Court sets aside assessment order & penalties for violating natural justice in Income Tax Act proceedings. Remanded for fresh assessment.

The Court set aside the assessment order and penalty proceedings due to the violation of the principle of natural justice in assessment proceedings under the Income Tax Act, 1961. The matter was remanded for a fresh assessment order, with directions to ensure proper notice service to the petitioner's chartered accountant. The Court emphasized expeditious completion of the assessment without unnecessary adjournments and disposed of the writ petition accordingly (WPA No.12201 of 2021).

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Issues Involved:
Violation of principle of natural justice in assessment proceedings due to non-receipt of notices under Income Tax Act, 1961.

Analysis:
The petitioner filed a writ petition challenging the assessment order dated 15th April, 2021 for the assessment year 2017-18, alleging a violation of the principle of natural justice. The petitioner contended that they were not served with notices under Section 143(2) of the Income Tax Act, 1961 dated 7th January, 2020, notice under Section 142(1) dated 9th February, 2021, or any show cause notice dated 24th February, 2021. The respondent authority claimed that these notices were issued to a different email address due to a technical fault in the department's portal. However, it was established that the petitioner did not receive these notices at their official email address, resulting in their inability to participate in the assessment proceedings, thus violating the principle of natural justice.

The learned advocate for the respondent authority admitted the failure of notice delivery but attributed it to a technical issue. The Court, after considering the submissions and facts, concluded that justice would be served by setting aside the impugned assessment order and subsequent penalty proceedings. The matter was remanded back to the assessing officer to conduct a fresh assessment order in compliance with the law. The Court directed that all necessary notices should be served to the petitioner's chartered accountant at their official registered email address to ensure proper participation in the proceedings. Emphasizing on expeditious completion of the assessment without unnecessary adjournments, the Court disposed of the writ petition (WPA No.12201 of 2021) with these directions and observations.

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