Assessment Orders Overturned Due to Procedural Flaws; Case Remanded for Reconsideration and Fair Hearing Options Granted.

The HC set aside the impugned assessment and penalty orders due to procedural deficiencies, specifically the lack of consideration of debits in the petitioner's bank account. The matter was remanded for reconsideration, granting the petitioner an opportunity to respond to the show cause notice. The court directed the first respondent to provide a fair hearing, including a video conference option, and to issue a fresh order within four months of receiving the petitioner's reply. The respondents were also instructed to ensure the petitioner has access to the portal. The writ petitions were disposed of with no order as to costs.

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Issues involved: Challenge to assessment order and penalty order on grounds of lack of reasonable opportunity for contesting the matter on merits.

Assessment Order Challenge: The petitioner, an income tax assessee, received a notice u/s 148A(b) of the Income Tax Act 1961 for alleged escaped income of Rs. 53,56,000 for the assessment year 2015-16. Subsequently, an order was issued u/s 148A(d) as the petitioner did not reply to the notice, followed by a notice u/s 148. The petitioner contended that the respondents only considered the credits in the bank account and not the debits, which would reduce the escaped amount. The petitioner argued that the 'income chargeable to tax' should be equal to or more than Rs. 50 lakhs.

Respondent's Submission: The respondent initiated re-assessment proceedings in compliance with legal requirements. The respondent argued that the writ petitions were filed after the limitation period and that the entire undisclosed credits could be considered for reopening the assessment. The respondent also highlighted that the petitioner did not file the return of income.

Judgment: The court observed that the respondents proceeded ex-parte due to the petitioner's non-participation. It was noted that the aggregate deposits were considered, but the debits were not. The court decided to remand the matter for reconsideration, allowing the petitioner to reply to the show cause notice within 15 days. The first respondent was directed to provide a reasonable opportunity to the petitioner, including a video conference hearing, and issue a fresh order within four months from the receipt of the petitioner's reply. The respondents were instructed to facilitate access to the portal for the petitioner.

Conclusion: The impugned orders were set aside, and the matter was remanded for reconsideration. The petitioner was granted an opportunity to respond to the show cause notice, with specific directives for a fair hearing process. The writ petitions were disposed of with no order as to costs.

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