2024 (1) TMI 1190 - HC - Income Tax

Reopening of assessment u/s 147 - validity of order u/s 148A(d) without granting time to the petitioner to file reply to the notice under Section 148A(b) of the Act - HELD THAT - Petitioner was not provided an opportunity of hearing and the matter may be remanded back to the respondent-AO so as to enable the petitioner to file a reply to the notice u/s 148A(b) because keeping this matter pending before Hon ble Court would delay the assessment proceedings, if required to be re-opened after considering the reply of the petitioner and giving opportunity of hearing to the petitioner. Considering the above submissions, the impugned notices issued u/s 148A(b) and 148 respectively of the Act as well as the order passed u/s 148A(d) of the Act are hereby quashed and set aside remanding the matter back to the respondent-Assessing Officer so as to grant an opportunity of hearing to the petitioner to file a reply as provided u/s 148A(b).

Summary

Issues involved:
The issues involved in the judgment are related to the validity of the notices and orders issued under Sections 148A(b) and 148 of the Income Tax Act, 1961, and the failure to grant the petitioner an opportunity of hearing as required by law.

Validity of Notices and Orders under Sections 148A(b) and 148:
The petitioner filed its income tax return for Assessment Year 2018-19, offering a total income for tax. The assessment order was passed by the respondent under Section 143(3) u/s 144B of the Income Tax Act. Subsequently, the respondent issued a show-cause notice under Section 148A(b) for the same assessment year, stating that income chargeable to tax had escaped assessment. Despite the petitioner seeking additional time to respond, the respondent passed an order under Section 148A(d) without granting the opportunity of hearing. Furthermore, the respondent issued a notice under Section 148 seeking to reopen the assessment. The petitioner argued that the respondent should have allowed an opportunity of hearing as per Section 148A(b) before passing the order under Section 148A(d).

Remand and Opportunity of Hearing:
The petitioner's advocate contended that the respondent should have provided an opportunity of hearing as mandated by Section 148A(b) before passing the impugned order. In response, the Senior Standing Counsel for the respondent acknowledged the lack of opportunity given to the petitioner and suggested remanding the matter back to the Assessing Officer to enable the petitioner to file a reply and have a proper hearing. It was agreed that keeping the matter pending in court would delay the assessment proceedings.

Judgment and Disposal:
After considering the submissions, the High Court quashed and set aside the impugned notices and order issued under Sections 148A(b) and 148 of the Act. The matter was remanded back to the Assessing Officer to grant the petitioner an opportunity of hearing as required by Section 148A(b) of the Act. The respondent was directed to provide the petitioner with a proper hearing in compliance with the Act. The petition was disposed of, and no costs were awarded. The interim relief granted by the Court was vacated as per the judgment.