MAHLE ANAND FILTER SYSTEMS PRIVATE LIMITED vs. NATIONAL FACELESS ASSESSMENT CENTRE NEW DELHI & ANR.

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W.P.(C)/14247/2023HC DelhiDLHC01043711202319 February 2024Bench: HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV,HON'BLE MR. JUSTICE YASHWANT VARMA4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the writ petition, holding that there was a manifest failure to comply with the principles of natural justice. The Court noted that the Assessing Officer (AO) issued a Show Cause Notice (SCN) on September 29, 2023, requiring a response by 10:00 AM on September 30, 2023. The writ petitioner submitted its detailed response on the e-filing portal on September 30, 2023, at approximately 11:13 AM. However, the impugned assessment order was passed at 12:06 PM on the same day, indicating that the AO had received the petitioner's objections before framing the order but failed to consider them. Consequently, the Court set aside the impugned assessment order, demand notice, and penalty notices dated September 30, 2023, as well as earlier notices dated December 7, 2021, and September 11, 2023. The AO was permitted to commence proceedings from the stage of the notice dated September 29, 2023, with a caution to ensure adequate opportunity of hearing. Any action on penalty notices would await the conclusion of assessment proceedings.

What were the facts?

The writ petitioner, Mahle Anand Filter Systems Private Limited, filed its Return of Income for Assessment Year 2020-21 on January 20, 2021. The return was selected for scrutiny on June 29, 2021. The Assessing Officer (AO) issued a notice under Section 142(1) on December 7, 2021, to which the petitioner replied on December 25, 2021. Subsequently, the AO issued a Show Cause Notice (SCN) on September 11, 2023, followed by another SCN on September 29, 2023, requiring a response by 10:00 AM on September 30, 2023. The petitioner filed its reply on the e-filing portal on September 30, 2023, at approximately 11:13 AM. However, the AO proceeded to pass the impugned assessment order, demand notice, and penalty notices on September 30, 2023, at 12:06 PM.

What were the issues?

1. Whether the assessment order dated 30.09.2023, passed under Section 143(3) read with Section 144B, and the accompanying notices of demand under Section 156 and penalty proceedings under Section 271AAC(1) and Section 270A for AY 2020-21, are liable to be quashed on grounds of violation of principles of natural justice. Assessee's Contention: The assessee argued that the assessment order was passed in gross violation of the principles of natural justice, as the objections and responses filed to the Show Cause Notices (SCNs) were not considered by the Assessing Officer (AO). Specifically, the AO issued an SCN on September 29, 2023, requiring a response by 10:00 AM on September 30, 2023. The assessee filed its detailed response on the e-filing portal on September 30, 2023, at approximately 11:13 AM, but the AO proceeded to pass the impugned order at 12:06 PM the same day, indicating that the assessee's objections had already been received but not considered. Revenue's Contention: The judgment does not record any specific arguments made by the revenue on the merits of the case or in response to the procedural violation claims.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 156,Section 271AAC(1),Section 270A,Section 142(1)

AI-generated summary — verify with the full judgment below

$~45 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 14247/2023 & CM APPL. 56339/2023 (Interim Relief)

MAHLE ANAND FILTER SYSTEMS PRIVATE LIMITED ..... Petitioner Through: Mr. Neeraj Jain, Mr. Aniket D. Agrawal and Mr. Saksham Singhal, Advs.

versus

NATIONAL FACELESS ASSESSMENT CENTRE NEW DELHI & ANR.

..... Respondents Through: Mr. Shlok Chandra, Sr. Standing Counsel along with Ms. Madhavi Shukla and Ms. Priya Sarkar, Jr. Standing Counsels, Mr. Ujjawal Jain and Mr. Shashank Kesarwani, Advs.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV

O R D E R %

19.02.2024

1.

