Reply to SCN issued Submitted before Passing Order: Kerala HC sets aside Order Passed u/s148 of Income Tax Act

The Kerala High Court has set aside an order passed under Section 148 of the Income Tax Act, 1961, due to the failure to consider the reply to the show cause notice (SCN) issued to the taxpayer. The court emphasized the importance of adhering to procedural fairness and ensuring that taxpayers’ responses to SCNs are duly considered before passing any orders. The case involved a taxpayer who had submitted a reply to the SCN, but the assessing officer proceeded to pass an order without taking the reply into account. The court ruled that this constituted a violation of the principles of natural justice, as the taxpayer was not given a fair opportunity to present their case. The decision underscores the necessity for tax authorities to follow due process and ensure that all relevant submissions by taxpayers are considered before making any determinations. This ruling reinforces the importance of procedural compliance in tax assessments.