Court overturns income tax assessment for 2012-13 due to procedural violation

The court found a violation of reassessment procedure and principles of natural justice in an income tax case for Assessment Year 2012-13. The assessing officer failed to follow the prescribed procedure by not furnishing reasons within a reasonable time, hindering the petitioner's ability to file objections. The court emphasized adherence to due process and fairness, setting aside the assessment order and granting the petitioner the opportunity to challenge jurisdiction. The writ petition was allowed in favor of the petitioner, with no costs imposed.

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Issues: Violation of reassessment procedure and principles of natural justice.

Violation of Reassessment Procedure:
The judgment concerns an impugned order of assessment passed under Sections 147 and 143(3) of the Income Tax Act, 1961, for Assessment Year 2012-13. The petitioner had complied with the requirement of filing a return and sought reasons for the reassessment. However, the assessing officer issued a show cause notice and reasons were furnished on the same day as the assessment order, indicating a lack of adherence to the prescribed procedure. The court noted that the procedure for reassessment, as outlined by the Supreme Court in GKN Drive Shafts v. ITO, was not followed. The judgment highlighted the necessity for the assessing officer to furnish reasons within a reasonable time, allowing the noticee to file objections and requiring the officer to dispose of them by passing a speaking order before proceeding with the assessment.

Principles of Natural Justice:
The court observed a patent disregard for the principles of natural justice based on the sequence of dates and events leading to the assessment order. The judgment emphasized the importance of following due process and ensuring fairness in administrative actions. The court set aside the impugned order dated 30.12.2019, granting the petitioner the opportunity to file objections to the assumption of jurisdiction within four weeks and directing the authorities to pass an order accepting or rejecting the objections within three weeks after hearing the petitioner. The judgment concluded by allowing the writ petition in favor of the petitioner, with no costs imposed and closing the connected miscellaneous petition.

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