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IN THE HIGH COURT OF DELHI
Rajiv Shakdher, Tara Vitasta Ganju, JJ.
Bharat Seeds Corporation - Appellant
Versus
Acit Circle 34(1) New Delhi - Respondent
W.P.(C) 17406 of 2022 & CM Nos. 55402-03 of 2022
Decided On : 20-12-2022
| Table of Content |
|---|
| 1. application for interim relief and hearing process. (Para 1 , 2 , 3 , 4) |
| 2. challenge to notices under the income tax act. (Para 5) |
| 3. insufficient reasoning by assessing officer. (Para 6 , 7) |
| 4. setting aside of notices with liberty to recommence proceedings. (Para 8 , 9 , 10) |
| 5. final disposal and closure of the application. (Para 11) |
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (ORAL):
CM No.55403/2022
1. Allowed, subject to just exceptions.
W.P.(C) 17406/2022 & CM No.55402/2022 [Application filed on behalf of the petitioner seeking interim relief]
2. Issue notice.
2.1. Mr Sanjay Kumar accepts notice on behalf of the respondents/revenue.
3. In view of the directions we tend to pass, Mr Kumar says that a counter-affidavit need not be filed in the matter.
4. With the consent of the counsel for the parties, the writ petition is taken up for hearing and final disposal at this stage itself.
5. Challenge in the instant writ petition is laid to notice dated 22.05.2022 issued under Section 148A(b) of the Income Tax Act, 1961 [in short "Act"], concerning Assessment Year (AY) 2017-18.
5.1. Besides this, the petitioner has also assailed the order dated 26.07.2022 passed under Section 148A(d) and consequent notice of the even date i.e., 26.07.2022, issued under Section 148 of the Act.
6. It is evident that while passing the order dated 26.07.2022 under Section 148A(d) of the Act, the Assessing Officer (AO) has not discussed the response filed by the petitioner. The AO merely notes "on the mere written submissions of the assessee, relief cannot be given to the assessee, at this stage."
7. According to us, this is an unsatisfactory way of dealing with the response that an assessee has preferred qua the notice issued under Section 148A(b) of the Act. The AO ought to have given brief reasons as to why reassessment proceedings should continue in the matter.
8. Given this position, the impugned notices and order referred to hereinabove are set aside.
9. Liberty is, however, given to the AO to recommence the proceedings as per law, by passing a fresh order, after giving an opportunity of hearing to the petitioner's authorized representative.
10. The AO will be free to issue notice in this behalf to the petitioner whereby the date, venue and time of hearing will be fixed.
11. The writ petition is disposed of in the aforesaid terms. Consequently, the pending application shall stand closed.
The Assessing Officer must provide adequate reasoning for reassessment actions and ensure compliance with natural justice principles.
A personal hearing is essential in tax assessment procedures to ensure administrative fairness; failure to provide one invalidates the assessment orders.
The court established that failure to supply information required for assessment invalidates the reassessment notice, supporting due process in tax proceedings.
The importance of factual accuracy in the Assessing Officer's assumptions and the requirement to grant a fair opportunity for a personal hearing influenced the court's decision.
Failure to grant a personal hearing by the Assessing Officer violates principles of natural justice, necessitating the annulment of the assessment order.
The Assessing Officer must consider the petitioner's response and furnish the information/material before passing an order under Section 148 of the Income Tax Act.
The failure to consider the petitioner's reply and grant a hearing led to the setting aside of the assessment order and the direction for a fair hearing and speaking order by the Assessing Officer.
Compliance with procedural requirements and the right to a fair hearing are essential in proceedings under the Income Tax Act, 1961.
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.
Notices issued under updated provisions of the Income Tax Act cannot stand when the initial notice was issued under the previous provisions and is valid.
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