2024 (1) TMI 754 - HC - Income Tax

Validity of reassessment order u/s 148A - Allegation of bogus purchase made by assessee - order as challenged is by contending that it has been passed by violation of principles of natural justice inasmuch as the appellant has not been granted an opportunity of personal hearing - assessee stated that the document provided by the department are neither relevant nor does it indicate any bogus purchases made by them and in the document there is no whisper about the assessee that any income has escaped assessment - HELD THAT - The assessee sought for the relevant documents and liberty to file an additional objection. The reply given by the assessee on 12.4.23 has not been taken into account in the manner it should have been done, though the assessing officer refers to the said reply of the order dated 13.4.23. As pointed out earlier, the notice dated 27.3.23 is not a notice of personal hearing. Therefore, the authority while passing the order impugned in the writ petition has violated the principles of natural justice and inasmuch as the statute also provided that opportunity be granted to the assessee before an assessment is reopened. Therefore, we are satisfied that there has been violation of principles of natural justice and, therefore, the assessee has to be provided an opportunity of personal hearing and also be given liberty to furnish additional documents to support their stand. For the above reasons, the order impugned in the writ petition dated 13.4.23 passed u/s 148A(d) is directed to be treated as a notice u/s 148A(b) and assessee be directed to file further objection along with supportive documents and on receipt of the further objection and supportive documents, the assessing officer is directed to fix a date for personal hearing to hear the authorized representative of the assessee and pass fresh orders on merits and in accordance with law. Assessee is directed to file their reply within a period of 30 (thirty) days from the date of receipt of the server copy of this order. During the course of personal hearing, the petitioner may make a request for supply of any additional document that may be relied upon by the department.

Summary

Issues involved:
The judgment addresses the violation of principles of natural justice in an order passed by the assessing officer under Section 148A(d) of the Income Tax Act, 1961 for the assessment year 2019-20.

Details of the Judgment:

Issue 1: Violation of Principles of Natural Justice
The appellant challenged the order passed by the assessing officer on the grounds of not being granted an opportunity of personal hearing. The assessing officer had provided an opportunity of being heard as per Section 148A(b) of the Act by issuing a notice dated 27.3.23 calling for a reply along with supportive documents. However, the notice did not include a provision for a personal hearing. The appellant responded to the notice by denying the allegations and requesting the documents relied upon by the department. Subsequently, another notice was issued enclosing certain information, to which the appellant responded by providing relevant documents and denying any bogus purchases. The High Court found that the assessing officer had violated the principles of natural justice by not granting a personal hearing, as required by the statute before reopening an assessment. Therefore, the order was directed to be treated as a notice under Section 148A(b) of the Act, and the appellant was given the opportunity to file further objections and supportive documents. The assessing officer was instructed to fix a date for a personal hearing to hear the authorized representative of the appellant and pass fresh orders in accordance with the law.

Issue 2: Opportunity for Personal Hearing
The High Court emphasized the importance of providing the appellant with an opportunity for a personal hearing as part of the principles of natural justice. It was noted that the appellant's reply submitted on 12.4.23 had not been adequately considered by the assessing officer, despite being referred to in the order dated 13.4.23. The Court highlighted that the notice dated 27.3.23 did not fulfill the requirement of a personal hearing, leading to a violation of natural justice. Therefore, the Court directed the assessing officer to allow the appellant to present their case in a personal hearing and submit additional documents to support their position. The appellant was given 30 days to file their reply from the date of receipt of the court's order.

Conclusion:
The High Court allowed the appeal, emphasizing the need for adherence to principles of natural justice in proceedings under the Income Tax Act. The judgment underscored the importance of providing an opportunity for a personal hearing and submitting relevant documents to support one's case in tax assessments.