DL INSURANCE SERVICES LTD vs. ASSISTANT COMMISSIONER OF INCOME TAX & ANR.

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W.P.(C)/10410/2024HC DelhiDLHC01045233202430 July 2024Bench: HON'BLE MR. JUSTICE YASHWANT VARMA,HON'BLE MR. JUSTICE RAVINDER DUDEJA2 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court allowed the writ petition, quashing the impugned order under Section 148A(d) and the consequential notice under Section 148, both dated March 31, 2024. The Court found that the Assessing Officer passed the order on the basis that no reply had been submitted, despite the existence of both the petitioner's request for adjournment and its detailed reply dated March 21, 2024. The Court noted that neither the adjournment request was formally rejected nor was the reply considered. The revenue's counsel conceded that remitting the matter to the Assessing Officer for fresh consideration would serve the ends of justice. Accordingly, the proceedings were to be considered afresh by the Assessing Officer from the stage of the petitioner's reply dated March 21, 2024. All rights and contentions of the parties on merits were kept open.

What were the facts?

The petitioner, DL Insurance Services Ltd., filed a writ petition challenging a reassessment action initiated by the Assistant Commissioner of Income Tax. The action comprised an order dated March 31, 2024, passed under Section 148A(d) of the Income Tax Act, 1961, and a consequential notice under Section 148. Proceedings began with a Show Cause Notice (SCN) on February 27, 2024. The petitioner requested a two-week adjournment on March 7, 2024, and submitted a detailed reply on March 21, 2024, also responding to a Section 133(6) notice issued on February 5, 2024. The impugned order was passed on the premise that no reply was submitted, despite the existence of the adjournment request and the detailed reply.

What were the issues?

1. Whether the order passed under Section 148A(d) and the consequential notice under Section 148, both dated March 31, 2024, are vitiated by the failure of the Assessing Officer to consider the petitioner's request for adjournment and its detailed reply dated March 21, 2024. (Question of law and fact, turning on Section 148A of the Income Tax Act, 1961). Assessee's Contention: The petitioner argued that the impugned order was passed without considering their submissions, including a request for adjournment and a detailed reply, which existed at the time the order was passed. They relied on the principle that natural justice requires consideration of all submitted material. Revenue's Contention: The revenue, through Mr. Rai, conceded that the matter should be remitted to the Assessing Officer for a fresh consideration rather than being retained by the Court.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 133(6)

AI-generated summary — verify with the full judgment below

$~83 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 10410/2024

DL INSURANCE SERVICES LTD .....Petitioner Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Aditya Vohra & Mr. Shashvat Dhamija, Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX & ANR.

.....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kumar, Mr. Rishabh Nangia, JSCs & Mr. Nikhil Jain, Adv.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE RAVINDER DUDEJA

O R D E R %

30.07.2024

CM APPL. 42779/2024 (Ex.)

Allowed subject to all just exceptions.

Application stands disposed of. W.P.(C) 10410/2024 & CM APPL. 42778/2024 (Stay) 1. This writ petition impugns the reassessment action initiated in terms of the order dated 31 March 2024 passed under Section 148A(d) of the Income Tax Act, 1961 [“Act”] and the consequential notice issued under Section 148. 2. The proceedings appear to have commenced pursuant to the issuance of a Show Cause Notice [“SCN”] on 27 February 2024, referable to Section 148A(b) of the Act. In response to the same, the petitioner addressed a communication on 07 March 2024 requesting for two weeks to furnish a reply to the SCN. This was followed by a 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 03/07/2025 at 19:22:53

detailed reply which came to be submitted on 21 March 2024. The record would reflect that on the same date the petitioner also responded to a notice under Section 133(6), which had been issued on 05 February 2024. 3. The impugned order of 31 March 2024, however, came to be passed on the basis that no reply had been submitted. It is pertinent to note that neither the request for adjournment appears to have been turned down nor has the response of 21 March 2024 been taken into consideration. Undisputedly, both existed at the time when the impugned order came to be passed. 4. Viewed in light of the aforesaid, it was Mr. Rai’s contention that rather than the matter being retained on the board of this Court, the ends of justice would warrant the matter being remitted to the concerned Assessing Officer [“AO”] for considering the issue afresh. 5. Accordingly, we allow the instant writ petition and quash the impugned order under Section 148A(d) and the consequential notice under Section 148, both dated 31 March 2024. The proceeding shall be considered afresh by the concerned AO from the stage of furnishing of the reply by the petitioner dated 21 March 2024. All rights and contentions of respective parties on merits are kept open.

YASHWANT VARMA, J

RAVINDER DUDEJA, J JULY 30, 2024/kk 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 03/07/2025 at 19:22:53

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