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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Praveen Bansal – Appellant
Versus
Income Tax Officer Ward 29-1 & Anr. – Respondents
W.P.(C) 6054 of 2023
Decided On : 10-05-2023
Income Tax Act - Assessment Year 2014-15 - The court directed the Assessing Officer to verify the petitioner's assertion before passing an assessment order and to accord a personal hearing to the petitioner.
Fact of the Case:
The petitioner challenged the order passed under Section 148A(d) of the Income Tax Act, 1961, as well as the notice issued under Section 148A(b) and Instruction No.1 of 2022 dated 11.05.2022, issued by the CBDT.
Finding of the Court:
The court disposed of the writ petition with a direction for the Assessing Officer to verify the petitioner's assertion before passing an assessment order and to accord a personal hearing to the petitioner.
Issues: The issues involved the challenge to the order passed under Section 148A(d) of the Income Tax Act, 1961, the notice issued under Section 148A(b), and Instruction No.1 of 2022 dated 11.05.2022, issued by the CBDT.
Ratio Decidendi: The petitioner's assertion was not taken in time, leading to the disposal of the writ petition with a direction for verification and personal hearing before passing an assessment order.
Final Decision: The writ petition was disposed of with a direction for the Assessing Officer to verify the petitioner's assertion before passing an assessment order and to accord a personal hearing to the petitioner.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral)
CM APPL. 23696/2023
1. Allowed, subject to just exceptions.
W.P.(C) 6054/2023 and CM APPL. 23695/2023 [Application filed on behalf of the petitioner seeking interim relief]
2. This writ petition concerns Assessment Year (AY) 2014-15.
3. The petitioner/assessee has assailed via the instant writ petition, the order dated 20.07.2022 passed under Section 148A(d) of the Income Tax Act, 1961 [in short, "Act"].
3.1 Besides this, challenge is also laid to the notice dated 29.05.2022 issued under Section 148A(b) of the Act.
3.2 In addition thereto, there is also a challenge laid to Instruction No.1 of 2022 dated 11.05.2022, issued by the CBDT.
4. Ms Ananya Kapoor, learned counsel, who appears on behalf of petitioner/assessee, fairly concedes that no response was submitted by the petitioner/assessee to the aforementioned notice issued under Section 148A(b) of the Act.
4.1 Ms. Kapoor's contention is that a reply was filed on 30.04.2023. In this context, Ms Kapoor draws our attention to Annexure P-16 appended on page 117 of the case file.
4.2 It is Ms Kapoor's contention that the Case Related Information Detail (CRID) furnished along with notice issued under Section 148A(b) of the Act, refers to the following transactions:
| Dayanand Singh | Rs.33,81,000/- |
| Lifeline Securities Ltd. | Rs.35,51,459/- |
| I. Venture Capital Pvt. Ltd. | Rs.3,20,000/- |
4.3 Ms. Kapoor says that a perusal of the reply filed by the petitioner/assessee, albeit after the impugned order was passed under Section 148A(d), would show that the petitioner/assessee has taken the stand that he did not enter into any transaction with Dayanand Singh, as alleged by the respondent/revenue, or at all. Ms Kapoor submits that if the amount alleged to have been transacted with Dayanand Singh, i.e., Rs. 33,81,000/- is taken out of the equation, the alleged escaped income would be below Rs.50 lakhs.
5. Unfortunately for the petitioner/assessee, this stand was not taken in time.
6. Given this position, the writ petition is disposed of, with a direction that before the Assessing Officer proceeds to pass an assessment order, he would verify the assertion made by the petitioner/assessee which is recorded in the reply, and in this context, also accord personal hearing to the petitioner/assessee and/or his authorised representative.
7. Consequently, pending application shall also stand closed.
The importance of timely assertion and the requirement for verification and personal hearing before passing an assessment order under the Income Tax Act.
The court emphasized the requirement to grant a minimum of seven days to respond to a notice under the Income Tax Act and the obligation to furnish material available with the Assessing Officer to th....
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.
Failure to grant a personal hearing by the Assessing Officer violates principles of natural justice, necessitating the annulment of the assessment order.
The Assessing Officer must provide adequate reasoning for reassessment actions and ensure compliance with natural justice principles.
Compliance with procedural requirements and the right to a fair hearing are essential in proceedings under the Income Tax Act, 1961.
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.
Administrative orders can be set aside by courts if found to be flawed in execution, ensuring rectification of inaccuracies in legal processes.
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