2024 (1) TMI 1441 - HC - Income Tax

Petition Granted: Order and Notice Under IT Act Quashed for Violating Natural Justice in Assessment Year 2016-17

Smt. Kiran Milapchand Jain Versus The Assessment Unit/Verification Unit/ Technical Unit/Review Unit Income Tax Department, The Assistant Commissioner of Income Tax Circle 2 (2) (1), Banglaore, Principal Chief Commissioner of Income Tax, Bengaluru

The Karnataka HC allowed the petition, quashing the impugned order and notice issued by the second respondent under the IT Act for the Assessment Year ... Reassessment order u/s 148A(d) - the petitioner had not submitted his reply to the Show Cause Notice - specific contention of the petitioner that due to a technical glitch and non-availability of relevant documents, it was not possible for the petitioner to submit a reply/response within the stipulated period - it is contended that during the period between 07.03.2023 and 28.03.2023 petitioner submitted his replies which has not been considered by respondent No.3 in the impugned order, which is contrary to the material on record as well as violative of principles of natural justice and the same deserves to be set aside. HELD THAT:- A perusal of the material on record will indicate that despite the petitioner having submitted his replies on 21.03.2023 and 25.03.2023 prior to passing of the impugned order on 28.03.2023 as held by this Court in Shankar Reddy’s case [2023 (9) TMI 1673 - KARNATAKA HIGH COURT] and since the impugned order without providing sufficient or reasonable opportunity to the petitioner is violative of principles of natural justice, the respondent No.2 committed an error in not considering the reply which was undisputedly submitted prior to the impugned order and consequently, the impugned order passed u/s 148A(d) deserves to be quashed and the matter be remitted back to the second respondent for reconsideration afresh in accordance with law. The petition before the Karnataka High Court involved a challenge to certain actions taken by the second respondent under the Income Tax Act, 1961. The petitioner sought the quashing of a show cause notice, an order, and a notice issued by the second respondent relating to re-assessment proceedings for the Assessment Year 2016-17. The key issues considered by the Court included the failure to consider the petitioner's responses submitted after the due date of the show cause notice, the violation of principles of natural justice, and the need for reconsideration of the matter by the second respondent.The Court noted that the second respondent had issued a show cause notice on 07.03.2023 under Section 148A(b) of the IT Act, requiring the petitioner to upload a response by 17.03.2023. The petitioner claimed that due to technical issues and unavailability of documents, they could not meet the deadline. Subsequently, the second respondent passed an order on 28.03.2023 under Section 148A(d) of the IT Act, citing the petitioner's failure to respond to the show cause notice as the basis for the order.The petitioner argued that they had submitted responses on 21.03.2023 and 25.03.2023, which were not considered by the second respondent before passing the impugned order. The petitioner contended that the failure to consider these responses violated principles of natural justice. The petitioner also relied on a previous court decision to support their argument that responses submitted after the due date of a notice should be considered before passing any order.On the other hand, the respondents defended the impugned order and contended that the petition lacked merit and should be dismissed.The Court, after considering the submissions and the material on record, found that the second respondent had erred in not considering the petitioner's responses submitted before the impugned order was passed. The Court held that the failure to provide a reasonable opportunity to the petitioner and consider their responses violated principles of natural justice. Therefore, the Court allowed the petition, quashed the impugned order and notice, and remitted the matter back to the second respondent for reconsideration in accordance with the law.In conclusion, the Court granted the relief sought by the petitioner, quashing the impugned order and notice, and directing the second respondent to reconsider the matter afresh from the stage of the initial notice. The Court also emphasized the importance of providing the petitioner with a reasonable opportunity to be heard and reserved the right for the petitioner to submit further pleadings and documents.