The Madras High Court set aside an impugned assessment order issued by the Income Tax Department, which provided only one day for the petitioner to reply, citing a breach of natural justice principles.
The petitioner, represented by Mr. G. Varadhini Karthick, had their assessment reopened by an order under Section 148A(d) and a notice under Section 148 of the Income Tax Act, 1961. Subsequently, the petitioner filed a return of income for the assessment year 2018-19. A notice dated 22.06.2023 under Section 143(2) of the I-T Act was issued, to which the petitioner responded on 05.07.2023.
Further notices under Section 142(1) were issued on 28.11.2023, followed by a show cause notice dated 16.03.2024, giving the petitioner one day to reply. The petitioner replied on 17.03.2024. Despite these communications, the assessment order dated 24.03.2024 was issued.
G. Varadhini Karthick, counsel for the petitioner, referred to the notice under Section 143(2) and the reply thereto. She pointed out the petitioner had stated that the amount received in the South Indian Bank was only Rs.43,21,783/- not Rs.85,84,660/-.
The petitioner’s counsel submitted a certificate from the South Indian Bank corroborating this statement and pointed out that the petitioner had granted only one day’s time to reply.
The respondents, represented by Dr. B. Ramasamy, contended that the petitioner did not reply to several notices, including those under Sections 148 and 142(1). He argued that the impugned order was a reasoned order, with details of cash deposits amounting to Rs.85,84,660/- in the South Indian Bank, which the petitioner failed to satisfactorily explain.
Justice Senthilkumar Ramamoorthy noted that the show cause notice provided only one day for the petitioner to reply, which was unreasonable.
The court set aside the impugned order, and the matter was remanded for reconsideration. The petitioner was permitted to submit additional documents, if any, within a maximum limit of 15 days from the date of receipt of a copy of this order.
The respondents were directed to take the necessary action to provide access to the portal. Additionally, the department must offer a reasonable opportunity to be heard, including a personal hearing. Following this, a fresh assessment order must be issued within three months from the date of receipt of additional documents from the petitioner.
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