Court Quashes Tax Order and Notice Under Sections 148 and 148A(d) Due to Procedural Lapses and Denial of Hearing.

The court quashed the order dated 19th April 2023 under Section 148A(d) and the notice under Section 148 of the Income-tax Act, 1961, due to improper application of mind by tax authorities and denial of a personal hearing to the Petitioner. The court emphasized the necessity of granting a personal hearing upon request before issuing such orders. The case was disposed of, with the court siding with the Petitioner on the issues of non-application of mind and procedural lapses in the approval process.

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Issues involved:
The issues involved in this case are the validity of a notice issued under Section 148A(b) of the Income-tax Act, 1961, the order passed under Section 148A(d) of the Act, and the subsequent notice issued under Section 148 of the Act.

Issue 1 - Approval under Section 151 of the Act:
The Petitioner challenged the approval granted under Section 151 of the Act, alleging a total non-application of mind by the Principal Commissioner of Income-Tax Officer-19. The Respondent attempted to justify the sanction, stating it was within the 3-year limit for the Assessment Year 2019-20. The court agreed with the Petitioner, noting the lack of application of mind in granting the approval.

Issue 2 - Non-application of mind in granting approval:
The court found discrepancies in the approval process, as the officers involved failed to consider the time limit for current proceedings correctly. The Additional/Joint Commissioner of Income-tax and the PCIT granted approval mechanically without proper scrutiny, leading to the erroneous issuance of the notice under Section 148A(b) of the Act.

Issue 3 - Denial of personal hearing:
The Petitioner alleged that personal hearing was denied by Respondent No. 1, citing it as premature. The court disagreed with the Respondent's argument that Section 148A(b) does not mandate a personal hearing, emphasizing that providing an opportunity to be heard implies a personal hearing. The court directed that in every case, a personal hearing must be granted before passing an order under Section 148A(d) of the Act if requested by the Petitioner.

Conclusion:
The court quashed and set aside the order dated 19th April 2023 passed under Section 148A(d) of the Act and the notice issued under Section 148 of the Act, highlighting the lack of proper application of mind and denial of personal hearing in the case. The petition was disposed of accordingly.

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