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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Vikas Mahajan, JJ.
Kuber Planters Limited – Appellant
Versus
National Faceless Assessment Centre & Ors. – Respondents
W.P.(C) 2382 of 2023 & CM Nos.9150-51 of 2023
Decided On : 24-02-2023
Approval - Reassessment Proceedings - The court directed the revenue to provide a copy of the order granting approval by the specified authority for initiating the reassessment proceedings against the petitioner.
Fact of the Case:
The writ petition challenged the commencement of reassessment proceedings without the approval of the specified authority, as provided in Section 151 of the Income Tax Act, 1961.
Finding of the Court:
The court directed the revenue to provide a copy of the approval order and restrained precipitate action against the petitioner until the document is furnished.
Issues: Commencement of reassessment proceedings without specified authority approval.
Ratio Decidendi: Reassessment proceedings must be initiated with the approval of the specified authority as per Section 151 of the Income Tax Act, 1961.
Final Decision: The court disposed of the writ petition with a direction to provide the copy of the approval order and restrained precipitate action against the petitioner until the document is furnished.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral)
CM No.9151/2023
1. Allowed, subject to just exceptions.
W.P.(C) 2382/2023 & CM No.9150/2023 [Application filed on behalf of the petitioner seeking interim relief]
2. Issue notice.
2.1. Mr Gaurav Gupta accepts notice on behalf of the respondents/revenue.
3. Mr Gupta says that in view of the directions that we intend to pass, no counter-affidavit is required to be filed at this stage. Therefore, with the consent of learned 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 27.03.2022 passed under Section 148A(d) and the consequential notice of even date, i.e., 27.03.2022 issued under Section 148 of the Income Tax Act, 1961 [in short, "Act"].
4.1. To be noted, the impugned order and notice concern Assessment Year (AY) 2018-19.
5. Ms Ekakshra Mahajan Mandhar, who appears on behalf of the petitioner, says that the principal grievance of the petitioner is that the reassessment proceedings have been commenced without the approval of the specified authority, as provided in Section 151 of the Act.
6. It is also Ms Mandhar's contention that several communications have been addressed to the concerned authority for providing copies of the approval. In this behalf, our attention has been drawn by Ms Mandhar to communications dated 20.11.2022, 05.12.2022 and 29.12.2022. [See pages 74, 78 and 88 of the case file].
7. Ms Mandhar says that once the copy of the approval granted by the specified authority is provided, the petitioner will take recourse to an appropriate remedy.
8. The writ petition is disposed of with a direction to the respondents/revenue to provide a copy of the order granting approval by the specified authority for initiating the reassessment proceedings against the petitioner.
8.1. The document will be furnished to the petitioner within the next two weeks.
9. Till such time the copy of the document is furnished, no precipitate action will be taken against the petitioner.
10. Parties will act, based on a digitally signed copy of the order passed today.
Reassessment proceedings must be initiated with the approval of the specified authority as per Section 151 of the Income Tax Act, 1961.
The Assessing Officer must provide adequate reasoning for reassessment actions and ensure compliance with natural justice principles.
The importance of factual accuracy in the Assessing Officer's assumptions and the requirement to grant a fair opportunity for a personal hearing influenced the court's decision.
The Assessing Officer must consider the petitioner's response and furnish the information/material before passing an order under Section 148 of the Income Tax Act.
Reassessment proceedings cannot be solely based on mere suspicion and must be supported by concrete evidence or material.
The court established that failure to supply information required for assessment invalidates the reassessment notice, supporting due process in tax proceedings.
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 ....
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.
Procedural fairness and consideration of petitioner's response in assessment proceedings under the Income Tax Act
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