Demand notice quashed as due to absence of AO it did not precede any hearing as contemplated under Section 274 of the Act
ABCAUS Case Law Citation:
ABCAUS 2483 (2018) 08 HC
The instant petition was filed by assessee against the impugned demand notice issued by the Assessing Officer (AO) resulting from penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961 (the Act).
The petitioner was an income tax assessee who faced penalty proceedings under section 271(1)(c) of the Act. In response to the notice, the petitioner appeared on the allotted date. But the hearing could not be taken up because the Assessing Officer concerned was absent. Later, the Department issued the impugned demand notice, but without conducting any further hearing.
The petitioner contended that the demand notice violated the statutory mandate under Section 274 of the Act, i.e opportunity of hearing.
The Hon’ble High Court observed that the fact remained that the petitioner did appear in response to the Department’s notice, besides submitting the reply. The demand notice has not preceded any hearing, as contemplated under Section 274 of the Act and the Department had not denied that.
The Hon’ble High Court in the interest of justice set aside the demand notice and directed that the Income Tax Department shall put the petitioner on notice afresh and hear him before taking any further steps.