2023 (1) TMI 375 - HC - Income Tax

Validity of Assessment order framed u/s 143(3) r.w.s. 144B - opportunity to respond to the show-cause notice was not made available to the assessee - Violation of principles of natural justice - HELD THAT:- Section 144B(1)xvi (b) mandates to provide an opportunity to the assessee, in case any variation prejudicial to the interest of the assessee is proposed. It refers to serve a notice calling upon him to show-cause as to why the proposed variation should not be made. Section 144B (9) stipulates that an assessment made u/s. 143(3) or 144 shall be non est, if such assessment is not made in accordance with the procedure laid down under this section.

Therefore, in our opinion, in the case on hand as the opportunity to respond to the show-cause notice was not made available to the assessee particularly, when the huge variation/ addition was proposed to be made which is prejudicial to the interest of the assessee, it violates the principles of natural justice.

Resultantly, we allow the present petition and quash and set aside the order passed u/s. 143(3) r.w.s. 144B. The penalty proceedings and the demand notice are also quashed and set aside, however, we give liberty to the Assessing Officer to initiate the proceedings afresh from the stage of providing the opportunity to the petitioner of hearing if such request is made, and thereafter, to decide the matter.