Assessment Order Overturned for Breach of Natural Justice; Petitioner Gets New Hearing and Submission Opportunity.

The assessment order dated 26.03.2024 was set aside due to a breach of natural justice, as the petitioner was not given a reasonable opportunity to present evidence. The matter was remanded for reconsideration, allowing the petitioner fifteen days to submit a detailed reply with relevant documents. The respondents were instructed to provide portal access for submission and a video conference hearing. A new assessment order must be issued within three months of receiving the petitioner's reply. The case was disposed of without costs, and related motions were closed.

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Issues:
Challenge to assessment order based on breach of principles of natural justice.

Analysis:
The petitioner filed an income return for assessment year 2022-23, declaring income of Rs.1,19,06,850. Notices were issued under Section 143(2) and Section 142(1) for scrutiny. A show cause notice proposing a variation in purchases was sent on 19.03.2024, with a response requested by 20.03.2024. The petitioner sought more time, which was extended to 21.03.2024. The petitioner responded on the same day, providing ledger account statements of suppliers. The assessment order was issued without considering these responses, leading to the challenge on grounds of natural justice.

The petitioner's counsel argued that despite the short extension, the response was submitted on time, offering further information if needed. The assessment order confirmed the proposed variation due to the petitioner's alleged failure to provide necessary documents. The expenses were treated as unexplained and added to the income under relevant sections. The lack of a reasonable opportunity for the petitioner to present evidence was highlighted as a basis for challenging the order.

The respondent's counsel contended that the order followed three prior notices under Section 143(2) and Section 142(1), indicating adequate opportunity for the petitioner. The show cause notice required all supporting documents by 20.03.2024, with an extension granted only until 21.03.2024 due to approaching limitation period. The order justified the decision based on the limited time available and the impending deadline.

The refusal to grant further time due to the impending limitation period was a crucial point of contention. The entire claimed expenses were added to the income without allowing sufficient time for the petitioner to respond adequately. The judgment emphasized the importance of providing a reasonable opportunity to the petitioner for a fair assessment process.

Consequently, the assessment order dated 26.03.2024 was set aside, and the matter was remanded for reconsideration. The petitioner was given fifteen days to submit a detailed reply with relevant documents. The respondents were directed to provide portal access for submission, followed by a reasonable opportunity for the petitioner, including a video conference hearing. A fresh assessment order was to be issued within three months from receiving the petitioner's reply. The case was disposed of with no costs incurred, and related motions were closed.

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