Opportunity Of Hearing Not Given To Assessee, Gujarat HC Sets Aside The Assessment Orders Passed

The Gujarat High Court bench comprising Justices N.V. Anjaria and Niral R. Mehta sets aside the assessment order levying heavy penalty on the assessee without giving him an opportunity of hearing. The high court was hearing a batch of petitions challenging those orders.

In the matter at hand the petitioner had been regularly assessed to tax by the Income Tax Office, Rajkot for the assessment year 2013-14 and the petitioner filed return of income. Thereafter the assessing officer passed an assessment order under section 153 C r/w Section 144 of the Income Tax Act, 1961. Thereafter orders were passed under Section 271 (1) (c) of the act levying penalty for the year under consideration.

It has been submitted on behalf of the petitioner that the assessment order as well as the orders of penalty were never served upon him and later the petitioner received an email from the income tac authorities with demand for assessment year 2021-22 raised in his case.

The petitioner has averred that when he opened the portal to check the demand for that year he came to know that assessment orders under section 153 C r/w Section 144 of the Income Tax Act, 1961 for the assessment year 2013-14 were passed. It has been submitted that these orders were passed against the petitioner without giving him an opportunity of a hearing.

The high court delved into Sections 153C and 144 of the Income Tax Act, 1961 and observed that they contemplate providing an opportunity to the assessee of being heard before making assessment. The court observed that here the undisputed fact is that no notice was served upon the petitioner assessee in respect of any assessment year nor any notice was served before the competent authority proceeded to pass penalty order under Section 271 (1) (c) of the act. The court said that the proper course here would be to remit back the cases to the assessing officer to be proceeded with from the stage of notice which shall be served upon the petitioner in each case.

In the light of the aforementioned, the court set aside orders passed against the assessee in respect of  assessment year 2013-14 in case of first captioned petition and in respect of other such years. The court further directed that the assessment officer shall undertake the exercise afresh of giving opportunity of hearing to petitioner within the period of three months from the date of receipt of this order.

CASE: MANISHKUMAR TULSIDAS KANERIYA V. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL 1, RAJKOT

SPECIAL CIVIL APPLICATION NO. 7614 OR 2022

Advocate For Petitioner: Darshan R. Patel

Advocate For Respondent:  Mr. Varun K. Patel