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IN THE HIGH COURT OF DELHI
Manmohan, Manmeet Pritam Singh Arora, JJ.
Vidisha Singhal - Appellant
Versus
Income Tax Officer Ward 29(1) Delhi - Respondent
W.P.(C) 14989 of 2022 & CM Appl. 46231 of 2022
Decided On : 16-11-2022
JUDGMENT
Manmohan, J. (Oral)
CM APPL.46232/2022 (exemption)
Allowed, subject to all just exceptions.
Accordingly, the application stands disposed of.
W.P.(C) 14989/2022 & CM APPL.46231/2022
1. Present writ petition has been filed challenging the notice issued under Section 148A(b) of the Income Tax Act, 1961 (`the Act') dated 29th May, 2022, order passed under Section 148A(d) dated 22nd July, 2022 and impugned notice issued under Section 148 dated 23rd July, 2022.
2. Learned Counsel for the Petitioner states that in the Section 148A(b) notice, transactions worth Rs.50,40,000/- having escaped assessment were attributed to Mr.Dayanand Singh and transaction worth Rs.48,54,000/- was attributed to Lifeline Securities Limited. He, however, states that in the impugned order under Section 148A(d), the entities and the amount have been swapped i.e. Rs.50,40,000/- transaction is now attributed to Lifeline Securities Limited and not to Mr.Dayanand Singh.
3. In pursuance to the last order, the Assessing Officer is personally present in Court today. He admits that the impugned order passed under Section 148A(d) of the Act is riddled with mistakes. He further admits that in the notice issued under Section 148A(b) of the Act, the details of the transactions allegedly carried out by the petitioner were not correct. He states that the transactions were clarified by the ITO (Inv), Unit-7, Delhi in its e-mail dated 14th July, 2022, which he had incorporated in the order passed under Section 148A(d) of the Act.
4. Keeping in view the aforesaid statements, the impugned order passed under Section 148A(d) and the impugned notice issued under Section 148 of the Act are set aside and the Assessing Officer is directed to issue an amended notice under Section 148A(b) of the Act along with the incriminating material in its possession to the assessee within two weeks. The assessee is given liberty to file a reply to the amended notice within four Neutral Citation Number: 2022/DHC/004922 weeks. The Assessing Officer is, thereafter, directed to decide the matter afresh within a further period of four weeks in accordance with law.
5. With the aforesaid directions and liberty, the present writ petition and application stand disposed of. The rights and contentions of all the parties are left open.
Administrative orders can be set aside by courts if found to be flawed in execution, ensuring rectification of inaccuracies in legal processes.
The court established that failing to consider a taxpayer's submission violates procedural fairness in tax assessments, necessitating the annulment of prior notices.
Reassessing without a hearing contravenes natural justice principles; proceedings must ensure opportunities for taxpayer representation.
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.
Point of law: Petitioner is admittedly covered by proviso (c) to Section 148A, this Court is of the view that the impugned order and notice are untenable in law.
The court determined that the reopening of assessment under Section 148A was unwarranted as the case fell under Section 153C due to insufficient adherence to procedural requirements.
The court emphasized the importance of providing all relevant material and documents to the petitioner in a fair and balanced manner, ensuring that the rights and contentions of all parties are left ....
The failure of the Assessing Officer to consider the petitioner's reply before issuing an order under Section 148A(d) constitutes a breach of natural justice, invalidating the order.
Notices under Income Tax Act must contain clear allegations to allow adequate defense, failing which they may be set aside.
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