Calcutta HC Sets Aside Assessment Order due to Violation of Natural Justice

Kunal Daga Vs Union of India (Calcutta High Court)

Assessee submitted two replies dated 24.03.2022 to both the show cause notices totally denying knowledge of the alleged person with whom the assessee is alleged to have had transactions. On 30^th March, 2022 the order was passed under Section 148A(d) of the Act. Thereafter notices under Sections 143 and 142(1) was issued for which a detailed reply was given by the assessee on 21.02.2023. Subsequently show cause notice was issued on 23.02.2023 giving less than three days time to the assessee to respond, in fact, the show cause notice runs to 11 pages. Before the assessee could respond the assessment has been completed and orders have been passed on 24.03.2023. The chain of events have been set out to show that there has been violation of principle of natural justice at different stages of the matter. The reopening of an assessment is a very serious matter and if such power is resorted to the assessee is entitled to an adequate opportunity to put forth their submissions. One more point which has been raised by the learned advocate for the appellant is that in the order passed under Section 148A(d) of the Act dated 30^thMarch, 2022 names of 12 companies have been mentioned which was never the allegation when the show cause notice under Section 148A(d) of the Act was issued and, therefore, it is submitted that the assessing officer proceeded on entirely a new set of facts which were never put to the assessee.

In the light of the above, HC held that the reassessment proceedings has to be redone and even if the assessment order has been passed, the same is required to be set aside and the matter is to be restored to the assessing officer for a fresh consideration.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

1. This intra court appeal by the writ petitioner is directed against the order dated 04.04.2023 passed by the learned Single Bench in WPA 6501 of 2023. The said writ petition was filed challenging an order passed by the assessing officer under Section 148A(d) of the Income Tax Act, 1961 dated 30^thMarch, 2022. The writ petition was filed on 16^th March, 2023. However, the same was heard on 4th April, 2023. In the interregnum the assessing officer has completed the reassessment proceedings and passed the order on 24.03.2023.

Please become a Premium member. If you are already a Premium member, login here to access the full content.