observations, and connected petitions closed without costs.

This judgment highlights the importance of providing adequate opportunity to parties in tax proceedings and emphasizes the need for proper jurisdiction in re-opening assessments based on recorded statements.