Case Note & Summary
The petitioner, Meval Vipul Maniar, filed a writ petition under Article 226 of the Constitution of India before the Gujarat High Court challenging the Assessment Order dated 21.03.2023 passed under Section 147 read with Section 144B of the Income-tax Act, 1961, along with the Demand Notice under Section 156 of the Act. The brief facts are that on 10.10.2022 and 25.01.2023, the petitioner received notices under Section 142(1) of the Act from the National e-Assessment Centre, Delhi (respondent No.1) asking for details. On 15.03.2023, a show cause notice was issued proposing an addition of Rs.11,13,265/-, fixing the date of compliance as 18.03.2023, giving roughly two days' time. On 17.03.2023, the petitioner filed a letter requesting an adjournment for four days till 21.03.2023. However, on 19.03.2023, respondent No.1 closed the proceedings without considering the adjournment request. The petitioner filed two grievance applications on 20.03.2023 requesting to file submissions and for a personal hearing through video conferencing. On 21.03.2023, while resolving the grievance petitions, the department requested the petitioner to file relevant documents, but the assessment order was passed on the same day. The court considered the issue of whether the assessment order was vitiated due to violation of principles of natural justice. The petitioner argued that the show cause notice gave only two days' time, which was insufficient, and the adjournment request was not considered. The respondent contended that the petitioner had earlier been given time. The court held that the action of the respondent in not considering the adjournment request and closing proceedings on 19.03.2023 was in gross violation of principles of natural justice. The court quashed and set aside the assessment order and demand notice, directing the respondent to pass a fresh order after giving the petitioner a reasonable opportunity of being heard, including a personal hearing through video conferencing if requested. The petition was allowed.
Headnote
A) Constitutional Law - Natural Justice - Adequate Opportunity of Hearing - Income-tax Act, 1961, Sections 147, 144B, 142(1) - The petitioner was issued a show cause notice on 15.03.2023 fixing compliance date as 18.03.2023, giving only two days' time. The petitioner's adjournment request dated 17.03.2023 seeking time till 21.03.2023 was not considered, and proceedings were closed on 19.03.2023. The assessment order dated 21.03.2023 was passed without affording adequate opportunity. Held that the order is in gross violation of principles of natural justice and is quashed and set aside. (Paras 3-5) B) Income Tax - Reassessment - Show Cause Notice - Inadequate Time - Income-tax Act, 1961, Sections 147, 144B - The show cause notice gave only two days for compliance, which is insufficient. The authority closed proceedings without considering the adjournment request. Held that such action violates the right to be heard and renders the assessment order unsustainable. (Paras 3-5)
Issue of Consideration
Whether the assessment order passed under Section 147 read with Section 144B of the Income-tax Act, 1961 is vitiated due to violation of principles of natural justice when the petitioner was given only two days to respond to a show cause notice and his adjournment request was not considered before closing proceedings.
Final Decision
The court allowed the writ petition, quashing and setting aside the Assessment Order dated 21.03.2023 and the Demand Notice dated 21.03.2023. The respondent was directed to pass a fresh assessment order after giving the petitioner a reasonable opportunity of being heard, including a personal hearing through video conferencing if requested. Rule was made absolute.
Law Points
- Natural justice
- Adequate opportunity of hearing
- Reassessment under Section 147
- Show cause notice
- Adjournment request
- Grievance redressal
- Section 144B
- Section 142(1)
- Section 156
