Case Law Details
Bahuleyan Nair Vs DCIT (Kerala High Court)
The Kerala High Court has delivered a significant judgment in the case of Bahuleyan Nair vs. DCIT, concerning the issuance of a notice and order under Section 148A of the Income Tax Act, 1961. The petitioner, a Non-Resident Indian (NRI) conducting business in Sharjah (UAE), challenged the legality of Ext. P3 Order and Ext. P4 Notice, primarily on the grounds that the petitioner was not afforded a reasonable opportunity to be heard.
Background
The petitioner received a notice dated 07.03.2023 under Section 148A (b) of the Income Tax Act. This notice required the petitioner to explain why, given the annexure enclosed with the notice, a notice under Section 148 of the Income Tax Act should not be issued. The petitioner responded to this notice, raising various objections, including the contention that the show cause notice was not maintainable as per Section 149 of the Income Tax Act. Section 149 specifies that a notice can only be issued if entries in the books of accounts that have escaped assessment exceed Rs. 50,00,000/- (Rupees Fifty Lakhs only).
However, the petitioner was not given the opportunity for an in-person hearing, and without considering the petitioner’s reply, Ext. P3 Order and Ext. P4 Notice were issued. Section 148A (b) of the Income Tax Act expressly provides for the opportunity of being heard through the service of a notice to the assessee. The absence of such an opportunity rendered the issued order and notice unsustainable.
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