The Kerala High Court set-aside an order in reassessment proceedings, determining that it was issued without giving the assessee a chance to respond to the show cause notice.

The Bench of Justice Gopinath P. observed that “the show cause notice was issued on 12-03-2024, giving only three days' time to the assessee to respond, and the order was issued on 20-03-2024……… one final opportunity can be given to the assessee to respond to the show cause notice”.

The petitioner contends that a show-cause notice was issued on March 12, 2024, requiring a response by March 15, 2024. However, the order was passed on March 20, 2024, before the petitioner had the opportunity to reply. The petitioner argues that this reflects undue haste on the part of the Assessing Authority, suggesting that the issue was not adequately considered. As a result, the petitioner has challenged the reassessment order for the assessment year 2018-2019 before the Kerala High Court.

The Income Tax Department argued that the show-cause notice in question was not the first issued to the assessee but was, in fact, the final notice. They contended that the assessee had been granted several opportunities previously and asserted that the order was not issued in haste or without consideration of the reply filed by the assessee.

The bench observed that “while the Income Tax Department may be right in contending that the show cause notice was not the first opportunity given to the assessee and several earlier opportunities have been given to the assessee, it remains the fact that show cause notice was issued on 12-03-2024, giving only three days' time to the assessee to respond, and the order was issued on 20-03-2024…….”

While the bench noted that the order cannot be deemed hasty given the previous opportunities afforded to the assessee, it concluded that one final opportunity should be granted to the assessee to respond to the show-cause notice.

In light of the above, the bench annulled the reassessment order and instructed the Assessing Authority to complete the assessment after granting the assessee one final opportunity to respond to the show-cause notice, along with an opportunity for a hearing.

Counsel for Petitioner/ Assessee: K. Krishna and Achyuth Menon

Counsel for Respondent/ Department: P.G. Jayashankar and G. Keerthivas

Case Title: Thottungal Padmanabha Das Sujith v. The Additional/Joint/Deputy/Assistant Commissioner Of Income Tax/Income Tax Officer, Assistant

Case Number: WP(C) NO. 22380 OF 2024