AO's hasty reopening under sections 148A(d) and 148 set aside for denying reasonable hearing opportunity

The Allahabad HC set aside orders under sections 148A(d) and 148 for reopening assessment due to failure to provide reasonable opportunity of hearing as mandated by CBDT Circular dated 22.08.2022. The court found that while Revenue Audit Objections constitute valid grounds for reopening concluded assessments, the AO acted hastily without supplying requested documents or granting personal hearing to the petitioner. The court directed respondents to provide all relevant documents within one week upon payment of fees, with petitioner to submit reply within one week thereafter. The writ petition was allowed.

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Issues:
Challenging Impugned Notice and Orders under IT Act, Request for Certified Copies of Assessment Proceedings, Violation of Rights to Personal Hearing, Reliance on Legal Judgments and Circulars, Dispute over Audit Objections as Grounds for Reopening Assessment, Importance of Providing Reasonable Opportunity of Hearing, Setting Aside Orders and Directing Provision of Relevant Documents.

Analysis:
The petitioner filed a writ petition challenging the Impugned Notice dated 20.04.2024 and subsequent Orders issued under the IT Act. The petitioner sought quashing of the Notice, Order, and Show Cause Notice, along with a direction to supply certified copies of assessment and reassessment proceedings. The petitioner's case involved a search and seizure operation, subsequent assessment proceedings, and an appeal against the Assessment Order. The Revenue Audit raised objections leading to a notice under Section 148A(b) of the IT Act. The petitioner's requests for relevant documents and personal hearing were not fulfilled, leading to the impugned Orders dated 24.02.2024 under Section 148A(d) and Section 148 proposing reassessment of income.

The petitioner relied on legal judgments from the High Courts of Madras and Bombay, along with a Circular by the Government of India, to support their case. The petitioner emphasized the right to a reasonable opportunity of hearing and pointed out violations in the assessment process. The respondents, on the other hand, cited a judgment from the High Court of Kerala to counter the petitioner's arguments regarding Audit Objections as grounds for reopening assessments.

The Court examined the arguments presented by both parties and referred to legal precedents, including judgments by the Supreme Court, to establish the legal framework. The Court acknowledged the importance of providing a reasonable opportunity of hearing to the assessee before passing orders under Section 148(d) of the IT Act. It noted that Revenue Audit Objections could be considered valid grounds for reopening assessments.

Ultimately, the Court found that the petitioner's rights to a fair hearing were violated as the Assessing Officer did not provide the requested documents or a personal hearing. The impugned Orders were set aside, and the respondents were directed to provide all relevant documents requested by the petitioner within a week. The petitioner was granted one week to submit a reply, followed by a personal hearing, after which a new order under Section 148(d) was to be passed within three weeks.

In conclusion, the writ petition was allowed to the extent of setting aside the impugned Orders and ensuring the petitioner's right to a fair hearing and access to relevant documents in the assessment proceedings.

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