Court sets aside assessment order and demand notice, emphasizing fair hearing and natural justice

The High Court set aside the assessment order and demand notice dated 15.03.2023, remanding the matter for proper consideration of the petitioner's submissions. The court emphasized granting the petitioner a fair opportunity to be heard, acknowledging the denial of a fair hearing as an abrogation of natural justice. The writ petition and application were disposed of accordingly, with the file to be consigned to records.

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Issues involved:
The writ petitioner assailed an order under Section 147 read with Section 144B of the Income Tax Act for the Assessment Year 2018-19, coupled with a demand notice under Section 156 of the Act, both dated 15.03.2023.

Details of the Judgment:

Issue 1: Validity of the assessment order and demand notice
The petitioner challenged the order initiating reassessment proceedings under Section 148A(d) of the Income Tax Act for the Assessment Year 2018-19. The petitioner, a bedridden terminally ill lady, was alleged to have not filed her income tax return despite receiving sale consideration and rental income. The petitioner filed a belated return disclosing the income and seeking exemption under Section 54 of the Act. The revenue issued a show cause notice questioning the exemption claimed. The petitioner sought adjournment due to her medical condition, but limited time was granted. The impugned assessment order and demand notice were subsequently passed. The court noted the lacunae in the assessment process and directed the matter to be remanded to the Assessment Officer for further proceedings in accordance with law, considering the judicial precedents cited by the petitioner.

Issue 2: Denial of fair hearing
The petitioner contended that she was not granted a fair hearing on the issues raised. Despite requesting a personal hearing to explain the utilization of sale consideration for purchasing another property in her son's name due to her medical condition, no personal hearing was granted. The petitioner argued that the denial of a fair hearing violated the process mandated under Section 144B(6)(viii) of the Act and was an abrogation of natural justice. The court acknowledged the need for the petitioner to have a fair hearing and set aside the assessment order and demand notice, remanding the matter for further proceedings with due consideration to the petitioner's contentions and judicial precedents cited.

Conclusion:
In light of the circumstances, the High Court set aside the impugned assessment order and demand notice dated 15.03.2023 and remanded the matter to the Assessment Officer for proper consideration of the petitioner's submissions and granting her a fair opportunity to be heard. The writ petition and application were disposed of accordingly, with the file to be consigned to records.

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