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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Mask Consultants Pvt. Ltd. – Appellant
Versus
Income Tax Officer & Anr. – Respondents
W.P.(C) 6060 of 2023
Decided On : 10-05-2023
Notice - Income Tax Act - The court set aside the order issued under Section 148A(d) of the Income Tax Act as it was based on the inaccurate assumption that the petitioner had not filed a response to the notice issued under Section 148A(b). The court directed the Assessing Officer to pass a fresh order and grant a personal hearing to the petitioner's authorized representative.
Fact of the Case:
The writ petition concerned the challenge to the notice and order issued under Section 148A(b) and 148A(d) of the Income Tax Act for Assessment Year 2019-20. The petitioner argued that the impugned order was flawed as their response to the notice was not taken into account.
Finding of the Court:
The court found that the Assessing Officer had proceeded on the basis that the petitioner had not filed a response to the notice, which was factually inaccurate. As a result, the court set aside the order and directed the Assessing Officer to pass a fresh order and grant a personal hearing to the petitioner's authorized representative.
Issues: The issues revolved around the accuracy of the Assessing Officer's assumption regarding the petitioner's response to the notice and the subsequent order issued under Section 148A(d) of the Income Tax Act.
Ratio Decidendi: The court's decision was influenced by the factual inaccuracy in the Assessing Officer's assumption and the importance of granting the petitioner a fair opportunity for a personal hearing.
Final Decision: The writ petition was disposed of with the court setting aside the order and directing the Assessing Officer to pass a fresh order and grant a personal hearing to the petitioner's authorized representative.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral)
1. Issue notice.
2. Mr Gaurav Gupta, learned senior standing counsel, accepts notice on behalf of the respondents/revenue.
3. Mr. Gupta says, given the directions that we propose to pass, he does not wish to file a counter-affidavit in the matter and he will argue the matter based on the record presently available with the court. Therefore, with the consent of the counsels for 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 laid a challenge to the notice dated 20.03.2023 issued under Section 148A(b) of the Income Tax Act, 1961 [in short, "Act"]. Besides this, a challenge is also laid to the order dated 30.03.2023 passed under Section 148A(d) of the Act.
6. Mr Dinesh Mohan Sinha, who appears on behalf of the petitioner, says that the impugned order is flawed for the reason that, although the petitioner had filed a reply to the aforementioned notice issued under Section 148A(b) of the Act, the same was not taken into account.
6.1. For this purpose, our attention has been drawn by Mr Sinha to the reply dated 20.03.2023, which was uploaded on the designated portal on 28.03.2023. [See Annexure P3, appended on page 39 of the case file].
7. A perusal of paragraph 3 of the impugned order dated 30.03.2023 passed under Section 148A(d) of the Act shows that the Assessing Officer(AO) has proceeded on the basis that the petitioner has not filed a response to the notice issued under Section 148A(b) of the Act.
7.1. This is factually inaccurate.
8. Given this position, we are inclined to set aside the order. It is directed accordingly.
9. Liberty is, however, given to the Assessing Officer (AO) to pass a fresh order.
9.1. The AO will grant personal hearing to the authorized representative of the petitioner. For this purpose, the AO will issue a notice to the petitioner which would indicate the date and time of the hearing.
10. Resultantly, the consequential notice dated 30.03.2023 issued under Section 148 of the Act shall also stand dissolved.
11. The writ petition is disposed of in the aforesaid terms.
12. 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 Assessing Officer must provide adequate reasoning for reassessment actions and ensure compliance with natural justice principles.
A personal hearing is essential in tax assessment procedures to ensure administrative fairness; failure to provide one invalidates the assessment orders.
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 court established that failure to supply information required for assessment invalidates the reassessment notice, supporting due process in tax proceedings.
The denial of personal hearing sought by the petitioner constituted a breach of principles of natural justice, leading to the setting aside of the order and notice.
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 importance of timely assertion and the requirement for verification and personal hearing before passing an assessment order 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 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.
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