This writ petition has been preferred seeking the following reliefs:- “a) issue a writ in the nature of certiorari or mandamus or any other appropriate writ, order or direction for quashing of impugned assessment order dated 30.09.2023 passed by Respondent No.1 under section 143(3) read with section 144B and the accompanying notice of demand issued under section 156 as well as notice(s) initiating proceedings for levy of penalty under section 271AAC(1) and 270A of the Act, both, dated 30.09.2023, in the case of the Petitioner for the assessment year 2020-21;

b) stay the effect and operation of the impugned assessment order dated 30.09.2023 passed under section 143(3) read with section 144B, and all actions/ proceedings consequent thereto, including, This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 22/02/2024 at 12:54:28

but not limited to, notice of demand under section 156, notice initiating proceedings for levy of penalty under section 271AAC and 270A of the Act, both, dated 30.09.2023, in the case of the Petitioner for assessment year 2020-21, during pendency of the present petition;

c) grant ad-interim ex-parte relief in terms of prayer (b) above;

d) pass such other order or orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.”

2.

The writ petitioner was constrained to approach this Court in light of the following facts. It is asserted that a Return of Income [“ROI”] for Assessment Year [“AY”] 2020-21 came to be filed by the writ petitioner on 20 January 2021. The aforesaid ROI is stated to have been picked up for detailed scrutiny through Computer Aided Scrutiny Selection [“CASS”] on 29 June 2021. The first respondent is stated to have issued a Notice referable to Section 142(1) of the Income Tax Act, 1961 [“Act’] on 07 December 2021. The writ petitioner acting in response to that submitted its reply on 25 December 2021. It is its case that while things remained static at that stage, on 11 September 2023, the Assessing Officer [“AO”] issued yet another Show Cause Notice [“SCN”] calling upon the writ petitioner to explain why proposed variations be not made. In response to the said SCN, the writ petitioner submitted a detailed reply on 18 September 2023. 3. Thereafter, another SCN came to be issued on 29 September 2023 requiring the writ petitioner to show cause by 10:00 AM on 30 September 2023. The writ petitioner filed a detailed response on the next day on the e-filing portal. However, the respondent proceeded to pass the impugned order on that date. It is in the aforesaid backdrop that the writ petitioner assails the validity of the assessment order contending that not only has the assessment order been made in gross This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 22/02/2024 at 12:54:28

violation of the principles of natural justice, even the objections and responses which have been filed to the SCNs’ were not taken into consideration by the AO. 4. Insofar as the latter aspect is concerned, we note that the respondent in terms of its Notice of 29 September 2023 had called upon the writ petitioner to furnish a response by 10:00 AM on the next date. The writ petitioner is stated to have submitted that response by way of e-filing on 30 September, 2023 on or about 11:13 AM. The impugned order, according to the petitioners, came to be passed thereafter at 12:06 PM being the time when it came to be digitally signed and thus clearly indicating that by the time the order was framed, the objections of the writ petitioner had been received. 5. In view of the aforesaid and since there appears to have been a manifest failure to comply with the principles of natural justice, we are of a considered opinion that the writ petition must succeed. 6. We, accordingly, allow the present writ petition and set aside the orders as well as Notices dated 07 December 2021, 11 September 2023 and 30 September 2023. We leave it open to the AO to commence proceedings from the stage of the issuance of the Notice dated 29 September 2023. We further place the AO on caution to ensure that adequate opportunity of hearing is provided to the writ petitioner. 7. Since the principal orders of assessment have come to be quashed, we also set aside the notices referable to Sections 270A and 271AAC of the Act both dated 30 September 2023 and only observe that any action would have to await the conclusion of the assessment proceedings.

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 22/02/2024 at 12:54:28

8.

The writ petition along with pending application stands disposed of in the aforesaid terms. All rights and contentions of respective parties are otherwise kept open.

YASHWANT VARMA, J.

PURUSHAINDRA KUMAR KAURAV, J. FEBRUARY 19, 2024/ RW This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 22/02/2024 at 12:54:28

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