Court sets aside order under Income Tax Act, directs fresh assessment, emphasizes natural justice

The court set aside the order under Section 148A(d) of the Income Tax Act and the notice issued under Section 148 for Assessment Year 2018-19, directing the Assessing Officer to issue a fresh reasoned order after considering the petitioner's reply within eight weeks. The court highlighted the significance of adhering to principles of natural justice and considering the petitioner's submissions in such proceedings, without expressing any opinion on the underlying merits of the case.

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Issues:
Challenging order under Section 148A(d) of the Income Tax Act, 1961 and notice under Section 148 for Assessment Year 2018-19.

Analysis:
The petitioner challenged the order dated 4th April, 2022, passed by Respondent No.1 under Section 148A(d) of the Income Tax Act, 1961, and the notice issued under Section 148 for the Assessment Year 2018-19. The petitioner argued that the reassessment proceedings were void ab initio as they were issued in the name of a non-existent entity, which had amalgamated with the petitioner company. Citing a Supreme Court decision, it was contended that issuing a notice to a non-existent company is a substantive illegality. Additionally, the petitioner claimed that there was no information regarding the escapement of income, which is necessary for taking action under Section 148 of the Act. The petitioner also alleged a violation of principles of natural justice as the reply filed by them was not considered before passing the impugned order.

The court noted that the respondent admitted that the petitioner's reply was not considered while passing the impugned order. Consequently, the court set aside the order under Section 148A(d) of the Act and the notice issued under Section 148 for the Assessment Year 2018-19. The Assessing Officer was directed to pass a fresh reasoned order after considering the petitioner's reply within eight weeks. The court clarified that it did not comment on the merits of the controversy and left the rights and contentions of all parties open.

In conclusion, the court disposed of the writ petition and applications with the direction for a fresh order to be passed by the Assessing Officer. The judgment emphasized the importance of considering the petitioner's reply and upholding principles of natural justice in such proceedings.

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