Court emphasizes fair opportunity under Income Tax Act, rules in favor of petitioner.

The court found that the petitioner was not provided with a reasonable opportunity as mandated by law under Section 142(2A) of the Income Tax Act, 1961. The court emphasized the importance of granting more than just an opportunity, considering the complexity of the case. Citing the SAHARA INDIA case, the court ruled in favor of the petitioner, setting aside the orders and directing the respondent to restore the notice for the petitioner to appear on a specified date without further notice. The court stressed adherence to principles of natural justice and audi alteram partem, disposing of the petition accordingly.

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Issues:
Challenging validity of order under Section 142(2A) of the Income Tax Act, 1961 due to lack of reasonable opportunity provided to the petitioner.

Analysis:
The petitioner challenged the validity of the order passed under Section 142(2A) of the Income Tax Act, 1961, arguing that the respondents did not provide a reasonable opportunity as required under the proviso to Section 142(2A). The petitioner was issued a notice on 20th March 2015 to appear on 23rd March 2015, allowing only two days for preparation. The petitioner contended that the issue was complex, making it practically impossible to respond effectively within such a short notice period. The petitioner emphasized that the purpose of the notice was to grant a reasonable opportunity, not just an opportunity, as mandated by the law.

The petitioner relied on the judgment of the Hon'ble Supreme Court in the case of SAHARA INDIA (FIRM) v. COMMISSIONER OF INCOME TAX AND ANOTHER, highlighting paragraphs 23 and 24 of the judgment. On the other hand, the respondent-revenue argued that the petitioner was given additional time upon request but further extensions were denied. The respondent defended the impugned order, stating that the actions were not erroneous.

Upon hearing the arguments, the court examined the proviso to Section 142(2A) of the Act, emphasizing the requirement of providing a "reasonable opportunity" to the assessee before directing an audit. The court noted that the term "reasonable opportunity" signifies more than just an opportunity and should consider the complexity of each case. In this instance, the notice issued to the petitioner allowed only two days for preparation, which the court deemed inadequate given the complexity of the matter. Referring to the SAHARA INDIA case, the court stressed the importance of observing the principle of audi alteram partem and providing a full opportunity for the party to be heard.

The court concluded that the petitioner was not granted a reasonable opportunity as required by law, violating the principles of natural justice and audi alteram partem. Consequently, the court set aside the relevant orders and directed the respondent to restore the notice, instructing the petitioner to appear without further notice on a specified date. The court clarified that if limitations arose, the petitioner should file an application, and the respondent should take appropriate action. The petition was disposed of accordingly.

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