Reasonable hearing before reassessment sanction: rushed notice and next-day hearing violated natural justice, invalidating subsequent proceedings.
Sanction for reassessment under section 21(2) required a reasonable opportunity of hearing before permission was granted. A show-cause notice served late in the evening with the hearing fixed for the next day gave the assessee no effective chance to reply and was treated as contrary to fairness and natural justice. The sanction order and the consequential reassessment notice were therefore quashed, and the matter was remitted for fresh decision after affording a proper hearing and recording reasons.
Issues: Whether the sanction granted for reassessment under section 21(2) was liable to be quashed for want of a reasonable opportunity of hearing and whether the consequential reassessment notice could survive.
Analysis: The notice to show cause against grant of permission for reassessment was served late in the evening and the date of hearing was fixed for the very next day. The petitioner was not given reasonable time to file an effective reply. Such undue haste in exercising jurisdiction under section 21(2) was held to be contrary to fairness and the principles of natural justice. The Court also followed the view that before sanctioning reassessment, the assessee must be afforded an opportunity of hearing and reasons must be recorded. In these circumstances, the permission order and the notice issued in pursuance of it could not be sustained.
Conclusion: The sanction order and the consequential reassessment notice were quashed, and the matter was remitted for a fresh decision after affording opportunity of hearing to the petitioner.
Ratio Decidendi: Before granting sanction for reassessment under section 21(2), the assessee must be given a reasonable opportunity of hearing, and failure to do so renders the sanction and consequential proceedings invalid.
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AI Drafter ✕
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