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IN THE HIGH COURT OF DELHI
Manmohan, Dinesh Kumar Sharma, JJ.
Smart Cube India Pvt. Ltd. - Appellant
Versus
Deputy Commissioner of Income Tax - Respondent
W.P.(C) 6365 of 2022 & CM Appls. 19227-19228 of 2022
Decided On : 21-04-2022
| Table of Content |
|---|
| 1. challenge to the assessment order (Para 1) |
| 2. arguments on illegality and nullity of assessment (Para 2 , 3) |
| 3. scheduling further proceedings (Para 4 , 5) |
| 4. staying the impugned orders (Para 6) |
JUDGMENT
Manmohan, J. (Oral)--Present writ petition has been filed challenging the assessment order dated 30th March, 2022 passed under Section 143(3) read with Section 254, notice of demand issued under Section 156 and penalty notice issued under Section 274/271(1)(c) of the Income Tax Act, 1961 (for short `the Act') all dated 30th March, 2022 for the assessment year 2011-12.
2. Learned senior counsel for the Petitioner states that the Respondent passed the impugned assessment order under Section 143(3) read with Section 254 of the Act assessing the income of the Petitioner at Rs.3,29,33,145/-. He states that the impugned order passed by the Respondent illegally deprived the Petitioner of the option to file objections against the draft assessment order before the Dispute Resolution Panel (`DRP') as provided under Section 144C of the Act and is, therefore, wholly without jurisdiction and invalid.
3. Learned senior counsel for the Petitioner states that the Respondent has finalized assessment without first forwarding a draft of the proposed order of assessment which is an incurable defect rendering the assessment order a nullity, as repeatedly held by this Court in various decisions, including in Turner International India (P.) Ltd., [2017]398 ITR 177 (Del), JCB India Ltd., [2017]398 ITR 189 (Del) and Pr. CIT Vs. Headstrong Services India (P.) Ltd., [2021]278 Taxman 224 (Delhi).
4. Issue notice. Mr. Sanjay Kumar, Advocate accepts notice on behalf of respondent. He states that connected matters are listed before this Court on 10th October, 2022.
5. Accordingly, list the matter on 10th October, 2022.
6. Till further orders, the impugned assessment order, demand notice and penalty notice are stayed.
An assessment order finalized without allowing objections to a draft constitutes a jurisdictional defect, rendering the order invalid.
An assessment order passed without compliance with procedural requirements of the Income Tax Act is invalid and must be set aside.
Violation of mandatory procedure under Section 144C of the Income Tax Act and a circular issued by the Central Board of Direct Taxes led to the setting aside of the Assessment Order and restoration o....
The assessment order is to be passed only after considering the reply of the assessee as per Section 144B(1)(xxiv) of the Income Tax Act, and failure to do so constitutes a violation of the mandatory....
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.
The failure to grant a personal hearing in complex assessments violates principles of natural justice as mandated by the Income Tax Act.
A taxpayer must file objections to proposed tax assessments with both the Dispute Resolution Panel and Assessing Officer for effective challenge under the Income Tax Act.
The court ruled that an assessment order issued without observing due process and the principles of natural justice is invalid, necessitating a fresh assessment.
The court emphasized the importance of complying with time limits and the jurisdiction of the Assessing Officer to pass assessments in conformity with the directions of the Dispute Resolution Panel.
The assessing officer is bound to dispose of the objections filed by the noticee before proceeding with the assessment after issuing a notice under Section 148 of the Income Tax Act.
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