For the relevant assessment year, a notice under Section 148A(b) of the Income-tax Act was issued to which the assessee did not reply despite three adjournments being granted. Subsequently, the Assessing Officer (AO) passed the final assessment order under section 147.
The assessee filed a writ petition against the order passed under Section 148A(d) and the final assessment order contending to be a non-speaking order.
The High Court held that the assessee is partly to be blamed for not giving a reply to the show cause notice issued under Section 148A(b) despite three adjournments being granted. Nevertheless, while affirming the proposal in the show cause notice, the authorities are expected to record reasons, at least brief reasons, and if not brief, why the proposal in the show cause notice is to be confirmed despite the assessee submitting the reply.
The reading of the order gives an impression that on account of assessee’s default in not submitting the reply to the show cause notice, it was a fit case to issue notice under Section 148. However, even in ex parte proceedings, the authority has to record reasons for concluding why the case has been taken out to reopen the assessment.
Accordingly, the Court directed the proceedings to be re-done with the matter by giving the assessee a fresh opportunity to submit a reply to the show cause notice under Section 148A(b).
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