Court sets aside improper notice under Income Tax Act, orders compliance with natural justice

The court allowed the writ petition, setting aside the impugned order rejecting objections to a notice under Section 148-A(b) of the Income Tax Act. The court found that the notice was improperly served, the petitioner's reply was disregarded, and principles of natural justice were violated. The court deemed the order arbitrary and unsustainable, directing the Tax Authority to provide necessary information and allow the petitioner to submit a detailed reply within a specified timeframe, ensuring compliance with the law and fair play.

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Issues:
1. Rejection of objections to notice under Section 148-A(b) of the Income Tax Act.
2. Compliance with the provisions of Section 148-A(b) regarding the timeline for filing a reply to the notice.
3. Allegations of improper service of notice and subsequent disregard of the petitioner's reply.
4. Violation of principles of natural justice and fair play in passing the impugned order.

Analysis:
1. The petitioner challenged the order rejecting objections to a notice issued under Section 148-A(b) of the Income Tax Act. The petitioner contended that the notice was served improperly, and the subsequent order disregarded their reply, leading to a violation of fair play and natural justice principles.

2. The petitioner's counsel argued that the notice was issued concerning a transaction in a bank account that the petitioner did not maintain. The petitioner submitted a detailed reply within the prescribed timeline, disputing any connection with the mentioned account. However, the assessing officer ignored this reply and proceeded to pass the impugned order under Section 148-A(b) without considering the petitioner's submissions.

3. The respondents claimed that the notice was served both electronically and through post. However, the petitioner's evidence showed discrepancies in the service of the notice, indicating that it was not served in a timely manner. The court found that the minimum and maximum timeline requirements for filing a reply under Section 148-A(b) were not adhered to by the tax authorities.

4. The court held that the impugned order was arbitrary, perverse, and violated principles of natural justice. It was deemed unsustainable in law due to the failure to consider the petitioner's response and provide necessary details for clarification. Consequently, the court quashed the impugned order and directed the Income Tax Officer to provide the petitioner with the required information and an opportunity to submit a detailed reply within a specified timeframe.

In conclusion, the court allowed the writ petition, setting aside the impugned order and instructing the Tax Authority to proceed afresh in compliance with the law and principles of natural justice, ensuring a fair opportunity for the petitioner to present their case.

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