Income Tax Assessment Order Overturned for Breaching Natural Justice; Case Remanded for Fresh Hearing Opportunity.

The Calcutta HC set aside an Income Tax assessment order dated 26th December 2022 due to a breach of Natural Justice principles, as the petitioner was unable to participate in a video conference hearing. The case was remanded to the assessing officer for a fresh order, ensuring a fair hearing opportunity. The merits of the assessment were not addressed, and the writ petition was disposed of accordingly.

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Issues: Violation of principles of Natural Justice in an Income Tax assessment proceeding

Analysis:
The High Court of Calcutta heard a writ petition challenging an order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, on the grounds of denial of participation in the assessment proceeding for violating principles of Natural Justice. The petitioner alleged that despite receiving a notice for a video conference hearing, they were unable to access the link provided by the Department, as evidenced by screenshot copies submitted with the petition. The Court noted that the petitioner could not participate in the hearing through no fault of their own. Consequently, the impugned order dated 26th December, 2022, was set aside, and the matter was remanded back to the assessing officer for a fresh speaking order after providing an opportunity of hearing to the petitioner or their authorized representative.

The Court clarified that the setting aside of the impugned order was solely based on the violation of the principle of Natural Justice and did not delve into the merits of the assessment order. The assessing officer was directed to reconsider the assessment strictly in accordance with the law. The writ petition, numbered WPO/151/2023, was disposed of with these observations and directions.

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