Assessment order under s.147 r.w.s.144B quashed for breach of natural justice; matter remitted for fresh hearing

HC quashed the assessment order under s.147 r.w.s.144B for breach of natural justice, finding proceedings hasty, inadequate notice and no proof of entitlement to personal hearing. The show-cause period was unreasonably short for a years-old assessment and extensions lacked proof of effective service. The matter is remitted to the assessing authority to afford a proper hearing and decide afresh in accordance with law without delay. Writ petition allowed.

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Issues involved:
The issues involved in this case are the validity of the assessment order passed by the Income Tax Department and the adherence to principles of natural justice in the proceedings.

Validity of Assessment Order:
The petitioner filed a writ petition seeking a Mandamus to declare the assessment order as void, illegal, arbitrary, and without authority of law. The challenge was based on the alleged violation of natural justice principles. The petitioner argued that the assessment order under Section 147 read with Section 144B of the Income Tax Act was passed hastily, without proper adherence to procedural requirements.

Principles of Natural Justice:
The petitioner contended that the show cause notice issued was seeking an explanation on a draft assessment order under Section 144C of the Act. It was argued that non-adherence to the mandatory requirements under Section 144C rendered the proceedings invalid. The petitioner also raised concerns about the short period given for responses and the lack of a reasonable opportunity to present their case.

Legal Arguments:
The Senior Counsel for the petitioner emphasized that the minimum period required for filing objections after issuing a draft assessment order is thirty days, which was not adhered to in this case. On the other hand, the Senior Standing Counsel for the Income Tax Department argued that the petitioner should have availed the statutory remedy of appeal instead of directly approaching the writ court. The respondent authorities were criticized for concluding the proceedings hastily within a short period.

Court's Analysis and Decision:
After considering the arguments from both sides and examining the records, the court found that the proceedings were rushed and lacked a fair opportunity for the petitioner to present their case. The court observed discrepancies in the timeline of notices and responses, indicating a lack of proper communication and procedural fairness. Consequently, the court set aside/quashed the impugned order and remitted the matter back to the authority for a fresh decision in accordance with the law.

Conclusion:
The court allowed the writ petition, emphasizing the importance of providing a reasonable opportunity to the petitioner in such proceedings. No costs were awarded, and any pending miscellaneous petitions were ordered to be closed as a result of the judgment.

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