2024 (2) TMI 49 - HC - Income Tax

Validity of orders passed u/s 147 r.w.s.144B and notice u/s 221 (1) - violation of principles of natural justice - as argued mandatory requirement of Section 143(2) has not been complied with - Impugned Assessment Order has been passed in a hurry without giving adequate opportunity to the petitioner to respond to the Show Cause Notices containing the Draft Assessment Orders. HELD THAT - The impugned orders passed by the first respondent have preceded with the notices issued by the first and the second respondents and show cause notices cum Draft Assessment Orders - It is evident that the assessment orders have been passed in a hurry to avoid lapsing of the assessment proceeding due to limitation u/s 153 of the Income Tax Act, 1961. Although the respondents have given various reasons to justify the impugned order and submit that the petitioner should be relegated to work out the remedy before the Appellate Commissioner against the impugned assessment orders, it is of the view that this is a manifest violation of principles of natural justice and therefore, the impugned orders are liable to be quashed as not enough time was given to the petitioner to respond to the respective show cause notices cum Draft Assessment Orders. Thus impugned orders are liable to be quashed and the cases are to be sent back to the first respondent to pass a fresh order by giving opportunity to the petitioner to file a reply/representation to the respective show cause notices cum Draft Assessment Orders dated 26.03.2022. Also notice issued u/s 221(1) are also liable to be quashed. Decided in favour of assessee.

Summary

Issues involved:
Challenge to Assessment orders under Section 147 read with section 144B and notice under Section 221(1) of the Income Tax Act, 1961 for assessment years 2014-15, 2015-16, and 2008-2009 due to violation of principles of natural justice.

Judgment Details:

Assessment Orders for 2014-15 and 2015-16:
The petitioner challenged the Assessment Orders dated 30.03.2022, alleging non-compliance with Section 143(2) of the Income Tax Act, 1961. The petitioner had filed regular returns under Section 139 but was issued notices under Section 148 for re-opening assessments. The petitioner submitted the return manually on 29.04.2021 due to technical limitations. The Impugned Assessment Orders were passed hastily without giving adequate opportunity to respond to Show Cause Notices dated 26.03.2022.

Principles of Natural Justice Violation:
The Assessment Orders were rushed to avoid lapsing of the assessment proceeding, violating principles of natural justice. The impugned orders did not provide sufficient time for the petitioner to respond to the show cause notices. The court found this to be a manifest violation of natural justice, leading to the quashing of the orders.

Legal Defenses by Respondents:
The respondents argued that the petitioner failed to file returns electronically as required by Rule 12(3)(iii) of the Income Tax Rules, 1962. They contended that the manual return filed by the petitioner was unacceptable, justifying the assessment process followed. The assessment had to be completed by 31.03.2022 to avoid lapsing of the re-assessment proceeding.

Court's Decision and Directions:
The court set aside the impugned assessment orders and remitted the cases back to the first respondent for fresh orders within six months. The petitioner was directed to file a reply to the show cause notices within 45 days. The notice issued under Section 221(1) for 2014-15 and 2015-16 was also quashed. For the notice related to 2008-09, the respondent was directed to consider the petitioner's representations and pass an order within six months.

Conclusion:
The writ petitions for 2014-15 and 2015-16 were allowed, the impugned orders were quashed, and the cases were remitted back for fresh orders. The notice for 2008-09 was to be reconsidered. No costs were awarded, and connected petitions were closed.