Assessment order set aside due to lack of hearing; fresh assessment ordered with petitioner's right to be heard.

The Court found that the assessment order passed without a hearing violated principles of natural justice. The Court set aside the assessment order and remanded the matter for a fresh assessment, directing the respondent to provide the petitioner with a hearing opportunity. The petitioner was allowed to raise all issues in the fresh assessment proceedings. The writ petition was allowed, the assessment order was set aside, and no costs were awarded.

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Issues:
Violation of principles of natural justice in passing assessment orders without a hearing.

Analysis:
The petitioner, a private limited company, filed a writ petition seeking to quash the assessment order passed by the respondent under section 143 (3) read with section 147 for the Assessment years 2003-04 and 2004-2005. The petitioner contended that the respondent had issued a notice under Section 148 seeking to reassess the income, alleging that certain income chargeable to tax had escaped assessment. The petitioner had sought reasons for reopening the assessments and had also requested personal inspection of relevant records. The respondent had completed assessments for previous years under Section 143(1) of the Act, assessing income as "Income from Business and profession." However, the respondent issued notices under Section 148 for the assessment years 2003-2004 and 2004-2005, completing the assessment without a personal hearing, despite pending legal challenges.

The petitioner argued that the respondent violated principles of natural justice and statutory provisions by not providing a specific hearing and enquiry before making the assessment. The respondent, on the other hand, stated that in the absence of a stay order, the assessment was completed within the time limit allowed under the Act. The respondent contended that the petitioner had withdrawn previous writ petitions challenging the assessment notices. The main contention revolved around the lack of opportunity for a hearing before passing the assessment orders, which the petitioner argued violated the principles of natural justice.

The Court noted that there was an oral direction not to proceed with the assessment enquiry for a specified period, and after that period, no notice of hearing was given to the petitioner. Citing relevant Supreme Court decisions, the Court held that the impugned assessment order suffered from legal infirmity due to the lack of opportunity for a hearing. The Court set aside the assessment order and remanded the matter to the respondent for a fresh assessment, directing the respondent to afford the petitioner an opportunity for a hearing. The petitioner was allowed to raise all issues before the assessing authority in the fresh assessment proceedings.

In conclusion, the writ petition was allowed, and the assessment order was set aside with directions for a fresh assessment with a hearing opportunity provided to the petitioner. No costs were awarded, and the connected miscellaneous petition was closed.

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