2023 (11) TMI 348 - HC - Income Tax

Assessment order under Section 144B set aside for ignoring petitioner's adjournment requests and denying fair hearing opportunity

Kondreddi Swetha Versus Assessment Unit, The Income tax officer, The Union of India,

Kondreddi Swetha Versus Assessment Unit, The Income tax officer, The Union of India, - TMI Issues involved:The issues involved in this case include the legality of the proceedings/order issued by the 1st respondent under the Income Tax Act without providing a reasonable opportunity, violation of principles of natural justice, and the subsequent assessment order passed by the respondent.Details of the Judgment:Issue 1: Lack of Opportunity and Violation of Natural JusticeThe petitioner, engaged in excavator business, did not file returns for AY 2015-16 due to income below the exemption limit. The respondent reopened the case based on flagged information about property purchase and machinery rent. The petitioner filed ITR and responded to subsequent notices. However, the respondent issued a show cause notice proposing significant additions without considering the petitioner's request for extension due to illness. The petitioner's requests for extension and video conference were ignored, leading to the assessment order allegedly violating natural justice.Issue 2: Respondent's Counter and Assessment ProcessThe respondent contended that the petitioner had alternative appeal remedies and failed to file returns initially. The respondent claimed to have followed due procedure in issuing notices and providing opportunities for the petitioner to respond. The respondent argued that ample opportunities were given, but the petitioner failed to provide explanations, thus justifying the assessment order.Issue 3: Examination of Natural Justice ViolationThe court scrutinized whether the assessment order violated natural justice principles. The petitioner presented evidence of requests for adjournment and video conference due to medical reasons, which were not adequately addressed by the respondent. The court found that the respondent's silence and passing of the order without fair opportunity breached natural justice, leading to the order being set aside.ConclusionThe court allowed the writ petition, setting aside the assessment order and directing the respondents to grant the petitioner sufficient time for explanations and relevant document submission. The court emphasized the importance of natural justice and the need for fair opportunities in assessment proceedings, ordering a new assessment process with proper adherence to the law and rules.This summary provides a detailed breakdown of the judgment, highlighting the key issues, arguments presented by both parties, and the court's decision regarding the violation of natural justice in the assessment process.