Keep taxpayers in the loop before you act: Court to Income Tax dept
Income Tax department is coming after them without informing them by an email or letter. They are clueless that the tax office has initiated action by simply posting the show-cause notice or summon on the department's e-portal. Such assesses who don't check the tax portal regularly — in fact, few do — may be in for shock and penalty. But how fair is this?
According to a recent High Court ruling, this is no way for tax authorities to deal with either individuals or corporations who are not expected to keep the e-portal open all the time to figure out what the taxman is up to.
Quashing a November 2022 show-cause notice against Munjal BCU Centre of Innovation and Entrepreneurship, The Punjab and Haryana High Court said «it is essential that before any action is taken, a communication of the notice must be in terms of the provisions» of the law that provides for a method and manner of service of notice and orders. «The provisions do not mention communication to be „presumed“ by placing notice on the e-portal,» said the order given a month ago.
«The principles of natural justice ensure fairness in any legal proceedings, including tax assessments. One key principle is „audi alteram partem“, which means „the other side must be heard“. If a taxpayer doesn't receive a notice about an assessment, penalty, or other action, it can cause hardship. They might miss deadlines or be unaware of their rights to respond. This can lead to increased burden on everyone involved, including the taxpayer, tax authorities, and potentially
