The Court upheld the violation of natural justice in income tax assessment procedures, invalidating the assessment order due to improper acknowledgment of the petitioner's adjournment request.

JUDGMENT

The petitioner, an assessee under the provisions of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’ for short), has filed the captioned writ petition seeking to challenge Ext.P13 assessment order for the assessment year 2014-15 relevant to the financial year 2013-14, issued by the 1^st respondent herein, essentially on the ground of violation of the principles of natural justice.

2. Sri.A. Kumar, learned Senior Counsel, instructed by Smt.G. Mini, learned counsel for the petitioner, points out that in response to the show cause notice received by the assessee at Ext.P8, the petitioner sought for an adjournment till 20.05.2023 as evidenced by the screenshot at Ext.P9. He would further point out that a perusal of Ext.P9 would show that, though such an application for adjournment was filed, the status was shown as “open” and therefore with reference to the request, on 15.05.2023, Ext.P10 reply was filed at 9.18 a.m. Along with the reply, some additional documents in response to the show cause notice were also uploaded as evidenced by Exts.P11 and P12 acknowledgments. Therefore, the final completion of assessment by Ext.P13 on 15.05.2023, as if the petitioner did not respond to the Ext.P8 show cause notice is incorrect, is the submission.

3. Per contra, Sri.Jose Joseph, the learned Standing Counsel for the revenue, would rely on the detailed statement filed, as also the screenshot of the “worklist” of the assessing authority produced as Annx.R3(A) to point out that there is no evidence as regards the receipt of adjournment at Ext.P9. Therefore, it is his submission that since there was no response from the side of the petitioner, the assessment team had no other go than to prepare the draft order and to get it approved by the higher authority 4. I have considered the rival submissions as well as the connected records.

5. The assessment has been initiated essentially with reference to the provisions of Section 69 of the Act, with reference to unexplained investments. The tax liability with reference to such an assessment is on the higher side when compared to the regular assessment. It is with reference to the afore statutory provision that the allegation raised in this writ petition requires to be considered.

6. As already noticed, in response to the show cause notice at Ext.P8, the petitioner has filed a request for adjournment on 03.05.2023. A perusal of Ext.P9 would show that the request for adjournment was acknowledged and the status was “open”. The stand taken by the learned Standing Counsel with reference to the “work list” of assessment team does not go in tandem with the adjournment details available at Ext.P9. In such circumstances, the ultimate finding at Ext.P13 assessment order that the petitioner did not respond to the show cause notice is incorrect. Furthermore, as already noticed on 15.05.2013 itself at 9.18 a.m., the petitioner responded to the show cause notice as evidenced by Ext.P10. In other words, the assessment team had benefit of going through the details produced along with the reply at Ext.P10, at the time when it issued the assessment order.

7. To that extend, I am of the opinion that there is violation of principles of natural justice, as contended by the petitioner. Therefore, in my opinion, the petitioner is entitled to succeed.

In such circumstances, this writ petition would stand allowed, setting aside Ext.P13 assessment order. There will be a direction to the 1^st respondent to consider Ext.P10 reply with the additional documents, filed by the petitioner to Ext.P2 intimation, and pass fresh orders in tune with the provisions of the statute as expeditious