Case Note & Summary
The petitioner, an assessee, was issued a notice under Section 148-A(b) of the Income Tax Act, 1961 on 29.05.2022, alleging failure to disclose total credits of Rs.3,48,29,506/- during the financial year 2015-2016 relevant to assessment year 2016-2017, deposited in a bank account with M/s. Shri Renukamata Multi State Urban Co-operative Credit Society Limited. The notice granted 14 days to reply. The petitioner tendered a reply on 14.06.2022, which was uploaded on 15.06.2022, beyond the 14-day period. However, the authority passed an order under Section 148-A(d) on 27.07.2022 without considering the reply, despite the reply being on record before the order was passed. The petitioner challenged this order by way of a writ petition. The High Court noted that the short issue was whether the Income Tax Department could refuse to consider a belated reply when it was submitted before the order was passed. The court referred to the Supreme Court judgment in Union of India and Others v. Ashish Agarwal (Civil Appeal No.3005/2022), which directed that assessees be given two weeks to reply after receiving information. The court observed that Section 148-A(b) requires an opportunity of hearing of not less than seven days and not exceeding thirty days, with power to extend time. Since the reply was already before the authority when the order was passed, the authority ought to have considered it. The court held that the failure to consider the reply violated principles of natural justice. The impugned order was quashed and set aside, and the matter was remanded to the Assessing Officer to decide afresh after considering the petitioner's reply and providing an opportunity of hearing. The writ petition was allowed.
Headnote
A) Income Tax - Reassessment - Section 148-A(b) and 148-A(d) of the Income Tax Act, 1961 - Opportunity of Hearing - The assessee was issued a notice under Section 148-A(b) on 29.05.2022, granting 14 days to reply. The assessee tendered a reply on 14.06.2022, uploaded on 15.06.2022, which was beyond the 14-day period but before the order under Section 148-A(d) was passed on 27.07.2022. The authority passed the order without considering the reply. The High Court held that since the reply was already before the authority when the order was passed, the authority ought to have considered it. The failure to do so violated principles of natural justice. The order was quashed and the matter remanded for fresh consideration after hearing the assessee. (Paras 2-7)
Issue of Consideration
Whether the Income Tax Department can refuse to consider a reply tendered belatedly to a notice under Section 148-A(b) of the Income Tax Act, 1961, when the reply was submitted before the order under Section 148-A(d) was passed.
Final Decision
The impugned order dated 27.07.2022 passed under Section 148-A(d) of the Income Tax Act, 1961 is quashed and set aside. The matter is remanded to the Assessing Officer to decide afresh after considering the petitioner's reply dated 14.06.2022 and after providing an opportunity of hearing to the petitioner. The writ petition is allowed. Rule is made absolute in the above terms.
Law Points
- Natural justice
- opportunity of hearing
- belated reply
- Section 148-A(b) Income Tax Act
- 1961
- Section 148-A(d) Income Tax Act
