In CWP-9810-2022(O&M)-PUNJ HC-P&H HC sets aside re-assessment order where assessee was given few hours to reply to show cause notice, says assessee ought to have been given reasonable time to respond so as to comply with principles of natural justice Justices Tejinder Singh Dhindsa & Pankaj Jain [25-05-2022]

Read Order: Mukesh Mittal v. National Faceless Assessment Centre and Others 

Monika Rahar

Chandigarh, May 31, 2022: While dealing with a petition assailing re-assessment order passed under Section 147 read with Section 144-B of the Income Tax Act 1961 by the respondent authorities against the petitioner-assessee, for his failure to reply to a draft assessment order/show cause notice issued one day before passing the order, the Punjab and Haryana High Court has held the assessee ought to have been furnished a reasonable time to respond so as to comply with the principles of natural justice. 

Setting aside the impugned order, the Bench of Justices Tejinder Singh Dhindsa and Pankaj Jain granted liberty to the respondents to to proceed afresh in the matter as regards framing of re-assessment order de novo from the stage of issuance of the draft assessment order/show cause. The Bench added, “The same would also be consonance with a fair and transparent procedure.”

The instant writ petition was directed against the re-assessment order (dated March 31, 2022) passed under Section 147 read with Section 144-B of the Income Tax Act 1961. 

In the writ petition one of the primary grounds of challenge raised was that the impugned order was passed in undue haste and in negation of the principles of natural justice. 

The specific averments in such regard were to the effect that the draft assessment order/show cause notice (dated March 30, 2022) was issued to the petitioner at 20.42 P.M. calling upon the assessee to furnish a reply on the same date itself i.e. March 30, 2022 by 23.59 P.M. and the final order was passed on the next day i.e. March 31, 2022.

Considering the above factual narration as also the affording the standing counsel for the respondents an opportunity of being heard, the Court opined that there would be no gainsaying the assessee ought to have been furnished a reasonable time to respond to the draft assessment order/show cause notice so as to comply with the principles of natural justice. The same would also be consonance with a fair and transparent procedure, the Bench added. 

Liberty was granted to the respondents to proceed afresh in the matter as regards framing of re-assessment order de novo from the stage of issuance of the draft assessment order/show cause notice of March 30, 2022 and to conclude proceedings in a time bound manner after affording due and adequate opportunity to the assessee.

“At the cost of repetition, it is clarified that the impugned reassessment order dated 31.03.2022… has been set aside only on the ground that due opportunity had not been afforded to the assessee to respond to the draft assessment order/show cause notice dated 30.03.2022 and this Court has not delved into the merits of the case”, the Court held.