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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Darpan Kohli – Appellant
Versus
Assistant Commissioner of Income Tax – Respondent
W.P.(C) 10521 of 2023 & CM No.40793 of 2023
Decided On : 09-08-2023
Penalty - Income Tax Act - Assessment Year 2017-18 - The court set aside the show-cause notice for imposition of penalty under Section 271F of the Income Tax Act, 1961, as the assessment order on the back of which the penalty notice was issued had been previously set aside by a coordinate Bench of the court. The court granted liberty to the Assessing Officer to take the next steps in accordance with the law.
Fact of the Case:
The petitioner approached the court against the show-cause notice issued under Section 271F of the Income Tax Act, 1961 for imposition of penalty for Assessment Year 2017-18. The assessment order on the back of which the penalty notice was issued had been set aside by a coordinate Bench of the court.
Finding of the Court:
The court set aside the impugned show-cause notice dated 11.07.2023 and granted liberty to the Assessing Officer to take the next steps in accordance with the law.
Issues: The issue concerned the imposition of penalty under Section 271F of the Income Tax Act, 1961 based on an assessment order that had been set aside by a coordinate Bench of the court.
Ratio Decidendi: The court's decision was influenced by the fact that the assessment order on the back of which the penalty notice was issued had been previously set aside by a coordinate Bench of the court.
Final Decision: The impugned show-cause notice dated 11.07.2023 was set aside, and liberty was given to the Assessing Officer to take the next steps in accordance with the law.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral)
CM Appl.40793/2023
1. Allowed, subject to just exceptions.
W.P.(C) 6036/2021
2. Issue notice.
2.1. Mr Sunil Agarwal, learned senior standing counsel, accepts notice on behalf of the respondents/revenue.
3. In view of the directions that we intend to pass, Mr Agarwal says that he need not file a counter-affidavit in the matter and he will rely on the documents presently available with the court.
4. Therefore, with the consent of the learned counsels for the parties, the writ petition is taken up for hearing and final disposal, at this stage itself.
5. This petition concerns Assessment Year (AY) 2017-18.
6. The petitioner has approached this court against the show-cause notice dated 11.07.2023 issued under Section 271F of the Income Tax Act, 1961 [in short, "Act"] for imposition of penalty.
7. Mr M Sufian Siddiqui, who appears on behalf of the petitioner, says that what has been lost sight of is that the assessment order on the back of which impugned penalty notice has been issued, was set aside by a coordinate Bench of this court via order dated 31.05.2023 passed in
W.P.(C) no.7904/2023.
8. To be noted, via the said order, we had set aside the assessment order dated 09.05.2023, in terms set out in the order dated 31.05.2023.
8.1. This position is not disputed by Mr Agarwal.
9. Accordingly, the impugned show-cause notice dated 11.07.2023 is set aside.
10. Liberty is, however, given to the Assessing Officer (AO) to take the next steps, in accordance with the law.
11. The writ petition is disposed of, in the aforesaid terms.
12. Parties will act based on the digitally signed copy of the order.
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Breach of principles of natural justice in assessment proceedings under the Income Tax Act, 1961.
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The court clarified the impact of the assessment orders on penalty proceedings and set aside the impugned order based on the assessment order that was no longer in existence.
Failure to inform the petitioner about the decision on their request for accommodation constituted a breach of principles of natural justice, warranting the setting aside of the assessment order and ....
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Failure to adhere to the directions in the Standard Operating Procedure (SOP) for Assessment Unit, which led to the quashing of the impugned notices and order.
The impugned assessment order and consequential notices were set aside as they were passed without issuance of a show cause notice-cum-draft assessment order, as required by Section 144B of the Act a....
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