Natural Justice: opportunity to reply and personal hearing required where notices sent to outdated address; assessment set aside.

Whether an assessment under Section 144 read with Section 147 can stand where the assessee did not receive departmental communication due to notices being sent to an outdated address: the HC applied the requirement of natural justice and the statutory notice regime, finding that absence of opportunity to file objections or to appear vitiated the assessment; accordingly the impugned assessment dated 26.11.2019 was set aside and the matter remanded to the tax department with directions to afford the petitioner an opportunity to file a reply and to grant a personal hearing before passing fresh orders.

---

---

Issues: Whether the assessment order dated 26.11.2019 passed under Section 144 read with Section 147 of the Income-tax Act, 1961 can be set aside on the ground that the assessee was not afforded an opportunity to file objections or to be heard due to notices being sent to her old address.

Analysis: The Court noted that the petitioner had shifted residence from Delhi to Chennai in 2008 and did not receive departmental correspondence sent to her old Delhi address; the impugned assessment under Section 144 read with Section 147 of the Income-tax Act, 1961 was passed without giving the petitioner an opportunity to file a reply or to appear for personal hearing. The respondent conceded that if directed by the Court, an opportunity would be provided. The Court considered the requirement of affording an opportunity of filing reply and personal hearing where an assessment affecting the taxpayer is made, and found that absence of notice or opportunity resulting from correspondence being sent to an outdated address justified interference.

Conclusion: The impugned assessment order dated 26.11.2019 is set aside and the matter is remanded to the Department with a direction to afford the petitioner an opportunity to file her reply and to grant a personal hearing, after which the appropriate orders shall be passed (decision in favour of the assessee).

---