Reassessment notices u/s 148A(d) and 148 set aside for denying natural justice and ignoring document requests

The HC set aside reassessment notices u/s 148A(d) and 148 due to denial of natural justice. The petitioner's request for documents and personal hearing was ignored by the AO who acted in undue haste. The court held that while Revenue Audit Objections constitute valid grounds for reopening concluded assessments, proper procedure must be followed. The respondents were directed to provide requested documents within one week, after which the petitioner must reply within one week, followed by a personal hearing and fresh order u/s 148(d) within three weeks.

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Issues:
- Validity of the Notice dated 27.03.2024 issued by Respondent no.3 under Section 148A(b) of the IT Act
- Validity of the Order dated 20.04.2024 passed by Respondent no.3 under Section 148A(d) of the IT Act
- Validity of the Show Cause Notice dated 20.04.2024 issued by Respondent no.2 under Section 148A(b) of the IT Act
- Direction for supplying certified copies of assessment and reassessment proceedings
- Compliance with Circulars and Guidelines for issuance of notices under Section 148 of the IT Act

Analysis:

1. Validity of Notice dated 27.03.2024 under Section 148A(b): The petitioner challenged the Notice issued by Respondent no.3 under Section 148A(b) of the IT Act. The petitioner contended that the Notice was issued without providing relevant documents and a personal hearing, violating the principles of natural justice. The Court noted that the petitioner's request for documents and a personal hearing was not considered, indicating undue haste on the part of the Assessing Officer. The Court found that the Assessing Officer had not followed the amended instructions regarding respecting the assessee's request for a personal hearing. The Court set aside the Order dated 20.04.2024 under Section 148A(d) and directed the respondents to provide the requested documents within a week and allow a personal hearing before passing a new order under Section 148(d) within three weeks.

2. Validity of Order dated 20.04.2024 under Section 148A(d): The petitioner also challenged the Order passed by Respondent no.3 under Section 148A(d) of the IT Act. The petitioner argued that the Order was issued without providing copies of Audit Objections and an opportunity for a personal hearing. The Court observed that the petitioner's right to a reasonable opportunity of hearing as per Circular dated 22.08.2022 was not respected. The Court emphasized that the Assessing Officer must provide a reasonable opportunity of hearing before issuing an Order under Section 148(d). Consequently, the Court set aside the Orders dated 20.04.2024 under Section 148A(d) and directed compliance with the Circular by providing necessary documents and conducting a personal hearing.

3. Validity of Show Cause Notice dated 20.04.2024 under Section 148A(b): The petitioner sought to challenge the Show Cause Notice issued by Respondent no.2 under Section 148A(b) of the IT Act. The petitioner alleged that the Notice was issued without following due process, including not providing relevant documents and a personal hearing. The Court found merit in the petitioner's argument regarding the lack of opportunity for a personal hearing and failure to provide relevant documents. As a result, the Court set aside the Show Cause Notice and directed the respondents to provide the requested documents and conduct a personal hearing before taking further action.

4. Direction for Supplying Certified Copies: The petitioner requested certified copies of the assessment and reassessment proceedings, which were not provided despite the application and payment of fees. The Court acknowledged the petitioner's right to access relevant documents and ordered the respondents to provide all requested documents within a week, allowing the petitioner to submit a reply within another week. This direction aimed to ensure transparency and fairness in the proceedings.

5. Compliance with Circulars and Guidelines: The Court considered the Circular issued by the Government of India regarding the issuance of notices under Section 148 of the IT Act. It emphasized the importance of respecting the assessee's request for a personal hearing and providing a reasonable opportunity for the same. The Court noted the failure of the Assessing Officer to adhere to these guidelines and directed compliance by providing necessary documents and conducting a personal hearing before making any decisions under Section 148(d).

In conclusion, the Court allowed the writ petition to the extent of setting aside the Orders dated 20.04.2024 under Section 148A(d) and Section 148, directing the respondents to provide requested documents, conduct a personal hearing, and pass a new order after considering the petitioner's submissions. The judgment highlighted the significance of following due process, respecting the assessee's rights, and ensuring a fair and transparent assessment process in line with legal provisions and circulars.

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