In a case, the Kerala High Court set aside the assessment order under the Income Tax Act, 1961 which was passed without considering the reply of the asseseee to the assessment Notice.
Mallisseri Neelakandan Sankaranunni Namboodiri, the petitioner challenged the judgment of the Single Judge that dismissed the writ petition preferred by the appellant impugning an order of assessment passed by the respondent on the ground that it was passed without hearing the appellant and without considering the reply that the appellant had preferred to the pre-assessment notice.
The appellant, who is an agriculturist and an assessee under the Income Tax Act [‘IT Act’], had filed returns for the assessment year 2020-21 under the IT Act. The returns were subjected to scrutiny by the respondent, who issued a notice seeking the objection of the appellant to the proposed assessment.
The appellant responded only to the last notice and without considering the said reply, which was admittedly received by the Office of the respondent before the passing of the assessment order, the respondent proceeded to pass an assessment order.
It was alleged that as the reply of the appellant had been received by the respondent before he passed an assessment order, the respondent ought to have considered the said reply also while passing the order that was impugned in the writ petition.
The Single Judge, who considered the matter, found that it was on account of the fault on the part of the appellant that the assessment order came to be passed without considering the reply of the appellant, and hence, there was no necessity to interfere with the order passed by the respondent. The appellant was therefore relegated to his alternate remedy of preferring an appeal against the said assessment order.
Sri. Harisankar V. Menon, the counsel appeared for the appellant and Sri. Navaneeth N. Nath, the Standing counsel appeared for the respondent.
It was observed that since the respondent had received the reply to the pre-assessment notice, albeit, after a delay in sending the same, it was not proper or fair on the part of the respondent to have proceeded to pass the assessment order without considering the said reply.
The respondent is obliged to mete out fairness to the assessees, and in a situation such as the present, where the reply of the assessee had been received in the Office of the respondent, we would think that the requirement of fairness mandated that the Assessing Authority refer to the said reply also, and deal with the contentions therein while passing the assessment order.
By setting aside the impugned judgment of the Single Judge and the assessment order that was impugned in the writ petition, the division bench comprising Dr. Justice A.K. Jayasankaran Nambiar & Dr. Justice Kauser Edappagath allowed the appeal.
The Court directed that the appellant appear for a personal hearing through video conference before the respondent on 16.10.2023, to enable the respondent to pass a fresh assessment order, after hearing the appellant and considering the reply furnished by the appellant.
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