High Court sets aside assessing officer's order under Income Tax Act for 2014-15, emphasizing natural justice and disclosure requirements.

The High Court allowed the appeal, setting aside the assessing officer's order under Section 148A(d) of the Income Tax Act, 1961 for the assessment year 2014-15. The Court found a violation of natural justice due to the denial of a personal hearing and emphasized the importance of disclosing credible information to the assessee for a proper response. The Court directed the matter back to the assessing officer with specific instructions, highlighting procedural irregularities and the need for a fair opportunity for the assessee to present their defense effectively.

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Issues:
Challenge against assessing officer's order under Section 148A(d) of the Income Tax Act, 1961 for the assessment year 2014-15 based on violation of principles of natural justice and procedural irregularity.

Analysis:
The appellant challenged an order passed by the assessing officer under Section 148A(d) of the Income Tax Act, 1961 for the assessment year 2014-15, primarily on grounds of violation of principles of natural justice and procedural irregularity. The Single Bench opined that the appellant could raise contentions in reassessment proceedings. The appellant, aggrieved by this decision, appealed to the High Court. The Court heard arguments from both sides and examined the facts of the case.

The assessing officer issued a notice under Section 148(A)(d) based on information received through the "insight portal" regarding significant transactions in the assessee's bank account. The appellant denied having an account with the specified bank branch and requested a personal hearing and cross-examination of relevant persons. However, the assessing officer proceeded to pass the order without granting a personal hearing, leading to the challenge by the appellant.

Upon reviewing the order and the appellant's reply, the Court found that the denial of a personal hearing by the assessing officer was not justifiable. The Court emphasized that if the department possessed credible information, it should disclose it to the assessee to allow for a proper response, failing which it would violate principles of natural justice.

During submissions, the appellant raised the issue of limitation regarding the notice issued under Section 148A(b) of the Act. The Court acknowledged that this ground was not previously raised but stated that it could be addressed at any stage of the proceedings. The Court, satisfied with the violation of natural justice, set aside the assessing officer's order and directed the matter back to the assessing officer with specific instructions.

The Court distinguished a Supreme Court decision cited by the respondent, emphasizing the procedural irregularities and violation of natural justice in the present case. Consequently, the Court allowed the appeal, set aside the order, and directed the assessing officer to provide a fair opportunity for the assessee to present their defense effectively.

In conclusion, the Court set aside the notice issued under Section 148A(d), restored the matter to the assessing officer, and directed a proper hearing, provision of relevant information, and consideration of the limitation issue. The Court clarified that no decision on merits was made, leaving it open for the assessee to raise all points before the assessing officer for a decision in accordance with the law.

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