Income Tax Assessment Overturned Due to Lack of Response Deadline; Case Remanded for Fair Hearing.

The court found a violation of natural justice principles in an income tax assessment case, as the petitioner was not given a clear deadline to respond to a notice under Section 148. The assessment order was finalized before the petitioner could respond, leading to the order being set aside. The writ petition was allowed, and the case was remanded for the petitioner to submit a response. If the response is submitted, the assessing authority must consider it and provide an online hearing before finalizing the assessment. The writ petition was disposed of, and pending applications were dismissed.

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Issues:
The judgment involves the violation of principles of natural justice in an income tax assessment case.

Summary:
1. The petitioner, an assessee under the Income Tax Act, did not file its return of income for the assessment year 2018-19. The petitioner deposited cash and withdrew cash in the relevant financial year. The petitioner was issued a notice under Section 148 of the Act to explain the cash deposit, but before the deadline for response, the assessment order was finalized. The petitioner argued a violation of natural justice principles as they believed they had until a later date to respond. The court agreed that the absence of a specified response deadline led to a genuine misunderstanding, thus setting aside the order for a fresh opportunity for response and assessment.

2. The Senior Standing Counsel for the Income Tax Department did not dispute the lack of a specified adjournment date for the petitioner's response to the notice. The status of the request for adjournment did not indicate acceptance or rejection, causing confusion regarding the deadline for response.

3. The court concurred with the petitioner's contention that the absence of a specified response deadline created a reasonable belief that the adjournment request was accepted until a later date. Since the order was passed before this assumed deadline, the court found a violation of natural justice principles, leading to the order being deemed invalid and set aside.

4. Consequently, the writ petition was allowed, the impugned order was set aside, and the matter was remanded for the petitioner to upload a response to the notice. Failure to upload the response within the prescribed time would allow for a fresh order. However, if the response is uploaded upon receiving the link, the assessing authority will consider it and provide an online hearing before finalizing the assessment. The writ petition was disposed of with these directions, and any pending applications were dismissed.

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