Pramod Kumar Madhogarhia Vs Union of India (Calcutta High Court)
The Hon’ble Calcutta High Court in Pramod Kumar Madhogarhia v. The Union of India & Ors. [MAT 729 of 2023 with I.A. No. CAN 1 of 2023 dated May 12, 2023] has set aside the Show Cause Notice (“SCN”) issued under Section 148A(b) of the Income Tax Act, 1961 (“the IT Act”), the consequential orders and the order passed by the single bench dismissing the petition of the assessee, on the grounds that the opportunity of being heard provided at first instance should be an effective opportunity, since, the power of reopening an assessment is a ‘power’ which should be exercised with adequate reason.
Facts:
The Assessing Officer (“the AO”) issued a SCN dated March 15, 2022 under Section 148A(b) of the IT Act, alleging that Mr. Pramod Kumar Madhogarhia (“the Petitioner”) has entered into purchase transactions and the Petitioner was required to provide corroborative evidence and authentic details/documents to support such transactions.
In response to the SCN, the Petitioner submitted an interim reply dated March 17, 2022, stating about the nature of transactions and enclosed the ledger for reference. However, the Petitioner could not submit the bank statement due to lack of time, since the day when the reply was furnished on holiday.
Accordingly, the AO passed the order dated March 30, 2022 under Section 148A(d) of the IT Act, against which the Petitioner filed a petition before the Hon’ble Calcutta High Court. Meanwhile, during the pendency of the petition, the Assessment Order dated March 22, 2023 (“the Assessment Order”) under Section 147 of the IT Act was passed. Subsequently, the petition was dismissed vide Order dated April 4, 2023 (“the Impugned Order”) on the ground that the Assessment Order passed is an appealable order.
Being aggrieved, by the dismissal of the petition, the Petitioner had filed this intra-court appeal.
Issue:
Whether the Assessment Order and the Impugned Order have been passed by violating the principle of natural justice?
Held:
The Hon’ble Calcutta High Court in M.A.T No. 729 of 2023 with I.A. No. CAN 1 of 2023 held as under:
