Case Note & Summary
The dispute arose from a petition filed under Article 226 of the Constitution of India by a partnership firm challenging an assessment order and penalty notice issued by the National E-Assessment Centre. The petitioner filed its return of income for the Assessment Year 2021-22 and received a notice for scrutiny assessment with less than two days to respond. Despite attempts to submit a reply, the petitioner faced technical issues with the online portal and communicated these issues to the respondent. The final assessment order was passed without considering the petitioner's reply or adjournment request. The petitioner argued that this constituted a gross violation of natural justice principles, specifically the right to a fair hearing. The respondent's counsel did not contest these submissions. The court noted that the petitioner was not given sufficient time to respond and emphasized the importance of the principle of audi alteram partem, which mandates that both sides must be heard before any decision is made. Consequently, the court quashed the assessment order and penalty notice, remanding the matter back to the assessing officer for a fresh assessment with proper consideration of the petitioner's response and an opportunity for a hearing. The court directed that this process be completed within 12 weeks from the receipt of the order (Paras 1-13).
Headnote
A) Taxation - Assessment Order - Violation of Natural Justice - Income Tax Act, 1961, Sections 143(3), 144B - The petitioner was not granted adequate time to respond to the show cause notice, violating the principles of natural justice. The court held that the assessment order was passed without a fair hearing and thus quashed the order, directing a fresh assessment to be conducted (Paras 9-11).
Issue of Consideration
Whether the assessment order was passed in violation of the principles of natural justice?
Final Decision
The court quashed the assessment order and penalty notice, remanding the matter for a fresh assessment with proper consideration of the petitioner's response and an opportunity for a hearing, to be completed within 12 weeks.
Law Points
- Natural justice
- fair hearing
- quashing of assessment order
- Income Tax Act
- 1961
