2023 (3) TMI 523 - HC - Income Tax

Validity of Reopening of assessment u/s 147 - request to personal appearance through video conferencing not been considered - addition u/s 68 - HELD THAT - In the impugned assessment order no reasons have been given as to why the petitioner was not afforded personal hearing through Video Conferencing as requested by him through his communication dated 07.09.2021 to show that he had infact declared the sum in his balance sheet. This court is of the considered view that the respondents ought to have granted an opportunity of personal hearing to the petitioner through video conferencing as sought for by him in his communication dated 07.09.2021. Therefore this Court is of the considered view that the principles of natural justice have been violated by the respondents before passing the impugned assessment order - Decided in favour of assessee.

Summary

Issues:
Challenge to assessment order under section 147 of the Income Tax Act, 1961 for the assessment year 2013-14 on the ground of violation of principles of natural justice.

Analysis:
The petitioner challenged the assessment order dated 11.09.2021, passed under section 147 of the Income Tax Act, 1961, for the assessment year 2013-14, citing a violation of principles of natural justice. The petitioner had responded to the Show Cause Notice and requested a personal appearance through video conferencing, but this request was not considered before the assessment order was passed. The impugned assessment order added a sum of Rs.2,30,00,000/- as income of the petitioner under section 68 of the Income Tax Act, 1961, for the assessment year 2013-14, alleging non-disclosure in the Income Tax Return. However, the petitioner contended that the amount was indeed declared in the Income Tax Return and provided evidence from the balance sheet to support this claim.

The petitioner argued that the respondent did not consider the declaration in the balance sheet and passed the assessment order without granting the requested personal hearing through video conferencing. The court agreed that the principles of natural justice were violated by not affording the petitioner the opportunity for a personal hearing as requested. Consequently, the court quashed the assessment order dated 11.09.2021 and remanded the matter back to the first respondent for fresh consideration, emphasizing the need to adhere to the principles of natural justice and provide a personal hearing to the petitioner within a specified timeframe. The petitioner was granted permission to file a reply within one week, and the first respondent was directed to pass final orders within twelve weeks after the receipt of the court's order.

In conclusion, the writ petition was disposed of with the direction to quash the assessment order, remand the matter for fresh consideration, and ensure compliance with the principles of natural justice. No costs were awarded, and connected miscellaneous petitions were closed.