2024 (2) TMI 398 - HC - Income Tax

Validity of reassessment proceedings - order passed u/s 148A(d) and the final assessment order u/s 147 challenged as non-speaking order - HELD THAT - While affirming the proposal in the show cause notice, the authorities are expected to record reasons, at least brief reasons, and if not brief reasons, as to why the proposal in the show cause notice is to be confirmed despite the assessee submitting the reply. The reading of the order gives an impression that on account of default of the assessee in not submitting the reply to the show cause notice, it was a fit case to issue notice under Section 148 of the Act. This is our considered opinion would not be the appropriate procedure. Since even in an ex parte proceedings, the authority has to record reasons for coming to a conclusion as to why the case has been taken out for re-opening of the assessment. Therefore, we are of the view that the proceedings has to be re-done with the matter by giving a fresh opportunity to the appellant assessee to submit a reply to the show cause notice u/s 148A(b) of the Act, the orders which are impugned in the writ petition and set aside. The matter is restored to the file of the assessing officer to the stage of the show cause notice u/s 148A(b).

Summary

Issues involved:
The appeal challenges an order under Section 148A(d) of the Income Tax Act, 1961 and a final assessment order under Section 147 for the assessment year 2018-2019. The primary contention is that the order dated 18.04.2022, which initiated the proceedings, was a non-speaking order lacking adequate reasons for re-opening the assessment.

Judgment Details:

Issue 1: Validity of the order under Section 148A(d) and Section 147:
The Court observed that the order dated 18.04.2022, issued under Section 148A(b) of the Act, was deficient as it did not provide sufficient reasons for re-opening the assessment. Even in ex parte proceedings, authorities are required to record reasons for taking such action. The Court held that the absence of a proper explanation for re-opening the assessment rendered the procedure inappropriate.

Issue 2: Remedial Action:
In light of the above observations, the Court directed that the proceedings be re-done. The impugned orders were set aside, and the matter was remanded to the assessing officer at the stage of the show cause notice under Section 148A(b) of the Act. The appellant was granted a fresh opportunity to respond to the notice within 20 days. Subsequently, a personal hearing was to be provided, either in person or through video conferencing, and fresh orders were to be passed based on merits and in accordance with the law. Notably, the appellant was barred from raising any issues regarding the limitation aspect in the future proceedings.

Conclusion:
Consequently, the appeal was disposed of with the direction for a re-assessment process, ensuring the appellant's right to respond adequately to the show cause notice and to be heard before a fresh decision is made by the assessing officer.