Case Law Details
Mohammed Sait Vs National Faceless Assessment Centre Rep By Additional / Joint / DCIT /ITO (Karnataka High Court)
In a significant decision, the Karnataka High Court addressed the issue of procedural fairness in income tax assessments, specifically in Mohammed Sait’s case against the National Faceless Assessment Centre. The petitioner challenged the legality of an assessment order under Section 143(3) of the Income Tax Act, 1961, citing violations of natural justice.
The petitioner argued that the assessment order, along with associated notices and computation sheets, was unjustly passed without allowing sufficient time to respond to a show cause notice issued just two days before the mandated reply date. This short timeframe, according to the petitioner, prevented a fair opportunity to present a defense, ultimately prejudicing the case.
The court examined the records and acknowledged that the short notice period of two days for reply indeed violated principles of natural justice. Emphasizing the importance of procedural fairness, the court set aside the assessment order, computation sheets, demand notices, and related notices. The matter was remanded to the stage where the petitioner could adequately respond to the show cause notice.
In its judgment, the Karnataka High Court upheld the principles of natural justice and fairness in administrative proceedings, ensuring that taxpayers have adequate time to respond to notices and defend their cases effectively.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has sought for issuance of writ of certiorari quashing the order dated 21.03.2024, passed under Section 143(3) read with Section 144B of Income Tax Act, 1961 (for short `the Act1) at Annexure-`A1, computation sheet at Annexure-`A-11, demand notice at Annexure-`A-21 and notice under Section 271AAC(1) of the Act at Annexure-`A-31.
2. It is the case of the petitioner that the impugned Assessment Order is passed in violation of principles of natural justice. In so far as the show cause notice issued at Annexure-`G1, dated 16.03.2024 is concerned, it had mandated filing of reply on or before 18.03.2024. It is submitted that such short time given for reply has resulted in violation of principles of natural justice and prejudice has been caused as the petitioner was not in a position to submit the reply. It is also submitted that, in the light of failure to upload the reply as time limit has lapsed, the petitioner was unable to put forth his case effectively resulting in passing of an order in the absence of reply to the contentions raised in the show cause notice dated 16.03.2024.
3. These facts of date of issuance of notice and reply to be furnished on 18.03.2024 are borne from records. The contention of prejudice being caused by short time of two days given for making out reply requires consideration.
4. Accordingly, on such sole ground, the order at Annexure-`A’, computation sheet at Annexure-`A-1′, demand notice at Annexure-`A-2′ and notice at Annexure-`A-3′, are set aside and the matter is relegated to the stage of reply to the show cause notice at Annexure-`G’. The petitioner is at liberty to upload the order of this Court by way of reply to the recovery notice/show cause notice. All contentions are kept open. The Writ Petition is disposed off accordingly.
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