SPRNG ENERGY PRIVATE LIMITED vs. ASSESSMENT UNIT INCOME TAX DEPARTMENT

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W.P.(C)/4895/2025HC DelhiDLHC01021181202517 April 2025Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA2 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court allowed the writ petition and set aside the impugned assessment order dated 25.03.2025. The Court held that the assessment order was passed in violation of the principles of natural justice, as the Assessee was not granted adequate opportunity to present its case. The Court noted the Assessee's submission that it had filed voluminous documents and requested a personal hearing and further time, which was not granted by the AO before passing the order. The Revenue's counsel also conceded to the setting aside of the order. Consequently, the matter was remanded to the Assessing Officer (AO) to consider the Assessee's response to the show cause notice and pass a fresh order after affording the Assessee a proper opportunity to be heard. The Assessee was also granted liberty to file further supporting documents within one week from the date of the order. No issue was expressly left undecided.

What were the facts?

The petitioner, SPRNG ENERGY PRIVATE LIMITED (Assessee), filed a writ petition before the Delhi High Court challenging an assessment order dated 25.03.2025 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, and a consequent demand notice under Section 156. The assessment year in question is 2023-24. The Assessee's return was selected for scrutiny, and a notice under Section 143(2) was issued. Subsequently, a show cause notice was issued on 13.03.2025, proposing to include share capital of ₹4,39,81,00,000/- in total income as unexplained credit under Section 68. The Assessee was given a short period to reply. Despite submitting voluminous documents and seeking a personal hearing and further time, the Assessing Officer (AO) passed the impugned order without granting a full opportunity to be heard.

What were the issues?

1. Whether the assessment order dated 25.03.2025 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, is liable to be set aside on the grounds of violation of the principles of natural justice? (Mixed question of law and fact, concerning Section 143(3) and Section 144B). Assessee's Contentions: The Assessee argued that the AO passed the impugned order in violation of the principles of natural justice. The Assessee contended that it was provided with an unreasonably short period to respond to the show cause notice concerning a substantial amount of share capital proposed to be added under Section 68. Despite submitting extensive documentation and requesting a personal hearing and additional time to collate further information, the AO proceeded to pass the assessment order without affording a proper opportunity to be heard. Revenue's Contentions: The learned counsel for the Revenue fairly submitted that the impugned order be set aside for the reasons stated in the petition and that the matter be remanded to the AO for fresh consideration.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 156,Section 68,Section 143(2)

AI-generated summary — verify with the full judgment below

$~110 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 4895/2025 & CM Nos.22521/2025 & 22522/2025 SPRNG ENERGY PRIVATE LIMITED .....Petitioner Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Anshul Sachar & Mr. Tavish Verma, Advs. Versus ASSESSMENT UNIT INCOME TAX DEPARTMENT .....Respondent Through: Mr. Siddhartha Sinha, Adv. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA O R D E R % 17.04.2025 1. Issue notice. 2. The learned counsel appearing for the respondent accepts notice. 3. The petitioner [Assessee] has filed the present petition, inter alia, impugning an assessment order dated 25.03.2025 [impugned order] passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961 [the Act]. The Assessee also impugns a notice of demand issued under Section 156 of the Act. 4. It is the Assessee’s case that the impugned order has been passed in violation of the principle of natural justice. The Assessee had filed its return of income for Assessment Year [AY] 2023-24 on 30.11.2023. The Assessee’s return was picked up for scrutiny and a notice dated 19.06.2024 was issued under Section 143(2) of the Act. It does not appear that any substantial proceedings were conducted immediately thereafter. However, on 13.03.2025, the AO issued a show cause notice [SCN] calling upon the Assessee to explain why the share capital amounting to ₹4,39,81,00,000/- not be included in the total income as unexplained credit under Section 68 of the Act. The Assessee was called upon to reply to the said SCN within a period of four 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 01/07/2025 at 21:20:00

days, that is on or before 17.03.2025. Thereafter, the AO issued another notice dated 16.03.2025, in effect, reiterating the contents of the SCN issued three days earlier. The Assessee was now called upon to file a reply by 19.03.2025. 5. The Assessee responded to the SCN by submitting voluminous documents on 17.03.2025. Thereafter, the Assessee also filed another reply dated 19.03.2025 submitting further documents and also sought a personal hearing. Additionally, the Assessee also requested for further two/three days’ time to collate the remaining documents considering that the information required is voluminous. However, the AO passed the impugned order without granting further opportunity to be heard. 6. The learned counsel appearing for the Revenue fairly submits that the impugned order be set aside for the reasons stated in the petition and the matter be remanded to the AO for consideration afresh. 7. In view of the above, the present petition is allowed and the impugned order is set aside. The matter is remanded to the AO to consider the Assessee’s response to the show cause notice and pass a fresh order after affording the Assessee an opportunity to be heard. The Assessee is also at liberty to file further documents in support of its contentions within a period of one week from date. 8. The petition is allowed in the aforesaid terms. Pending applications are also disposed of. VIBHU BAKHRU, J TEJAS KARIA, J APRIL 17, 2025 ‘gsr’ Click here to check corrigendum, if any 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 01/07/2025 at 21:20:00

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