Assessment order set aside as SCN was sent to CA of assessee who did not inform

Assessment order set aside as show cause notice was sent to the chartered accountant of the assessee who neither informed regarding notice nor filed any reply. 

In a recent judgment, Karnataka High Court set aside the assessment order as the show cause notice was sent to the chartered accountant of the assessee who neither informed regarding the notice nor did he filed any reply.

ABCAUS Case Law Citation:
4574 (2025) (05) abcaus.in HC

In the instant case, the assessee had filed a Writ Petition challenging the assessment order passed under section 143(3) of the Income Tax Act, 1961 (the Act) and the consequential penalty order passed under section 270A of the Act.

It was submitted that pursuant to the notice issued under section 143(2) of the Act, the chartered accountant of the petitioner filed reply to the said notice on behalf of the petitioner.

Subsequently, The Assessing Officer (AO) issued a show-cause notice which was not received by petitioner and it was not aware of the notice since the said notices were sent to the chartered accountant of the petitioner. The said chartered accountant of the petitioner neither informed the petitioner regarding the notice nor did he filed any reply and consequently, petitioner could not submit its reply / response along with documents to the said notice. 

It was submitted that the inability and omission on the part of the petitioner to submit reply / response along with documents to the show-cause notice was due to bonafide reasons, unavoidable circumstances and sufficient cause and as such, if one more opportunity is provided to the petitioner to do so by setting aside the impugned orders and notices, the petitioner would do so and respondents may be directed to proceed further in accordance with law.

Per contra, the Revenue opposed the Petition and submitted that there was no merit in the petition and that the same is liable to be dismissed.

The Hon’ble High Court noted that perusal of the impugned order indicated that it was an undisputed fact that petitioner had not submitted reply/response along with documents to show-cause notice. 

Under these circumstances, in view of the specific assertion on the part of the petitioner that its inability and omission to submit reply along with documents to showcause notice was due to bonafide reasons, unavoidable circumstances and sufficient cause and if one more opportunity is granted, petitioner would submit reply along with documents, the Hon’ble High Court opined that it would be just and appropriate to set aside the impugned orders and subsequent notice / orders, etc., and remit the matter back to AO for reconsideration afresh from the stage of submitting of reply by the petitioner to show-cause notice and to proceed further in accordance with law.

As a result, the Petition was allowed and impugned notices/orders were set aside. The Matter was remitted back to AO for reconsideration afresh in accordance with law from the stage of submitting of reply to the Show Cause Notice.

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