Court remands case for lack of hearing opportunity, sets aside order under ITA, emphasizes procedural fairness

The court remanded the case due to the lack of clarity on whether the petitioner was granted the opportunity of being heard as required by law before the order was passed. The court set aside the order and accompanying notice under Section 148 of the Income Tax Act, directing a fresh consideration by respondent No.3 after affording the petitioner a proper opportunity of hearing. The petitioner was instructed to appear on a specified date without further notice. The writ petition was disposed of, emphasizing procedural fairness and adherence to statutory requirements in tax assessments.

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Issues:
1. Opportunity of hearing under Section 148A(b) of the Income Tax Act not provided before passing the impugned order.
2. Lack of clarity on whether the opportunity of being heard was granted to the petitioner as mandated by law.
3. Remand on the grounds of petitioner not being given an opportunity of being heard.

Analysis:
The petitioner, a company providing cars on a self-drive basis, challenged a notice issued by respondent No.3 under Section 148A(a) of the Income Tax Act for re-assessment. Subsequent notices were issued under different clauses of Section 148A, leading to an order dated 07.04.2022, indicating that the petitioner's case warranted a notice under Section 148 for the assessment year 2018-2019. The petitioner contended that it was not afforded an opportunity of hearing as required by Section 148A(b) before the order was passed.

The impugned order stated that an opportunity of being heard was provided with prior approval by the competent authority. However, the petitioner's advocate highlighted the lack of clarity regarding whether this opportunity was actually granted, emphasizing the mandatory nature of such a hearing under Section 148A(b) before passing the order under Section 148A(d). Due to this ambiguity, the court deemed it necessary to remand the matter solely on the basis of the petitioner's claim of not being given a fair hearing.

Consequently, the court set aside the order dated 07.04.2022 and the accompanying notice under Section 148 of the Income Tax Act. The case was remanded to respondent No.3 for a fresh consideration after affording the petitioner a proper opportunity of hearing in accordance with the law. The petitioner was directed to appear before respondent No.3 on a specified date without further notice. As a result, the writ petition was disposed of accordingly, emphasizing the importance of procedural fairness and adherence to statutory requirements in tax assessments.

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