Re-assessment Cases
SC to examine if personal hearing be given to assessee in reassessment cases
This story was originally published at 21:05 IST on 3 January 2025
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NEW DELHI – The Supreme Court on Friday issued a notice to Vazhakkulam Block Rural Co-operative Society Ltd. on the question of whether an opportunity for personal hearing should be granted to a party in an enquiry by the tax department for reassessment proceedings. In a petition by the income tax department, the apex court listed the case for hearing on Feb. 7.
The case has its genesis from Vazhakkulam Block Rural Co-operative Society challenging an order passed by the tax department under Section 148A(d) of the Income Tax Act, 1961 and the consequent notice. The notice was issued by the tax department proposing a reassessment of the income of the society for the assessment year 2019-20 (Apr-Mar).
The society said the tax department proceeded to pass a reassessment order without giving it an opportunity of being heard as mandated under Section 148A(b) of the Act. The order was vitiated on account of the non-compliance with the rules of natural justice, and consequently the notice too was vitiated in law, said the society.
The single-judge bench of Kerala High Court quashed the reassessment order and notices and directed the society to appear before the tax department. In its appeal to the division bench, the tax department said that the assessee is not required to be given an opportunity of personal hearing before passing an order under Section 148A(d) of the Act.
The division bench of the high court upheld the single judge's order by noting its previous ruling that Section 148A of the Act contemplates that the assessee should be granted an opportunity of being heard and that opportunity must include the right of personal hearing as well. Aggrieved by this, the income tax department moved the apex court. End
Reported by Surya Tripathi
Edited by Ashish Shirke
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