2022 (7) TMI 1318 - HC - Income Tax

Court allows writ appeal under Section 148A(d) of Income Tax Act, remands matter for reassessment. Appellant directed to submit objections.

The court allowed the writ appeal and petition, setting aside the order under Section 148A(d) of the Income Tax Act 1961 and remanding the matter to the ... Principles of natural justice - notice under Section 148A(b) of the Income Tax Act - right to be furnished with information forming basis for reopening - reopening assessment - remand for fresh considerationPrinciples of natural justice - notice under Section 148A(b) of the Income Tax Act - right to be furnished with information forming basis for reopening - reopening assessment - Whether the assessment order dated 07.04.2022 under Clause (d) of Section 148A was vitiated by violation of principles of natural justice for failure to furnish the information forming the basis for reopening to the assessee. - HELD THAT: - The Assessing Officer issued a notice under Section 148A(b) dated 16.03.2022 which purported to enclose details in Annexure A, but no annexure was furnished. The assessee pointed out the absence and responded by e-proceedings. A second notice dated 21.03.2022 was issued; the annexure to that notice contained only a tabular 'case related information detail' and did not include the substantive information later relied upon. The order under Clause (d) of Section 148A passed on 07.04.2022 set out detailed information running to several paragraphs which had not been furnished to the assessee at the stage of notice. The court held that withholding the full information on which the reopening was sought amounted to denial of the opportunity to know and reply to the case against the assessee, thereby breaching the principles of natural justice and invalidating the impugned order. The court therefore set aside the order and remanded the matter to the Assessing Officer to the position when the notice dated 21.03.2022 was issued, directing that the assessee be furnished the information contained in the 07.04.2022 order as the basis for reopening and given an opportunity to submit objections within a fixed time, after which the Assessing Officer shall proceed in accordance with law.The order dated 07.04.2022 under Clause (d) of Section 148A is set aside for breach of natural justice and the matter is remanded to the Assessing Officer to the position as on 21.03.2022 with directions to furnish the information relied upon and afford the assessee an opportunity to file objections before proceeding.Final Conclusion: The appeal and connected writ petition are allowed; the assessment order dated 07.04.2022 is quashed for failure to furnish the information forming the basis of reopening, the matter is remanded to the Assessing Officer for fresh consideration after affording the assessee the prescribed opportunity to object, and the 07.04.2022 notice shall not be enforced in the interim. Issues:Challenging an assessment order under the Income Tax Act 1961 for the assessment year 2018-19 on the grounds of violation of principles of natural justice.Analysis:The appellant challenged the assessment order passed under the Income Tax Act 1961 for the assessment year 2018-19, alleging a violation of natural justice principles. The Assessing Officer issued a notice under Section 148A(b) of the Act, suggesting that income chargeable to tax had escaped assessment. The appellant contended that they were not provided with the necessary information as stated in the notice. Despite the appellant's response, a second notice was issued, claiming the first notice did not allow the minimum required time for response. The subsequent notice also lacked the essential information and only contained case-related details. The court found a clear violation of natural justice principles as the appellant was not furnished with complete information crucial for the assessment reopening process.The court allowed the writ appeal and petition, setting aside the order under Section 148A(d) of the Act and remanding the matter to the Assessing Officer to the position when the second notice was issued. The appellant was directed to consider the information in the order dated 07.04.2022 as the basis for reopening and submit objections within 10 days. Upon receiving the opposition affidavit, the Assessing Officer was instructed to proceed with the assessment in compliance with the law. The notice dated 07.04.2022 was deemed unenforceable, and the appellant was urged to cooperate with the assessment proceedings within the specified timeframe.In conclusion, the appeal and connected application were disposed of in accordance with the court's directions, emphasizing the importance of upholding principles of natural justice in assessment proceedings under the Income Tax Act 1961.