Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Tara Vitasta Ganju, JJ.
Hindustan Gold Refiners & Mint Private Ltd. – Appellant
Versus
National Faceless Assessment Centre – Respondent
W.P.(C) 255 of 2023
Decided On : 10-01-2023
Income Tax Act - Assessment Order - The court set aside the impugned order and directed the Assessing Officer to carry out a fresh assessment exercise, taking into account the petitioner's reply filed via email. The court also ordered the Assessing Officer to grant a personal hearing to the authorized representative of the petitioner via video-conferencing.
Fact of the Case:
The petitioner filed a return for Assessment Year 2021-2022 and was issued various notices under the Income Tax Act. The impugned order was passed without considering the petitioner's reply filed via email.
Finding of the Court:
The court set aside the impugned order and directed the Assessing Officer to carry out a fresh assessment exercise, taking into account the petitioner's reply filed via email. The court also ordered a personal hearing for the petitioner's authorized representative.
Issues: Validity of the impugned order, consideration of petitioner's reply, procedural fairness
Ratio Decidendi: The Assessing Officer should consider the petitioner's response filed via email and conduct a fresh assessment exercise. Procedural fairness requires granting a personal hearing to the petitioner's authorized representative.
Final Decision: The impugned order was set aside, and the Assessing Officer was directed to conduct a fresh assessment exercise, considering the petitioner's reply. A personal hearing via video-conferencing was also ordered for the petitioner's authorized representative.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral)
CM APPL. 963/2023
1. Allowed, subject to the petitioner filing legible copies of the annexures, at least three days before the next date of hearing.
W.P.(C) 255/2023 and CM APPL. 962/2023 [Application filed on behalf of the petitioner seeking interim relief]
2. Issue notice.
2.1. Mr Ajit Sharma accepts notice on behalf of the respondents/revenue.
2.2. In view of the directions that we intend to pass and having regard to the record made available to the court, Mr Sharma says that counter-affidavit need not be filed.
3. Accordingly, with the consent of counsel for the parties, the writ petition is taken up for hearing and final disposal at this stage itself.
4. This writ petition is directed against the order dated 24.12.2022 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961 [in short, "the Act"].
4.1. In addition thereto, challenge is also laid to the notice of demand dated 24.12.2022 issued under Section 156 of the Act and the notice initiating penalty under Section 270A to 271AAC.
5. The record shows that the petitioner had filed a return concerning Assessment Year (AY) 2021-2022 on 14.01.2022.
6. On 27.06.2022, the petitioner was issued a letter intimating that assessment in accordance with the provisions of Section 144B of the Act had been completed.
7. Thereafter, on 28.06.2022 a notice under Section 143(2) of the Act was issued.
7.1. The aforesaid notice was followed by notice dated 29.09.2022 issued qua the petitioner under Section 142(1) of the Act. This notice was apparently replied to by the petitioner on 20.10.2022.
7.2. The respondents/revenue issued further notices under Section 142(1) of the Act on 10.11.2022 and 15.11.2022. These notices were replied by the petitioner on 12.11.2022 and 22.11.2022 respectively. As a matter of fact, two replies dated 22.11.2022 appear to have been filed by the petitioner.
8. According to the petitioner, the respondents/revenue proposed a variation in the income written by the petitioner via show cause notice dated 08.12.2022. The petitioner was, however, given time till 15.12.2022 to file a response to the said show cause notice.
9. The petitioner avers that on 15.12.2022, extension of time was sought to file a response till 18.12.2022.
10. Apparently, designated portal was closed on 15.12.2022, and therefore the petitioner could file the reply only on 16.12.2022, albeit via e-mail. The impugned order dated 24.12.2022 was passed without the Assessing Officer (AO) having benefit of the reply filed by the petitioner on 16.12.2022.
11. Given the fact that a short accommodation was sought by the petitioner on 15.12.2022, we are of the view that the AO ought to have given petitioner time till 18.12.2022 to submit a reply.
12. Notwithstanding the request made, the petitioner did file a reply on 16.12.2022 albeit via e-mail. Therefore, in fitness of things, we are of the view that impugned order should be set aside, with liberty to the AO to carry out a fresh exercise.
12.1. It is ordered accordingly.
13. The AO will carry out a de novo exercise from the stage at when show cause notice dated 08.12.2022 was positioned and frame an assessment order, after taking into account the reply dated 16.12.2022 filed by the petitioner.
13.1. Since Dr Rakesh Gupta, at this stage, says that the petitioner would want a personal hearing in the matter as well, the AO will accord opportunity to the authorized representative of the petitioner to be heard in-person.
13.2. The AO will issue a notice fixing the date and time.
13.3. The AO will grant hearing to the authorized representative of the petitioner via video-conferencing (VC).
14. The writ petition is disposed of in the aforesaid terms.
15. Needless to state, since we have not examined the matter on merits, nothing stated above will impact the merits of the case.
Procedural fairness and consideration of petitioner's response in assessment proceedings under the Income Tax Act
Breach of principles of natural justice in assessment proceedings under the Income Tax Act, 1961.
Failure to adhere to the directions in the Standard Operating Procedure (SOP) for Assessment Unit, which led to the quashing of the impugned notices and order.
Grant of personal hearing is a mandatory requirement under Section 144B(6)(vii) of the Income Tax Act, and failure to provide such a hearing can result in the setting aside of the assessment order.
A personal hearing is essential in tax assessment procedures to ensure administrative fairness; failure to provide one invalidates the assessment orders.
The failure to consider the petitioner's reply and grant a hearing led to the setting aside of the assessment order and the direction for a fair hearing and speaking order by the Assessing Officer.
Compliance with procedural requirements and the right to a fair hearing are essential in proceedings under the Income Tax Act, 1961.
Failure to inform the petitioner about the decision on their request for accommodation constituted a breach of principles of natural justice, warranting the setting aside of the assessment order and ....
Violation of principles of natural justice and failure to adhere to the timeline given in the notice led to the setting aside of the impugned assessment orders.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
