Income Tax Authorities Must Consider Genuine Extension Requests: Madras HC Sets aside Order Passed Without Hearing [Read Order]

The Madras High Court has set aside an income tax assessment order passed by the Tax Authorities after finding that the assessee’s genuine request for additional time to file a reply was not properly considered.

In this case, the petitioner, Manoj Kiron Kumar Lulla received a show cause notice on February 16, 2025, with a deadline to respond by February 21, 2025. However, the petitioner’s Authorized Representative was hospitalized, making it difficult to gather all necessary documents.

The petitioner immediately requested an extension until March 8, 2025, but the department only granted time up to February 27, 2025. When the petitioner again sought an extension, the authorities scheduled a personal hearing for March 3, 2025, giving just one day’s notice.

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Due to the continued ill-health of their representative, the petitioner could not attend the hearing and requested another adjournment, which was not granted. The department proceeded to pass the assessment order on March 10, 2025, without giving further time or a proper opportunity for a hearing.

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Justice Krishnan Ramasamyobserved that, “Normally, when an Assessee requests for time extension to file their reply, the respondents are supposed to have duly considered the said request and granted sufficient time to the petitioner.”

It noted that, in this situation, the petitioner’s reason for seeking an extension was that the ill-health of their AuthorizedRepresentative was found to be reasonable. The bench criticized the department for not accommodating the request and for passing the order without allowing the petitioner to present their case fully.

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Under the cover of the principles of natural justice, the Madras High Court held that the order was passed without giving the petitioner a fair chance to file their reply or to be heard in person. As a result, the Court set aside the assessment order and directed the authorities to reconsider the matter.

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The bench criticized the department for not accommodating the request and for passing the order without allowing the petitioner to present their case fully.