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DELHI HIGH COURT
MANMOHAN, NAVIN CHAWLA
Makams Industries Pvt. Ltd. – Appellant
Versus
Assistant Commissioner of Income Tax – Respondent
| Table of Content |
|---|
| 1. challenge to the assessment order based on functus officio. (Para 2 , 4) |
| 2. impugned assessment orders analyzed. (Para 5) |
| 3. conflict in assessment orders highlighted. (Para 6) |
| 4. consent to quash the impugned order. (Para 7) |
| 5. court's decision on merits and future proceedings. (Para 8 , 9) |
JUDGMENT
Manmohan, J. (Oral)--The petition has been heard by way of video conferencing.
2. Present writ petition has been filed challenging the Assessment order dated 15th June, 2021 passed under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') in case of the petitioner for the assessment years 2018-19 on the ground that the regular assessment proceeding in the case of the petitioner had already stood concluded vide assessment order dated 26th November, 2019 and the respondent Assessing Officer had become functus officio.
3. The learned Predecessor Division Bench while issuing notice on 07th July, 2021 had stayed the operation of the impugned Assessment Order dated 15th June, 2021. The order dated 07th July 2021 is reproduced hereinbelow:
"W.P.(C) 6155/2021 & CM No.19527/2021
[Application filed on behalf of the petitioner seeking stay on the op
The court held that an assessment officer cannot re-initiate proceedings after a case has been concluded, as it renders the officer functus officio.
The court emphasized the importance of jurisdiction and the inadvertent issuance of conflicting assessment orders, leading to the quashing of the impugned assessment order dated 15th June, 2021.
Assessment orders must uphold principles of natural justice, ensuring affected parties have a reasonable opportunity to respond, particularly in cases involving technical barriers to communication.
Violation of principles of natural justice due to failure to provide a reasonable opportunity to file a reply to the Show Cause Notice and draft assessment order.
The assessment order was invalid post 1st April 2021 due to non-compliance with mandatory provisions under the Income Tax Act and principles of natural justice.
An assessment order passed without compliance with procedural requirements of the Income Tax Act is invalid and must be set aside.
The court upheld the principle of consistency by maintaining existing stay orders against final assessments pending a writ petition, emphasizing compliance in tax deposits.
The court established that an assessment order must consider the taxpayer's responses as part of the mandatory procedure required by law, failure of which renders the order invalid.
Assessment orders must respect natural justice, providing parties an effective opportunity to respond, especially during extraordinary situations like a pandemic.
An assessment order finalized without allowing objections to a draft constitutes a jurisdictional defect, rendering the order invalid.
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