M. S. Mohamed Siddique & Co. Vs Assessment Unit/Verification unit/ Technical Unit/Review Unit Income/ Tax Department (Madras High Court)
In a recent ruling, the Madras High Court addressed the implications of personal hearings in tax assessments, specifically in the case of M. S. Mohamed Siddique & Co. vs. Assessment Unit/Verification Unit/Technical Unit/Review Unit of the Income Tax Department. The Court dismissed the writ petition challenging an assessment order, emphasizing that failure to request a personal hearing negates claims of denial of such an opportunity.
Background of the Case
The petitioner, M. S. Mohamed Siddique & Co., is a partnership firm based in Chennai, operating since 1999 in the warehousing services sector. The firm faced a show cause notice under Section 148A(b) of the Income Tax Act concerning the assessment year (AY) 2018-19, issued on March 31, 2022. The notice aimed to reopen the assessment for that year. However, the petitioner did not respond to this initial notice.
A subsequent notice was issued on March 6, 2023, to which the petitioner provided a reply on March 8, 2023. Despite this, the assessment order was issued on March 17, 2023, without granting a personal hearing to the petitioner. This led the firm to challenge the order in the High Court.
Court Proceedings
During the proceedings, the counsel for the petitioner argued that the lack of a personal hearing amounted to a denial of natural justice. The petitioner highlighted that while they had disclosed an income of ₹91,80,856 in their return, the return was filed late under the provisions of Section 144B. They contended that their response to the second notice was disregarded, leading to an incorrect assessment.
