Case Law Details
Biju Paul Vs ACIT (Madras High Court)
Introduction: In a recent judgment, the Kerala High Court ruled in the case of Biju Paul vs ACIT, highlighting a critical aspect of tax assessment procedures – the principle of natural justice. The petitioner, an assessee under the Income Tax Act, challenged the validity of the show-cause notice and subsequent assessment order, emphasizing the denial of an opportunity for a personal hearing.
Detailed Analysis: The crux of the matter revolves around the assessment year 2015-16. The petitioner failed to file the return for this assessment year, prompting the authorities to reopen the case under Section 147 of the Income Tax Act. The assessment order, dated 29.03.2022, noted a notice under Section 148 issued on 30.03.2021, instructing the petitioner to file the income return within 30 days. However, the petitioner did not comply.
Subsequently, three notices under Section 142(1) were issued on 11.11.2021, 21.12.2021, and 12.03.2022. In response to the last notice, the petitioner requested a personal hearing, communicated via email on 21.03.2022. Unfortunately, the petitioner was not granted a personal hearing, and the time granted for compliance was only three days, raising concerns about the sufficiency of the opportunity provided.
Recognizing a breach of the principle of natural justice, specifically the denial of a personal hearing and inadequate time for compliance, the court set aside the assessment order. The court deemed it appropriate to remand the matter back to the National Faceless Assessment Centre, New Delhi, directing them to provide the petitioner with a fair opportunity to be heard before finalizing the fresh assessment order.
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