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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Ijm Dewas (mauritius) Ltd. – Appellant
Versus
Assistant Commissioner of Income Tax – Respondent
W.P.(C) 6294 of 2023
Decided On : 15-05-2023
Income Tax Act - Assessment Year 2019-20 - The court set aside the order passed under Section 148A(d) of the Act and lapsed the consequent notice under Section 148, giving the petitioner a fresh opportunity to respond to the notice dated 04.03.2023. The Assessing Officer was given liberty to pass a fresh order, and the petitioner was directed to file its response within four weeks of receipt of the judgment.
Fact of the Case:
The petitioner did not receive the notice dated 04.03.2023 issued under Section 148A(b) of the Income Tax Act, 1961, and the order dated 22.03.2023 was furnished by an employee of the group company.
Finding of the Court:
The court set aside the order passed under Section 148A(d) of the Act and lapsed the consequent notice under Section 148, giving the petitioner a fresh opportunity to respond to the notice dated 04.03.2023. The Assessing Officer was given liberty to pass a fresh order, and the petitioner was directed to file its response within four weeks of receipt of the judgment.
Issues: Non-receipt of notice under Section 148A(b) of the Income Tax Act, 1961, and the validity of the order dated 22.03.2023 passed under Section 148A(d) of the Act.
Ratio Decidendi: The court held that the petitioner should be given a fresh opportunity to respond to the notice dated 04.03.2023 and set aside the order passed under Section 148A(d) of the Act, lapsed the consequent notice under Section 148, and granted liberty to the Assessing Officer to pass a fresh order.
Final Decision: The order passed under Section 148A(d) of the Act was set aside, and the consequent notice under Section 148 was lapsed. The Assessing Officer was given liberty to pass a fresh order, and the petitioner was directed to file its response within four weeks of receipt of the judgment.
JUDGMENT
Rajiv Shakdher, J. (Oral)
CM APPL. 24725/2023
1. Allowed, subject to the petitioner filing legible copies of the annexures.
W.P.(C) 6294/2023 & CM APPL. 24724/2023 [Application filed on behalf of the petitioner seeking interim relief]
2. Issue notice.
3. Mr Zoheb Hossain, senior standing counsel accepts notice on behalf of the respondent/revenue.
4. In view of the directions that we propose to pass, Mr Hossain says that he does not wish to file a counter-affidavit in the matter at this stage, and that he will argue the matter based on the record presently available to the court.
4.1. The writ petition is, accordingly, taken up for final hearing and disposal, at this stage itself.
5. This writ petition concerns assessment year 2019-20.
6. The record shows that it is the principal grievance of the petitioner is that it did not receive the notice dated 04.03.2023 issued under Section 148A(b) of the Income Tax Act, 1961 [in short, "Act"]. The petitioner averse that no real-time alert was given to the it.
7. According to the petitioner, the order dated 22.03.2023 passed under Section 148A(d) of the Act was furnished by an employee of the group company, which is when the aforementioned notice and the order was downloaded by creating an account on the e-filing portal.
8. Given the possession, we put to Mr Hossain that without getting into the merits of the order, whether a fresh opportunity can be given to the petitioner to respond to the notice dated 04.03.2023 issued under Section 148A(b) of the Act.
8.1. Mr Hossain says that such an opportunity can be given.
9. Accordingly, the order dated 22.03.2023 passed under Section 148A(d) of the Act is set aside. Resultantly, the consequent notice under Section 148 of the Act which is also dated 22.03.2023 is lapsed.
10. The Assessing Officer (AO) is however given liberty to pass a fresh order.
10.1. In order to hasten the proceedings, the petitioner will file its response to the notice dated 04.03.2023 issued under Section 148A(b) of the Act, within four (4) weeks of receipt of a copy of the judgement.
10.2. Once the reply is received, the AO will issue notice which would indicate to the petitioner the date and time of hearing.
10.3. Needless to say, the AO will pass a speaking order.
11. Accordingly, the petition and the pending application(s) stands disposed of, in the aforesaid terms.
Compliance with procedural requirements and the right to a fair hearing are essential in proceedings under the Income Tax Act, 1961.
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 court emphasized the importance of correct premise, sharing of relevant information, and clear understanding of the provisions of the Income Tax Act, 1961 in reassessment proceedings.
The court established that failure to supply information required for assessment invalidates the reassessment notice, supporting due process in tax proceedings.
The Assessing Officer must provide adequate reasoning for reassessment actions and ensure compliance with natural justice principles.
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....
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.
The principle of consistency in reasons for reopening assessments is crucial in determining the sustainability of notices issued under the Income Tax Act.
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.
The central legal point established in the judgment is the requirement to adhere to principles of natural justice, including providing a hearing to the petitioner before passing orders under the Inco....
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