A quasi-judicial order must be a speaking order that addresses objections raised, ensuring compliance with natural justice principles.

Order :

AVNEESH JHINGAN, J.

1. This petition is filed seeking quashing of order dated 26.03.2022 passed under Section 148 A(d) of the Income Tax Act, 1961 (for short ‘the Act’).

2. The brief facts are that the petitioner for Assessment Year 2015-16 did not file return as the petitioner was exempt under Section 10(23C) of the Act and the receipt during the year was less than one crore. On 16.03.2022, notice u/s 148A(b) of the Act was issued along with reasons for re-opening. The petitioner filed objections dated 22.03.2022. The objections were rejected vide impugned order. Hence, the present petition.

3. Learned counsel for the petitioner submits that the impugned order is a non-speaking order. The objections raised have not been dealt with in accordance with law. Reliance is placed upon decision of this court in R.K. Buildcreations Private Limited vs. Income Tax Officer reported in [{2024} 462 ITR 478 (Raj.)].

4. Learned counsel for the respondent defends the impugned order. Submission is that the order was passed after providing an opportunity of hearing to the petitioner.

5. Section 148-A of the Act prescribes the procedure to be followed for initiating proceedings u/s 148 of the Act. The assessee is to be supplied the information relied upon for initiating re-assessment and also outcome of the enquiry conducted, if any. Before deciding the issue as to whether it is a fit case to proceed u/s 148 of the Act, the petitioner is to be provided an opportunity of hearing by issuing notice specifying the date of not less than seven days but not exceeding thirty days. The order u/s 148A(d) is to be passed within one month from ending of the month when reply was filed and in case of non filing of reply within one month from expiry of the time given to file reply.

6. The department issued guidelines dated 01/08/2022 with regard to issuance of notice u/s 148 of the Act. Clause xi and xii deals with reply to be considered and order to be passed u/s 148 A (d) are quoted below:-

“xi. The AO has to consider the reply of assessee furnished, if any, in response to the show cause notice referred to in clause(b) of Section 148A before passing the order u/s 148A(d).

xii. The AO shall mandatorily pass a speaking order u/s 148A(d) in all cases with the 'prior approval of the specified authority' (Annexure-A2) for such order u/s. 148A(d), expect in the cases covered in Para 2.1(iii) above of these guidelines, irrespective of whether issuance of notice u/s 148 is being recommended or not. A template of such order u/s. 148A(d) is enclosed at Annexure-A3.”

7. As per the procedure prescribed u/s 148A of the Act and according to the guidelines, the reply filed by the petitioner has to be considered. The Assessing Officer is obligated to pass a speaking order. In other words, principles of natural justice have been specifically made part of the procedure.

8. It is trite law that a quasi judicial officer has to not only record reasons but also communicate it to the affected party and it also facilitates in judicial scrutiny of the order.

9. The impugned order is bereft of reasons. After reproducing the notices and reply filed by the petitioner, the operative part of the order is that the reply filed by the petitioner is not found tenable as assessee had not filed income tax return.

10. The objections raised by the petitioner interalia that u/s 10(23C) and the receipts were less than one crore was not considered. No reasons have been given for rejecting the objections. The impugned order is set aside. The matter is remitted back to the respondent to decide the matter in accordance with law after providing an opportunity of hearing.

11. The writ petition is allowed.