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DELHI HIGH COURT
MANMOHAN, MANMEET PRITAM SINGH ARORA
Rajesh Kumar Malhotra – Appellant
Versus
Assistant Commissioner of Income Tax – Respondent
| Table of Content |
|---|
| 1. challenge to notice under income tax act (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. court observes denial of response to notice (Para 7) |
| 3. natural justice principles violated (Para 8 , 9 , 10 , 11 , 12 , 13) |
| 4. quashing of procedural notices (Para 14) |
| 5. disposal of the writ petition (Para 15) |
JUDGMENT
Manmohan, J. (Oral)--Present writ petition has been filed challenging the notice dated 27th March, 2022 under Section 148 of the Income Tax Act, 1961 (`the Act') for the Assessment Year 2018-19 pursuant to an order passed under Section 148A(d) of the Act on 27th March, 2022 by the Respondent No.1.
2. Learned counsel for the Petitioner states that the Petitioner was asked to comply with the Show Cause Notice dated 21st March, 2022 by 25th March, 2022, thereby not giving him the minimum statutory prescribed time of seven days to reply to the notice.
3. He points out that the notice under Section 148A(b) of the Act was issued by the Respondent No.1 on 21st March, 2022 for the Assessment Year 2018-19 stating that the Petitioner has claimed bogus Long Term Capital Gains (`LTCG') of Rs.1,23,21,875/- on purchase and sale in the shares of M/s Achal Investments Ltd. However, he points
Natural justice mandates adequate opportunities for defense in tax reassessment proceedings; failure to do so invalidates issued notices.
Point of Law – Needless to state that if and when such steps are taken and if petitioner has a grievance, he shall be at liberty to take his remedies in accordance with law.
A show cause notice under Section 148A(b) of the Income Tax Act must contain specific allegations of income escapement; its absence renders the assessment invalid.
Second notice under Section 148A(b) is invalid when an initial notice under Section 148 has already been served; Supreme Court directions pertain to a different timeframe and do not apply.
The Court affirmed that vague show cause notices issued under Section 148A(b) lack compliance with natural justice, necessitating clear material for Assessee responses.
Assessing Officers must provide specific details in notices for effective response by Assessee, adhering to principles of natural justice.
The court held that the Assessing Officer's failure to consider the petitioner's detailed replies before passing the reassessment order violated procedural justice under the Income Tax Act.
Section 148A(c) has been violated as it casts a duty on the Assessing Officer, by using the expression ‘shall’, to consider the reply of the Petitioner/assessee in response to notice under Section 14....
Orders based on vague allegations without specific details violate the right to a fair hearing under tax law.
The central legal point established in the judgment is the interpretation of the amended re-assessment scheme introduced by the Finance Act, 2021, and the importance of upholding principles of natura....
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