HC Quashes Section 148A(d) Order Based on Cash, Loan & Transaction Records not shared with Appellant
Case Law Details
Krishan Kumar Gupta Vs ITO (Calcutta High Court)
Introduction: A recent case before the Calcutta High Court, titled “Krishan Kumar Gupta Vs ITO,” revolved around a challenge to an Income Tax order dated April 14, 2023, for the assessment year 2019-20. The petitioner alleged a violation of the principle of natural justice, specifically related to the use of certain statements and documents in the order that were not part of the notice under Section 148A(b) of the Income Tax Act, 1961.
Background: The petitioner filed a writ petition challenging the aforementioned Income Tax order issued under Section 148A(d) of the Income Tax Act, 1961. The primary ground for this challenge was the alleged violation of the principle of natural justice. The petitioner contended that the assessing officer, while passing the impugned order, relied on statements and documents related to cash, loans, and transactions mentioned in paragraph 7.3 of the order. These transactions were never indicated in the annexure to the notice issued under Section 148A(b) of the Act. Additionally, no show cause notices were issued regarding these transactions, and there were no indications in the notice under Section 148A(b) of the Act concerning them.
Response from the Respondent: During the proceedings, Mr. Dutt, the learned advocate representing the respondent, could not refute the petitioner’s allegation that the relevant material concerning the transactions was not supplied to the petitioner at any stage before the order under Section 148A(b) of the Act was passed.
Court’s Decision: After considering the facts, circumstances, and submissions of both parties, the Calcutta High Court disposed of the writ petition. The court set aside the impugned order under Section 148A(d) of the Income Tax Act. It directed the petitioner to file a reply/response to the impugned order under Section 148A(d) of the Act, treating the allegations therein as a show cause notice. The petitioner was given a period of four weeks to file this response from the date of the court’s decision.
Furthermore, the court instructed the assessing officer to consider and dispose of the petitioner’s reply/response within eight weeks from the date of receiving it. The officer was directed to pass a reasoned and speaking order, providing an opportunity for the petitioner or their authorized representative to be heard during this process.
Conclusion: The Calcutta High Court’s decision in the case of “Krishan Kumar Gupta Vs ITO” underscores the importance of adhering to the principles of natural justice in Income Tax matters. In response to the alleged violation of these principles, the court set aside the Income Tax order for assessment year 2019-20. It also directed the petitioner to file a reply/response to the impugned order, treating it as a show cause notice, and instructed the assessing officer to consider and dispose of this response within the prescribed timeline, while providing an opportunity for the petitioner to be heard. This case serves as a reminder of the significance of due process and fairness in tax-related proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
The Court: Heard learned counsel appearing for the parties.
By this writ petition, petitioner has challenged the impugned order dated 14th April, 2023, under Section 148A(d) of the Income Tax Act, 1961, relating to assessment year 2019-20 on the ground of violation of principle of natural justice by contending that at the time of passing of the aforesaid impugned order under Section 148A(d) of the Act assessing officer has relied on statements and documents relating to cash, loan and transactions indicating in paragraph 7.3 of the impugned order which were never indicated and with regard to those transactions no show cause notices were issued and there are no indications in this regard in the annexure to the notice under Section 148A(b) of the Act.
Mr. Dutt, learned advocate appearing for the respondent is not in a position to deny the aforesaid allegation that the relevant material relating to transactions, at any stage before passing the order under Section 148A(b) of the Act were supplied and furnished to the petitioner to enable the petitioner to meet the same.
Considering the facts and circumstances of this case and submissions of the parties, this writ petition being WPO 1189 of 2023 is disposed of by setting aside the impugned order under Section 148A(d) of the Act and directing the petitioner to file reply/response to the aforesaid impugned order under Section 148A(d) of the Act by treating the allegations in the same as a show cause notice, within a period of four weeks from date and the assessing officer shall consider and dispose of the said reply/response to be filed within the time stipulated herein, in accordance with law and by passing a reasoned and speaking order and after giving opportunity of hearing to the petitioner or his authorised representative within eight weeks from the date of receipt of such reply/response.