LERIC REECHES vs. INCOME TAX OFFICER

Heard Mr. R. V. Easwar, learned Senior Counsel for the petitioner assisted by Ms. Rubal Bansal, Prakhar Pandey, Sidharth A. Menon and Mr. Muhammed Aljuq A. and Mr. Christopher Abraham, learned Senior Standing Counsel for the Revenue.

The present writ petition has been filed impugning the assessment order dated 13.03.2024 passed under the provisions of Section 147 read with Section 144 and 144B of the Income Tax Act, 1961 for the assessment year 2016-17. 3. The learned Senior Counsel for the petitioner submits that he will confine his arguments only on the point of violation of the principles of natural justice and denial of effective hearing to the petitioner.

The petitioner, an assessee under the provisions of the Act, did not file return of his income for the assessment year 2016-17 under Section 139 of the Act.

The information available with the Department would suggest that the petitioner has sold an immovable property to M/s. Greenleaf Resorts Private Limited during the financial year 2015-16 relevant to the assessment year 2016-17. The Department was of the view that the capital gains earned by the petitioner in this transaction has escaped assessment for income tax under the provisions of the Act. Therefore, Show Cause Notice was issued to the petitioner and after fixing the hearing on 13.03.2023 and 24.03.2023, the petitioner filed reply to the Show Cause Notice and, thereafter order under Section 148A(d) of the Act was passed on 29.03.2023 for issuing notice under Section 148 of the Act. In response to the said notice, the petitioner filed return of his income for the assessment year in question. In the while, petitioner filed reply to the Show Cause Notice dated 22.12.2023 opted for personal hearing through video conferencing. The petitioner was provided the link, however, the petitioner could not join the link for technical failure on the part of the Department. To that effect, the petitioner had taken the screenshot which has been placed on record as Exhibit P-14 and also addressed e-mail regarding the issue that the petitioner could not log in to address the argument. However, despite this e-mail addressed to the Department, no WP(C) NO. 14409 OF 2024 4 further opportunity was given to the petitioner and the impugned order has been passed.

It is submitted by the learned Senior Counsel for the petitioner that the opportunity of hearing means ‘effective opportunity of hearing’ and that the petitioner could not log in to address the argument because of the technical failure in the website itself, there was no hearing at all. It is submitted that since there has been failure of compliance of the statutory provision of hearing as well as principles of natural justice as enshrined under Article 14 of the Constitution of India, the order suffers from inherent illegality and, therefore, it may be set aside.

Mr. Christopher Abraham, learned Senior Standing Counsel for the Revenue is not in a position to dispute the screenshot and the e- mail placed on record by the petitioner.

Considering the above submissions and taking note of the fact that the petitioner was not given effective hearing and without providing the effective hearing the impugned assessment order has been passed, I am of the considered view that the order suffers from violation of the principles of natural justice and, therefore, the same is set aside. The matter is remitted back to the 2nd respondent to provide fresh link to the petitioner intimating the date and time