Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Tara Vitasta Ganju, JJ.
E. Construct Fz Llc – Appellant
Versus
Assistant Commissioner of Income Tax Circle Int. Tax. 1(2)(2) & Anr. – Respondents
W.P.(C) 10672 of 2023
Decided On : 11-08-2023
Notice - Income Tax Act - The court set aside the assessment order passed under Section 148A(d) of the Income Tax Act, 1961, and directed the Assessing Officer to pass a fresh order after considering the petitioner's reply and according a personal hearing.
Fact of the Case:
The petitioner sought to challenge notices and an order issued under the Income Tax Act, 1961, claiming that the difficulty in filing a response was not taken into account before the assessment order was passed.
Finding of the Court:
The court set aside the impugned order and directed the Assessing Officer to pass a fresh order after considering the petitioner's reply and according a personal hearing.
Issues: Assessment order under Section 148A(d) of the Income Tax Act, 1961
Ratio Decidendi: The difficulty expressed by the petitioner in filing a response was not taken into account before passing the assessment order, leading the court to set aside the order and direct the Assessing Officer to consider the petitioner's reply and accord a personal hearing.
Final Decision: The writ petition was disposed of with the direction for the Assessing Officer to pass a fresh order after considering the petitioner's reply and according a personal hearing.
JUDGMENT
Rajiv Shakdher, J. (Oral)
CM Appl.41389/2023
1. Allowed, subject to just exceptions.
W.P.(C) 10672/2023 & CM Appl.41388/2023 [Application filed on behalf of the petitioner seeking interim relief]
2. Issue notice.
2.1. Mr Puneet Rai, learned senior standing counsel, accepts notice on behalf of the respondents/revenue.
3. In view of the directions that we intend to pass, Mr Rai says that no counter-affidavit is required to be filed and he will rely on the record presently available with the court.
3.1. Therefore, with the consent of the counsels for the parties, the writ petition is taken up for final hearing and disposal at this stage itself.
4. Via this writ petition, the petitioner/assessee seeks to assail the following notices and order:
(i) Notice dated 30.03.2023, issued under Section 148A(b) of the Income Tax Act, 1961 [in short, "Act"].
(ii) Order dated 17.04.2023, passed under Section 148A(d) of the Act.
(iii) Consequential notice dated 17.04.2023, issued under Section 148 of the Act.
4.1. The abovementioned notices and orders concern AY 2019-20.
5. The principal grievance of the petitioner is that after it was served with the notice dated 30.03.2023 under Section 148A(b) of the Act according time to file a response by 10.04.2023, a communication dated 14.04.2023 was sent to the respondents/revenue, explaining the difficulty in filing the response.
5.1. It is stated that the said difficulty was not taken into account before passing the assessment order dated 17.04.2023 under Section 148A(d) of the Act.
5.2. The difficulty that the petitioner expressed in its communication dated 14.04.2023, was simply this i.e., it had been served with the notice dated 30.03.2023 only on 14.04.2023, and therefore there was no way that the petitioner could file response by 10.04.2023.
6. This aspect of the matter was not taken into account by the Assessing Officer (AO) while passing the order under Section 148A(d) of the Act.
7. According to us, the best way forward would be to set aside the impugned order dated 17.04.2023 passed under Section 148A(d) of the Act, with liberty to the AO to pass a fresh order.
7.1. It is ordered accordingly.
8. The AO will pass a fresh order after considering the reply which the petitioner has furnished on merits, via communication dated 18.04.2023.
8.1. The AO will also accord personal hearing to the authorized representative of the petitioner.
8.2. For this purpose, a notice will be issued to the petitioner, setting out the date and time of hearing.
8.3. Needless to add, the AO will pass a speaking order, a copy of which will be furnished to the petitioner.
9. The writ petition is disposed of in the aforesaid terms. Accordingly, pending interlocutory application shall also stand closed.
10. Parties will act based on the digitally signed copy of the order.
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 court established that failure to supply information required for assessment invalidates the reassessment notice, supporting due process in tax proceedings.
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.
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 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 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....
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.
Procedural fairness and consideration of petitioner's response in assessment proceedings under the Income Tax Act
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
