Order u/s. 148A(d) Without Opportunity of Hearing is Unlawful

Asamannoor  Service Co-Operative Bank Ltd Vs ITO (Kerala High Court)

Kerala High Court held that order passed under section 148A(d) of the Income Tax Act without granting an opportunity of being heard as required u/s. 148A(b) makes the order unsustainable in law and hence is liable to be set aside.

Facts- The petitioner is a Co-operative society who provides credit facilities to its members and receive deposits from them. According to the petitioner, for the assessment year 2019-20, they did not have any taxable income under the Income Tax Act and they did not file return for the said assessment year. The Income Tax Officer has issued a notice u/s. 148A(a) of the Act to the petitioner stating that the details of the information of the enquiry conducted on which reliance has been placed along with the documents enclosed in the notice suggest that the income of the petitioner had escaped assessment and therefore, the petitioner was required to so far as vide impugned notice u/s. 148A(a) the Act should not be issued. Thereafter, notice u/s. 148(A)(b) was issued to the petitioner calling upon the petitioner to show cause why a notice u/s. 148 should not be issued.

The grievance of the petitioner is that without affording an opportunity of being heard mandated u/s. 148A(d), an order has been passed, and after obtaining sanction from the competent authority, the assessing authority issued notice u/s. 148 to the petitioner.

Conclusion- Section 148A(b) begins with “provide an opportunity of being heard to the assessee”. Hearing does not mean filing reply to the show cause notice. If the provision of this Section contemplates opportunity of being heard that has to be construed as personal hearing. Therefore, I do not find substance in the submission of learned Standing Counsel that an opportunity of being heard to the assessee contemplated under Section 148A(b) does not necessarily mean personal hearing. In my view, opportunity of being heard means an opportunity of personal hearing to the assessee.

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