Natural Justice: Punjab & Haryana High Court Sets Aside Re-Assessment Order Stating Reasonable Time Ought To Be Given To Respond To Show Cause

The Punjab and Haryana High Court has held that when a draft assessment order/show cause notice is issued to an assessee, reasonable time ought to be furnished to respond to the notice, so as to comply with the principles of natural justice.

Observing thus, a bench comprising Justice Tejinder Singh Dhindsa and Justice Pankaj Jain set aside the re-assessment order passed by the respondent authorities under Section 147 read with Section 144-B of the Income Tax Act 1961 on the very next day.

Significantly, the draft assessment order/show cause notice was issued on March 30 at 8pm and the assessee was called upon to furnish a reply on the same date itself i.e. by March 30, 11.59 PM. Further, the final order was passed on the next day, i.e., March 31.

The Court however granted liberty to the respondents to proceed afresh in the matter regarding framing of the re-assessment order de novo from the stage of issuance of the draft assessment order/show cause notice and to conclude proceedings within a period of four months after affording due and adequate opportunity to the assessee.

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