HC set-aside order passed prior to expiry of notice period

Ramasamy Krishnamoorthy Vs ACIT (Madras High Court)

In the case of Ramasamy Krishnamoorthy Vs ACIT, the petitioner, an Income Tax assessee, received a notice dated 20.12.2019 for the Assessment year 2012-2013. The notice called for specific details to be furnished by 23.12.2019. However, the respondents proceeded to pass the impugned Assessment order on 21.12.2019, just two days prior to the expiry of the notice period. The petitioner challenges this order, alleging a violation of principles of natural justice.

The petitioner contends that the impugned Assessment order was passed hastily, without providing adequate time to respond to the notice. The court acknowledges the short notice period and agrees that the principles of natural justice were violated in this case. The impugned order was seemingly passed to prevent the assessment from lapsing without proper consideration of the petitioner’s reply.

In light of the violation of natural justice, the Madras High Court sets aside the impugned order and remits the case back to the respondent for a fresh assessment. The respondent is directed to pass a speaking order within 60 days from the date of receipt of the court’s order. The petitioner is granted 45 days to file a reply after the receipt of the order.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

1. The petitioner is an Income Tax assessee who had received notice dated 20.12.2019 for the Assessment year 2012-2013, whereby the petitioner was also called upon to produce the following details :-

It is seen from the details furnished, you are one of the directors of Chitrahar infrastructure. Hence, you are requested to produce the following details:

1. Details of real estate projects carried out by chitrahar infrastructure during earlier years and subsequent years.

2. For what purpose the amount was paid to chitrahar infrastructure.

3. Furnish any agreement to sale made to chitrahar infrastructure, for advance paid, if any

4. What steps you have taken to collect the debts before comes to bad debts.

The reply may be furnished on or before 23.12.2019.

2. The respondents proceeded to pass the impugned Assessment order dated 21.12.2019, whereby the demand proposed was confined in the impugned order. Aggrieved by the same, the petitioner has filed this writ petition stating that the impugned order has been passed in the gross violation of principles of natural justice, as the impugned order was came to be passed two days prior to the expiry of notice period. It appears that the impugned order has been passed with a view to ensure that the assessment does not get lapsed. The fact remains that the petitioner did not given adequate time to give a reply.

3. Considering the above, the impugned order is set aside and the case is remitted back to the respondent to pass a speaking order within a period of sixty days from the date of receipt of a copy of this order. The petitioner is directed to file a reply within a period of 45 days thereafter.

4. This writ petition is disposed of. No costs. Consequently, connected miscellaneous petition is closed.