High Court sets aside Income Tax order, emphasizing natural justice principles.

The High Court of Calcutta allowed the intra Court appeal, setting aside the order under Section 148A(d) of the Income Tax Act, 1961. The Court criticized the assessing officer's hasty actions, emphasizing the importance of providing adequate time for the appellant to respond and upholding principles of natural justice. A cost was imposed on the authority, and the matter was remanded for reconsideration of the appellant's reply. The Court quashed the order and notice issued under Section 148 of the Act, highlighting the need for a reasonable interpretation of statutory provisions to ensure fairness in tax proceedings.

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Issues:
Challenge to order under Section 148A(d) of the Income Tax Act, 1961 for not filing objection within stipulated time.

Analysis:
The High Court of Calcutta heard an intra Court appeal challenging the order dated 7th April, 2022 in WPO/1943/2022 where the appellant contested the order dated 23rd March, 2020 under Section 148A(d) of the Income Tax Act, 1961. The Court noted that the assessing officer acted hastily, as the appellant's response was uploaded on 21st March, 2022, after a notice on 18th March, 2022, which was a public holiday. The Court emphasized that a reasonable interpretation should be given to statutory provisions to ensure a meaningful opportunity for the appellant. The Court rejected the argument that the appellant should have requested an extension, as filing the reply online on 21st March, 2022 was deemed as seeking an extension. The Court distinguished the case from a Supreme Court decision cited by the revenue, emphasizing that they were dealing with an aggrieved assessee, not a public interest litigation.

The Court referred to a Delhi High Court decision with similar facts, highlighting the importance of providing adequate time for the assessee to respond. The Court emphasized that the assessing officer's actions were in haste and violated principles of natural justice. The Court noted that the assessing officer's approach was narrow and hasty, reducing the amended provision to a nullity. The Court questioned the rush in passing the order on 23rd March, 2022, especially when the reply was uploaded on 21st March, 2022. To deter similar actions in the future, the Court imposed a cost on the authority and remanded the matter to consider the appellant's reply. The Court set aside the order dated 23rd March, 2022, and the notice issued under Section 148 of the Act dated 11th March, 2022.

After dictating the order, the Court considered a prayer from the department's standing counsel to not impose costs, agreeing to delete that portion of the direction. The Court allowed the appeal, quashing the order and the notice issued under Section 148 of the Act.

This detailed analysis showcases the Court's thorough examination of the case, emphasizing the importance of providing a meaningful opportunity to the appellant and ensuring procedural fairness in tax matters.

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