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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Pratyaksh Apparels Pvt. Ltd. – Appellant
Versus
Deputy Commissioner of Income Tax – Respondent
W.P.(C) 6818 of 2023 & CM Nos.26617-18 of 2023, W.P.(C) 6827 of 2023 & CM Nos.26747-48 of 2023, W.P.(C) 6828 of 2023 & CM Nos.26749-50 of 2023, W.P.(C) 6830 of 2023 & CM Nos.26756-57 of 2023, W.P.(C) 6832 of 2023 & CM Nos.26761-62 of 2023, W.P.(C) 6837 of 2023 & CM Nos.26773-74 of 2023 & W.P.(C) 6839 of 2023 & CM Nos.26775-76 of 2023
Decided On : 19-05-2023
Assessment Orders - Income Tax - Section 153C, Section 144, Section 142(1), Section 156 of the Income Tax Act, 1961 - The court set aside the impugned assessment orders and consequent demand notices due to a breach of principles of natural justice. The AO was expected to gather information for six assessment years within an impractical timeframe, leading to the decision to set aside the orders and collapse the demand notices. The AO was given liberty to carry out a fresh exercise from the stage when the notice under Section 142(1) was issued, with specific instructions for providing information and granting a personal hearing to the petitioner's authorized representative.
Fact of the Case:
The petitioner challenged six separate assessment orders and demand notices issued under the Income Tax Act, 1961, for different assessment years, alleging a breach of principles of natural justice due to impractical timeframes for compliance.
Finding of the Court:
The court found that the AO had put the petitioner on an extremely tight leash, expecting them to gather information for six assessment years within an impractical timeframe, which was not in line with the principles of natural justice.
Issues: The main issue was the breach of principles of natural justice due to the impractical timeframes set by the AO for compliance with assessment notices.
Ratio Decidendi: The court's decision was influenced by the breach of principles of natural justice and the impractical timeframes set by the AO, leading to the setting aside of the assessment orders and collapse of the demand notices.
Final Decision: The court set aside the assessment orders and consequent demand notices, giving the AO liberty to carry out a fresh exercise from the stage when the notice under Section 142(1) was issued, with specific instructions for providing information and granting a personal hearing to the petitioner's authorized representative.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral)
CM No.26617/2023 in W.P.(C) 6818/2023
CM No.26747/2023 in W.P.(C) 6827/2023
CM No.26749/2023 in W.P.(C) 6828/2023
CM No.26756/2023 in W.P.(C) 6830/2023
CM No.26761/2023 in W.P.(C) 6832/2023
CM No.26773/2023 in W.P.(C) 6837/2023
CM No.26775/2023 in W.P.(C) 6839/2023
1. Allowed, subject to just exceptions.
W.P.(C) 6818/2023 & CM No.26618/2023
W.P.(C) 6827/2023 & CM No.26748/2023
W.P.(C) 6828/2023 & CM No.26750/2023
W.P.(C) 6830/2023 & CM No.26757/2023
W.P.(C) 6832/2023 & CM No.26762/2023
W.P.(C) 6837/2023 & CM No.26774/2023
W.P.(C) 6839/2023 & CM No.26776/2023 [Applications filed on behalf of the petitioner seeking interim relief]
2. Issue notice.
2.1. Mr Gaurav Gupta, learned senior standing counsel accepts notice on behalf of the respondents/revenue.
3. Given the order that we propose to pass, Mr Gupta says that counter- affidavit(s) need not be filed, and he will argue the above-captioned writ petitions, based on the record presently available to the Court.
3.1. Thus, with the consent of learned counsel for the parties, these writ petitions are taken up for hearing and final disposal at this stage itself.
4. These writ petitions concern Assessment Year (AY) 2017-18 [W.P.(C) No.6818/2023]; AY 2013-14 [W.P.(C)No.6827/2023]; AY 2016- 17 [W.P.(C)No.6828/2023]; AY 2015-16 [W.P.(C)No.6830/2023]; AY 2018-19 [W.P.(C)No.6832/2023]; AY 2019-20 [W.P.(C)No.6837/2023] and AY 2014-15 [W.P.(C)No.6839/2023].
5. The petitioner in these writ petitions has laid a challenge to six separate assessment orders of even date i.e., 28.03.2023 passed under Section 153C read with Section 144 of the Income Tax Act, 1961 [in short, "Act"].
6. The short ground on which the petitioner seeks to assail the aforementioned assessment orders and the consequent six demand notices of even date i.e., 28.03.2023 issued under Section 156 of the Act is, that there has been a breach of principles of natural justice.
7. The record shows, that in each of the abovementioned cases, the petitioner was issued six separate notices of even date, i.e., 14.03.2023 under Section 153C of the Act.
7.1. Via these notices, the petitioner was given leave to file its return of income within 30 days. The said notices were followed by another set of notices, which were also six in number. These notices were dated 20.03.2023 and were issued under Section 142(1) of the Act. Via these notices, the petitioner was required to file the relevant documents/information within two days i.e., by 22.03.2023.
7.2. In view of the fact that the period accorded to the petitioner was extremely short, the petitioner had asked for 30 days to respond to the said notice.
7.3. In this context, the petitioner drew the Assessing Officer's (AO) attention to the fact, that via notice dated 14.03.2023, 30 days' time had been granted to file the return.
8. Unfortunately for the petitioner, the AO passed the impugned assessment orders dated 28.03.2023, without granting the time sought for by the petitioner.
9. Although representations were made thereafter by the petitioner for each of the assessment years on 12.04.2023, requesting the respondent to refrain from initiating penalty proceedings, there has been no movement in the matter.
10. Given this position, we are of the view, that the AO had put the petitioner on an extremely tight leash. The AO expected the petitioner to gather information for six AYs within two days, which by any yardstick was not a practical timeframe.
10.1. This is especially so, as the AO, while issuing notice under Section 153C of the Act, had granted 30 days to the petitioner to file the return of income concerning the AYs in issue.
11. Thus, for the foregoing reasons, we are inclined to set aside the impugned assessment orders.
12. It is ordered accordingly.
13. Given this position, the consequent demand notices issued under Section 156 of the Act would also collapse.
14. Liberty is, however, given to the A
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