Court overturns Income Tax authorities' order, emphasizing natural justice principles. Petitioner granted fair response opportunity.

The Court set aside the order and notice issued by the Income Tax authorities, finding that the petitioner, a partnership firm, was deprived of the opportunity to respond to the notice under section 148A(b) of the Income Tax Act, 1961. The Court emphasized the importance of natural justice in quasi-judicial processes and directed the proceedings to be remanded to the competent authority. The petitioner was granted two weeks to respond to the notice, with instructions for the authority to conclude the proceedings within six weeks. The petition was allowed, ensuring the petitioner's right to a fair opportunity to defend their case.

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Issues Involved:
The issues involved in this case are related to the validity of the order passed by the Assessing Officer under section 148A(d) of the Income Tax Act, 1961 and the notice issued under section 148 of the Act for Assessment Year 2018-2019. The main contention is whether the petitioner was deprived of the opportunity to respond to the show cause notice issued under section 148A(b) of the Act, thus violating the principles of natural justice.

Summary of the Judgment:
The petitioner, a partnership firm, filed its return of income for the Assessment Year 2018-2019, declaring a total income. The respondent Income Tax authorities issued a notice under section 148A(b) of the Act, alleging that bogus invoices were issued by another entity. The petitioner requested an adjournment through the portal, but the Assessing Officer passed an order under section 148A(d) stating that income had escaped assessment. The petitioner claimed they were not given a fair opportunity to respond to the notice, as the adjournment request was not visible on the portal.

The respondent authorities argued that the petitioner failed to reply within the stipulated time and that the notice under section 148 was issued to prevent time-barred proceedings. They contended that the petitioner's claim of a violation of natural justice was misconceived. The respondent highlighted that every notice is issued after online approval at higher levels in the hierarchy.

The Court found that the petitioner's adjournment request was successfully uploaded on the portal, but confirmation was not visible due to a technical issue. It was established that the petitioner was deprived of the opportunity to defend their case, constituting a breach of natural justice. The Court emphasized that observance of natural justice is crucial in quasi-judicial processes and that the department should have extended a reasonable opportunity to the petitioner to respond.

Consequently, the Court set aside the impugned order and notice on the grounds of depriving the petitioner of the opportunity following the initial notice. The Court directed the proceedings to be remanded to the competent authority, granting the petitioner two weeks to respond to the notice. The competent authority was instructed to conclude the proceedings within six weeks after receiving the petitioner's reply.

In conclusion, the petition was allowed, and the Court provided specific directions to ensure the petitioner's right to a fair opportunity to respond and defend their case in accordance with the law.

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