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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Premium Estates Private Limited – Appellant
Versus
Assistant Commissioner of Income Tax, Circle 19(1) Delhi & Anr. – Respondents
W.P.(C) 5650 of 2023 & CM Nos.22138-39 of 2023
Decided On : 02-05-2023
Income Tax Act - Assessment Year 2019-20 - The court set aside the impugned order and consequential notice issued under Section 148A(d) and 148 of the Act, directing the Assessing Officer to carry out the exercise de novo and accord personal hearing to the petitioner's authorized representative.
Fact of the Case:
The petitioner challenged the order passed under Section 148A(d) of the Income Tax Act, 1961, and a consequential notice issued under Section 148 of the Act for Assessment Year 2019-20, alleging that no notice was issued under Section 148A(b) and no real-time alert was issued via email as per Rule 127 of the Income Tax Rules, 1962.
Finding of the Court:
The court set aside the impugned order and consequential notice, directing the Assessing Officer to carry out the exercise de novo, require the petitioner to file a reply to the notice dated 10.03.2023 issued under Section 148A(b) of the Act, accord personal hearing to the petitioner's authorized representative, and pass a speaking order in accordance with the law.
Issues: Challenge to the order passed under Section 148A(d) and consequential notice issued under Section 148 of the Income Tax Act, 1961, alleging non-receipt of notice under Section 148A(b) and failure to issue a real-time alert via email as per Rule 127 of the Income Tax Rules, 1962.
Ratio Decidendi: The court found merit in the petitioner's grievance and set aside the impugned order and consequential notice, emphasizing the need for compliance with procedural requirements and the right to a fair hearing.
Final Decision: The writ petition was disposed of with directions for the Assessing Officer to carry out the exercise de novo, require the petitioner to file a reply to the notice dated 10.03.2023 issued under Section 148A(b) of the Act, accord personal hearing to the petitioner's authorized representative, and pass a speaking order in accordance with the law.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral)
CM No.22139/2023
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) 5650/2023 & CM No.22138/2023 [Application filed on behalf of the petitioner seeking interim relief]
2. Issue notice.
2.1 Ms Anuja Pethia, learned standing counsel, accepts notice on behalf of the respondents/revenue.
3. In view of the directions that we propose to pass, Ms Pethia says that she does not wish to file a counter-affidavit and will rely upon the record, as is presently available to the court. Therefore, with the consent of learned counsels for the parties, the writ petition is taken up for hearing and final disposal, at this stage itself.
4. This writ petition concerns Assessment Year (AY) 2019-20.
5. The petitioner has assailed the order dated 31.03.2023 passed under Section 148A(d) of the Income Tax Act, 1961 [in short, "Act"]. 5.1 Besides this, challenge is also laid to a consequential notice of even date, i.e., 31.03.2023 issued under Section 148 of the Act.
6. The principal grievance of the petitioner is that no notice was issued to the petitioner under Section 148A(b) of the 1961 Act.
7. Learned counsel for the petitioner says that the said notice under Section 148A(b) of the Act, which is dated 10.03.2023, was received by the petitioner only on the date when the order under Section 148A(d) of the 1961 Act was passed, i.e., 31.03.2023.
8. It is submitted by the learned counsel for the petitioner that no real time alert was issued via email, in terms of Rule 127 of the Income Tax Rules, 1962 [in short, "Rules"]. This assertion has been made by the petitioner in paragraph 2 of the writ petition.
9. Ms Pethia says that the best way forward in this case would be to set aside the impugned order with liberty to the Assessing Officer (AO) to carry out the exercise de novo.
10. Given this position, the impugned order dated 31.03.2023 passed under Section 148A(d) and the consequential notice of even date, i.e., 31.03.2023 issued under Section 148 of the Act are set aside.
11. The petitioner will file a reply to the notice dated 10.03.2023 issued under Section 148A(b) of the Act within three (3) weeks commencing from today.
12. The AO will accord personal hearing to the authorized representative of the petitioner. For this purpose, a notice shall be issued fixing the date and time of the hearing.
13. The AO will, thereafter, pass a speaking order in accordance with the law.
14. The writ petition is disposed of, in the aforesaid terms. Consequently, the pending application shall stand closed.
15. Parties will act based on the digitally signed copy of the order.
Compliance with procedural requirements and the right to a fair hearing are essential in proceedings under the Income Tax Act, 1961.
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 court emphasized the importance of providing a fresh opportunity to the petitioner to respond to the notice under Section 148A(b) of the Income Tax Act, 1961, and the requirement for the Assessin....
A personal hearing is essential in tax assessment procedures to ensure administrative fairness; failure to provide one invalidates the assessment orders.
The court established that failure to supply information required for assessment invalidates the reassessment notice, supporting due process in tax proceedings.
The court emphasized the importance of considering the petitioner's reply and according a personal hearing before passing an assessment order under the Income Tax Act, 1961.
The main legal point established is that the delay in issuance of a notice beyond the limitation period and the inchoate nature of a digitally signed notice can lead to the quashing of the notice and....
The Assessing Officer must provide adequate reasoning for reassessment actions and ensure compliance with natural justice principles.
Notices issued under the Income Tax Act must provide clear and specific information to the assessee, and vagueness or lack of clarity may lead to their quashing.
Procedural fairness and consideration of petitioner's response in assessment proceedings under the Income Tax Act
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