High Court quashes assessment order under Income Tax Act, stresses natural justice

The High Court set aside the assessment order passed under relevant sections of the Income Tax Act, emphasizing the importance of natural justice principles. The Court found the authorities' refusal to grant the petitioner additional time for document submission unjustifiable and directed a fresh assessment process within two weeks, ensuring compliance with due procedures. The Writ Petition was disposed of without costs, and connected Miscellaneous Petitions were closed.

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Issues:
Challenge against assessment order passed under Section 147 read with Section 144 read with Section 144-B of the Income Tax Act based on best judgment assessment.

Analysis:
The petitioner challenged the assessment order passed under Section 147 read with Section 144 read with Section 144-B of the Income Tax Act, contending that the authorities did not consider his replies properly and passed the impugned order hastily, violating the principles of natural justice. The petitioner's return for the assessment year 2016-2017 was initially accepted after limited scrutiny. However, subsequent notices were issued, and the assessment was done in a faceless manner. The petitioner faced technical difficulties in uploading documents on the Web Portal, leading to delays in responses. The respondents argued that the petitioner's property transactions raised suspicions, leading to the reopening of the case under Section 147 of the Act. The case was transferred to the National Faceless Assessment Centre for scrutiny. Despite the petitioner's attempts to provide explanations and documents, the authorities proceeded with the assessment, citing time limitations. The Court found the authorities' refusal to grant additional time for submission unjustifiable and set aside the impugned order, directing the petitioner to submit his reply with supporting documents within two weeks for a fresh assessment following due procedures.

Conclusion:
The High Court, under the judgment delivered by Justice M.Nirmal Kumar, set aside the impugned assessment order passed under Section 147 read with Section 144 read with Section 144-B of the Income Tax Act. The Court found the authorities' refusal to grant the petitioner additional time for submitting documents improper, emphasizing the importance of adhering to principles of natural justice. The petitioner was directed to submit his reply along with supporting documents within two weeks for a fresh assessment in accordance with the law. The Writ Petition was disposed of without costs, and connected Miscellaneous Petitions were closed.

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