2024 (1) TMI 755 - HC - Income Tax

Tax Assessment Order Overturned for Ignoring Reply and Denying Hearing; Remanded for Reconsideration in 3 Months.

N. Kannammal Versus Assessment Unit, Income Tax Department, New Delhi

The Court set aside the impugned assessment order under section 143(3) r.w.s.144B of the Income Tax Act, 1961, due to the respondent's failure to consider ... Validity of assessment order passed u/s 144B - grievance of the petitioner that the impugned order came to be passed on 07.12.2022 without granting an opportunity of personal hearing to the petitioner - HELD THAT:- Though the petitioner filed her reply to the show cause notice dated 24.11.2022 within the time limit prescribed i.e., before 01.12.2022 at 13.19 hours, the respondent has not considered the same on account of the fact that the reply got reflected in ITBA-PAN only after the proposal was sent to ILDP for approval, which culminated in passing the final assessment order on 07.12.2022, by recording, as if the petitioner has not filed her reply. Thus, considering the fact that the reply filed by the petitioner got reflected in ITBA only after the assessment proposal was sent to ILDP for approval, the respondent-Department has not considered the petitioner's reply while passing the impugned order dated 07.01.2022. Apart from non consideration of the reply filed by the petitioner, it is the grievance of the petitioner that the impugned order came to be passed on 07.12.2022 without granting an opportunity of personal hearing to the petitioner. Therefore, this Court is of the view that the impugned order is not sustainable not only due to non-consideration of the reply filed by the petitioner but also suffers from violation of the principles of natural justice. Hence, this Court is inclined to set aside the impugned order. Writ Petition is allowed, the impugned order passed by the respondent is set aside and the matter is remitted back to the respondent for fresh consideration, in which case, the respondent is directed to consider the reply filed by the petitioner and after affording an opportunity of personal hearing to the petitioner shall pass the assessment order within a period of three months from the date of receipt of a copy of this order. Issues:The assessment order passed under section 143(3) r.w.s.144B of the Income Tax Act, 1961 challenged for non-consideration of reply and lack of opportunity for personal hearing.Analysis:The petitioner filed her return of income for the AY 2021-22 and was selected for scrutiny. A show cause notice was issued, and the petitioner replied within the specified time limit. However, the impugned order stated that no reply was filed, as it was reflected in the ITBA system after the assessment proposal was sent for approval. The petitioner argued that the order was passed without considering her reply and without providing a personal hearing, violating principles of natural justice.Court's Decision:The Court considered the submissions and found that the respondent did not consider the petitioner's reply due to the delay in reflection in the ITBA system. The Court held that the impugned order was not sustainable as it did not consider the petitioner's reply and violated principles of natural justice by not providing a personal hearing. Consequently, the Court set aside the impugned order and remitted the matter back to the respondent for fresh consideration, directing them to consider the petitioner's reply and provide a personal hearing before passing the assessment order within three months. No costs were awarded, and the connected miscellaneous petition was closed.