MEGA SELFLUBE BEARINGS PVT. LTD. vs. INCOME TAX OFFICER, WARD 17(1), DELHI

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W.P.(C)/5408/2023HC DelhiDLHC01015431202327 April 2023Author: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MS. JUSTICE TARA VITASTA GANJU4 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court, in its oral order, allowed the writ petition and set aside the impugned order passed under Section 148A(d) and the consequential notice issued under Section 148 of the Income Tax Act, 1961, both dated 31.03.2023. The Court directed the Assessing Officer (AO) to carry out a de novo exercise. The AO was instructed to update his records with the correct email ID of the petitioner (anilsahay@msboiles.in) and to furnish any information or documents in his possession that had not yet been provided to the petitioner. Crucially, the AO was directed to accord a personal hearing to the authorized representative of the petitioner, with notice to be issued indicating the date and time of the hearing. The AO was also mandated to pass a speaking order. The Court acknowledged the petitioner's contentions regarding the breach of natural justice due to insufficient time to respond and the incorrect email address used for communication. The revenue's counsel agreed to a fresh examination by the AO. No issue was expressly left undecided.

What were the facts?

The petitioner, Mega Selflube Bearings Pvt. Ltd., filed a writ petition before the Delhi High Court challenging an order dated 31.03.2023 passed under Section 148A(d) of the Income Tax Act, 1961, and a consequential notice dated 31.03.2023 issued under Section 148 of the Act, pertaining to Assessment Year 2016-17. The petitioner contended that the timeframe granted to respond to the notice under Section 148A(b) was insufficient, as it was delivered on 25.03.2023, leaving only four days to respond by 29.03.2023. Furthermore, the petitioner argued that the impugned order under Section 148A(d) was sent to an incorrect email address (monishuppal@yahoo.com) instead of the correct one (anilsahay@msboiles.in). The petitioner also pointed out that the Assessing Officer misinterpreted an extract from a show cause notice as an outcome of GST proceedings.

What were the issues?

1. Whether the timeframe granted to the petitioner to respond to the notice under Section 148A(b) of the Income Tax Act, 1961, was in breach of the principles of natural justice, given the short period between delivery and the response deadline? 2. Whether the impugned order passed under Section 148A(d) of the Act was vitiated due to being addressed to an incorrect email ID, thereby violating principles of natural justice? 3. Whether the Assessing Officer misinterpreted certain documents while passing the order under Section 148A(d)? Assessee's Contentions: - The time granted to respond to the Section 148A(b) notice was less than prescribed and practically insufficient (4 days). Reliance was placed on the principles of natural justice. - The order under Section 148A(d) was sent to the wrong email address (monishuppal@yahoo.com) instead of the correct one (anilsahay@msboiles.in), constituting a breach of natural justice. - The Assessing Officer misinterpreted an extract from a show cause notice as an outcome of GST proceedings in paragraph 4.1 of the impugned order. - The matter should be remanded to the Assessing Officer for a fresh consideration. Revenue's Contentions: - The revenue, through its senior standing counsel, agreed that directing a fresh examination of the matter by the Assessing Officer would be the appropriate course of action, given that the impugned order was sent to the wrong email ID.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(b),Section 148A(d),Section 148

AI-generated summary — verify with the full judgment below

$~56 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of decision: 27.04.2023

+ W.P.(C) 5408/2023 & CM APPL. 21163-64/2023

MEGA SELFLUBE BEARINGS PVT. LTD. ..... Petitioner Through: Ms Rano Jain, Adv. with Mr Vanketesh Mohan Chaurasia, Adv.

versus

INCOME TAX OFFICER, WARD 17(1), DELHI ..... Respondent Through: Mr Gaurav Gupta, Sr. Standing Counsel with Mr Puneett Singhal, Mr Shivendra Singh, Advs. CORAM: HON'BLE MR JUSTICE RAJIV SHAKDHER HON'BLE MS JUSTICE TARA VITASTA GANJU [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHER, J.: (ORAL) CM No. 21164/2023

1.

Allowed, subject to just exceptions. W.P.(C) 5408/2023 & CM No. 21163/2023[Application filed on behalf of the petitioner seeking interim relief].

2.

Issue notice.

2.

1 Mr Gaurav Gupta, senior standing counsel, accepts notice on behalf of the respondents/revenue.

3.

Given the directions that we propose to pass, Mr Gupta says that he need not file a counter-affidavit in the matter and that he will argue based on the record presently available with the court. Therefore, with the consent of learned counsels for the parties, the writ petition is taken up for hearing and final disposal, at this stage itself. W.P.(C) 5408/2023

4.

This writ petition concerns Assessment Year (AY) 2016-17. 5. The writ petition lays a challenge to the order dated 31.03.2023 passed under Section 148A(d) of the Income Tax Act, 1961 [in short, “the Act”].

5.

1 Besides this, challenge is also laid to the consequential notice of even date i.e., 31.03.2023 passed under Section 148 of the Act.

6.

At the very outset, Ms Rano Jain, who appears on behalf of the petitioner, says that there has been a breach of principles of natural justice.

7.

Ms Jain says that the timeframe granted for responding to the notice dated 21.03.2023 issued under 148A(b) of the Act, was less than the period prescribed under the Act.

7.1.

It is Ms Jain’s contention that although, facially, time was granted to file a response to the said notice “on or before 29.03.2023”, in effect, the petitioner had only four (4) days to file a response, as the said notice was delivered to the petitioner on 25.03.2023. 8. Furthermore, Ms Jain submits that the impugned order dated 31.03.2023 was directed to the wrong e-mail address. In this context, our attention is drawn to the impugned order dated 31.03.2023 passed under Section 148A(d) of the Act.

8.

1 Ms Jain says that this order was directed to the following e-mail ID: monishuppal@yahoo.com.

8.

2 In order to demonstrate that this is not the correct e-mail ID, Ms Jain has drawn our attention to Annexure-G, which sets forth, inter alia, what, according to Ms Jain, is the correct e-mail ID of the petitioner i.e., anilsahay@msboiles.in.

9.

Furthermore, Ms Jain also points out that in the impugned order W.P.(C) 5408/2023

passed under Section 148A(d) of the Act, the Assessing Officer (AO) in paragraph 4.1 has made a reference to an extract, which, he has construed as outcome of the GST proceedings, whereas it is only an extract from the show cause notice.

10.

Thus, for all these reasons, Ms Jain says that matter needs to be remanded to the AO for a fresh look.

11.

Mr Gupta submits that since the impugned order was directed to the wrong e-mail ID, perhaps the best way forward would be to direct a fresh examination of the matter by the AO.

12.

Accordingly, the writ petition is disposed of with the following directions: (i) The impugned order passed under Section 148A(d) of the Act and the notice issued under Section 148 of the Act, both of which are dated 31.03.2023, are set aside. (ii) Liberty is given to the AO to carry out a de novo exercise. (iii) The AO will update his record and take note of the correct e-mail ID of the petitioner. (iv) The AO will furnish the information/documents which are in his possession and have not been furnished to the petitioner as yet. (v) The AO will accord personal hearing to the authorized representative of the petitioner. Notice, in this behalf, will be issued indicating the date and time of hearing. (vi) Needless to add, the AO will pass a speaking order.

13.

Pending applications, if any, shall stand closed.

14.

Parties will act based on the digitally singed copy of the order.

(RAJIV SHAKDHER) JUDGE

(TARA VITASTA GANJU) JUDGE

APRIL 27, 2023/SA

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