Natural justice in reassessment: failure to consider the assessee's reply and grant hearing justified setting aside the order.

A reassessment under the Income-tax Act was held unsustainable where the authority failed to follow the notice date under Section 144-B, did not fix any further date, and passed the order without considering the assessee's reply uploaded on the portal. The defect rendered the order ex parte and showed non-application of mind, amounting to a breach of natural justice. The objection that the assessee should be relegated to an alternative remedy was rejected because the procedural lapse was patent. The reassessment order was set aside and the matter remitted for fresh consideration after giving due opportunity of hearing.

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Issues: Whether the reassessment order under Section 147 of the Income-tax Act, 1961 was liable to be set aside for violation of natural justice and non-consideration of the assessee's reply under Section 144-B, including the contention that mandatory notice under Section 143(2) had not been issued or served.

Analysis: The order recorded that the date fixed in the notice under Section 144-B was not complied with by the authority, no further date was fixed, and the assessee's reply uploaded on the portal was not considered before the reassessment order was passed. On these facts, the order was treated as ex parte and passed without application of mind, amounting to breach of the elementary principles of natural justice. The objection based on alternative remedy was not accepted in view of the patent procedural defect.

Conclusion: The reassessment order was unsustainable and was set aside; the matter was remitted for fresh consideration after affording due opportunity of hearing to the assessee.

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