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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Rajnish Yadav – Appellant
Versus
Income Tax Officer, Ward 62 (1), Delhi – Respondent
W.P.(C) 8943 of 2023
Decided On : 07-07-2023
Income Tax Act - Set aside impugned order and direct Assessing Officer to carry out de novo exercise after furnishing relevant information to petitioner
Fact of the Case:
The petitioner was issued a notice under Section 148A(b) of the Income Tax Act alleging bogus purchases, and the Assessing Officer passed an order without furnishing relevant information to the petitioner.
Finding of the Court:
The court set aside the impugned order and directed the Assessing Officer to carry out a de novo exercise after furnishing relevant documents to the petitioner.
Issues: Allegation of bogus purchases, failure to furnish relevant information to the petitioner, validity of the Assessing Officer's order
Ratio Decidendi: The court emphasized the importance of furnishing relevant information to the petitioner before passing an order and directed the Assessing Officer to carry out a fresh assessment after providing the necessary documents to the petitioner.
Final Decision: The impugned order dated 13.04.2023 was set aside, and the Assessing Officer was directed to pass a fresh order after furnishing relevant documents to the petitioner.
JUDGMENT
Rajiv Shakdher, J. (Oral)
CM Appl.33920/2023
1. Allowed, subject to just exceptions.
W.P.(C) 8943/2023
2. Issue notice.
2.1. Mr Prashant Meharchandani, learned senior standing counsel, accepts notice on behalf of the respondent/revenue.
3. In view of the direction that we propose to pass, Mr Meharchandani says that a counter-affidavit need not be filed, and he will argue the matter based on the record presently available with the court.
4. The record shows that the principal allegation against the petitioner is that he is the beneficiary of an accommodation entry provided by one, Mr Sanjay Jain.
5. It is alleged that bogus purchases have been made by the petitioner. The value of the bogus purchases has been pegged at Rs.11,98,577/-.
6. In this context, the petitioner was issued a notice dated 29.03.2023 under Section 148A(b) of the Income Tax Act, 1961 [in short, "Act"].
6.1. Via the said notice, the petitioner was granted time to file a response, albeit up until 10.04.2023.
7. The record shows that on 04.04.2023, the petitioner filed a response, although not on merits, but to indicate to the Assessing Officer (AO) that the necessary information/material, which formed the basis of the allegation levelled against him, had not been furnished to him,
8. It appears that the AO, without furnishing the relevant information/material, proceeded to pass the order dated 13.04.2023 under Section 148A(d) of the Act.
9. A perusal of the said order shows that there is a reference to the statement made by Mr Sanjay Jain under Section 132(4) of the Act. This statement, according to the petitioner, was not furnished to him.
10. Given this position, the best way forward would be to set aside the impugned order dated 13.04.2023, with a direction to the AO to carry out a de novo exercise, after relevant information/documents are furnished to the petitioner.
11. It is ordered accordingly.
12. Accordingly, the impugned order dated 13.04.2023 is set aside.
13. Liberty is, however, given to the AO to pass a fresh order, as indicated above, after relevant documents/information are furnished to the petitioner before proceeding in the matter.
13.1. Relevant material/information will be furnished to the petitioner within the next two weeks.
13.2. The petitioner will be at liberty thereafter to file a reply.
13.3. A reply will be filed within four (4) weeks of receipt of the relevant material/information.
13.4. The AO will deal with all the contentions that the petitioner may choose to raise in the reply, both on merits, as well as on jurisdiction, in his reply.
14. The writ petition is disposed of, in the aforesaid terms.
15. The parties will act based on digitally signed copy of the order.
Failure to consider the petitioner's reply can lead to the setting aside of an impugned order and grant liberty for a de novo exercise by the Assessing Officer.
The importance of the petitioner's response to the notice issued under Section 148A(b) of the Income Tax Act and the granting of a personal hearing.
Procedural fairness and compliance with notice requirements are essential in the assessment process under the Income Tax Act.
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 principle of natural justice and due process requires the Assessing Officer to provide requisite material and accord personal hearing before carrying out proceedings de novo.
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 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.
Adherence to statutory provisions, including providing adequate time for filing responses, and granting the assessee an opportunity to be heard before passing an order.
The court emphasized the importance of addressing the petitioner's submissions and complying with the time limit for filing the reply, leading to the order for a de novo exercise by the AO.
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