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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Jagannath Haldar Through The Power of Attorney Holder – Appellant
Versus
Prinicpal Chief Commissioner of Income Tax, International Taxation, New Delhi & Ors. – Respondents
W.P.(C) 8204 of 2023
Decided On : 02-06-2023
Natural Justice - Income Tax Act - The court set aside the impugned order passed under Section 148A(d) of the Income Tax Act due to a breach of principles of natural justice. The Assessing Officer was directed to pass a fresh order after according a personal hearing to the petitioner and taking into account the petitioner's reply.
Fact of the Case:
The petitioner sought writ, order, or directions to quash the impugned orders passed under the Income Tax Act, alleging a breach of principles of natural justice.
Finding of the Court:
The court set aside the impugned order and directed the Assessing Officer to pass a fresh order after according a personal hearing to the petitioner and taking into account the petitioner's reply.
Issues: Breach of principles of natural justice, validity of impugned orders under the Income Tax Act.
Ratio Decidendi: The court emphasized the importance of principles of natural justice and directed the Assessing Officer to ensure a fair process and consider the petitioner's reply before passing any order.
Final Decision: The impugned order passed under Section 148A(d) of the Income Tax Act was set aside, and the Assessing Officer was directed to pass a fresh order after according a personal hearing to the petitioner and taking into account the petitioner's reply.
JUDGMENT
Rajiv Shakdher, J. (Oral)
CM APPL. 31483/2023
1. Allowed, subject to just exceptions.
W.P.(C) 8204/2023 & CM APPL. 31482/2023[Application filed on behalf of the petitioner seeking interim relief].
2. Issue notice.
2.1. Mr Prashant Meherchandani, learned senior standing counsel accepts notice on behalf of the respondents/revenue.
3. The substantial prayers made in the writ petition read as follows:
(i) issue writ, order or directions in the nature of certiorari, quashing and setting aside the impugned DIN & Order No. ITBA/AST/F/148A (SCN) 2022-23/1051375040(1) dated 27.03.2023 passed under Section 148A(d) of the Income Tax Act 1961;
(ii) issue writ in the nature of prohibition commanding Respondents to forbear from giving effect to and/or taking any step whatsoever pursuant to and/or in furtherance of the impugned DIN & Order No. ITBA/AST/F/148A (SCN) 2022-23/1051375040(1) dated 27.03.2023 passed under Section 148A(d) of the Income Tax Act 1961 and/or in any proceedings initiated thereunder for the Assessment Year 2016-17;
(iii) issue appropriate writ, order or direction, setting aside impugned Notice under Section 148 of the Income Tax Act 1961 dated 27.03.2023 being DIN & Notice No. ITBA/AST/S/148_l/2022-23/1051379517(1) issued as a consequence of prayer (a) above by declaring the said Notice to have been issued without jurisdiction;
4. Ms Pankhuri Shrivastava, learned counsel for the petitioner says, that there has been a breach of principles of natural justice, inasmuch as the petitioner's reply was not taken into account by the Assessing Officer (AO) while passing the order dated 27.03.2023 under Section 148A(d) of the Income Tax Act, 1961 [in short, "the Act"].
5. In the course of hearing, counsel for the petitioner has, in fact, also placed before us, a hard copy of the e-mail dated 14.03.2023.
6. Mr Prashant Meherchandani, learned senior standing counsel who appears on behalf of the respondent/revenue says that, perhaps, the best way forward would be to remand the matter.
7. Accordingly, the impugned order dated 27.03.2023 passed under Section 148A(d) of the Act is set aside. Liberty is, however, given to the AO to pass a fresh order, after according a personal hearing to the petitioner and/or his authorised representative. The AO will also take into account the reply filed by the petitioner. Needless to add, the AO will pass a speaking order; a copy of which will be furnished to the petitioner.
8. The Registry will scan and upload the e-mail dated 14.03.2023, so that it remains embedded in the case file.
9. The writ petition is disposed of in the aforesaid terms.
10. Consequently, pending application shall stand closed.
11. Parties will act based on the digitally signed copy of the order.
Principles of natural justice must be adhered to in administrative proceedings, and failure to do so may result in the setting aside of orders and the requirement for a fair process.
The central legal point established in the judgment is that the failure to consider the petitioner's reply in the assessment proceedings amounted to a breach of principles of natural justice, leading....
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....
Prevailing state of affairs clearly reflects that in absence of any effective system of accountability of erring officers, the harassment of the assessees and breach of principles of natural justice ....
Breach of natural justice warrants setting aside impugned orders and necessitates following due process in recommencing the proceeding.
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.
Failure to provide the mandatory seven-day notice period under Section 148A(b) invalidates tax assessments, establishing procedural compliance as crucial in tax law.
The Assessing Officer must provide adequate reasoning for reassessment actions and ensure compliance with natural justice principles.
The main legal point established in the judgment is that the writ court should not interfere at a premature stage when the proceedings initiated are yet to be concluded by a statutory authority.
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