VALLEY IRON AND STEEL CO LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 5, & ANR.

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W.P.(C)/13455/2024HC DelhiDLHC01064596202424 September 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 order passed under Section 148A(d) dated August 29, 2024, and the notice under Section 148 dated August 30, 2024. The Court found that the AO had proceeded to pass the final order without addressing the petitioner's request for an adjournment to file a reply to the Section 148A(b) notice. The matter was remanded to the Assessing Officer to commence proceedings from the stage of issuing the Section 148A(b) notice. The AO was directed to provide an opportunity of hearing to the writ petitioner and allow them to file a reply to the original Section 148A(b) notice. The proceedings are to be continued thereafter in accordance with law. All rights and contentions of both parties on merits were expressly kept open. No specific issue was left undecided, as the court's decision was procedural.

What were the facts?

The petitioner, Valley Iron and Steel Co Limited, approached the Delhi High Court challenging an order dated August 29, 2024, passed under Section 148A(d) of the Income Tax Act, 1961, and a consequential notice dated August 30, 2024, under Section 148 of the Act. These actions initiated reassessment proceedings for Assessment Year 2018-19, stemming from a search conducted on Nitin Enterprises and related entities on January 18, 2024. The petitioner had previously requested a two-week extension to reply to the Section 148A(b) notice, issued on August 9, 2024, due to the indisposition of their authorized person. However, the final order under Section 148A(d) was passed without explicitly rejecting this adjournment request.

What were the issues?

1. Whether the order passed under Section 148A(d) and the consequential notice under Section 148 are liable to be quashed in light of the pending request for adjournment for filing a reply to the Section 148A(b) notice. Assessee's Contention: The petitioner argued that the Assessing Officer (AO) passed the order under Section 148A(d) and issued the Section 148 notice without properly considering or rejecting their request for an adjournment to file a reply to the Section 148A(b) notice, which was necessitated by the indisposition of their authorized representative. They contended that this procedural lapse prejudiced their right to be heard. Revenue's Contention: The revenue, represented by the Assistant Commissioner of Income Tax, did not have their arguments recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

$~92 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 13455/2024 & CM APPL. 56234/2024 (Interim Relief)

VALLEY IRON AND STEEL CO LIMITED .....Petitioner Through: Mr. Abhimanyu Jhamb, Ms. Thonpinao Thangal & Ms. Ayushi Srivastava, Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 5, & ANR. .....Respondents Through: Mr. Vipul Agrawal, SSC with Mr. Gibran Naushad & Ms. Sakashi Shairwal, JSCs.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE RAVINDER DUDEJA

24.09.2024 O R D E R

Allowed, subject to all just exceptions. CM APPL. 56235/2024 (Ex.)

The application stands disposed of. 1. The writ petitioner has approached this Court aggrieved by the initiation of reassessment action pursuant to an order dated 29 August 2024 passed under Section 148A(d) of the Income Tax Act, 1961 [‘Act’] and the consequential notice of 30 August 2024 issued under Section 148 of the Act. The reassessment action is proposed for Assessment Year [‘AY’] 2018-19 and emanates from a search which is stated to have been conducted on Nitin Enterprises and its related entities on 18 January 2024. W.P.(C) 13455/2024 & CM APPL. 56234/2024 (Interim Relief) 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 04/07/2025 at 02:01:20

2.

We, however, note that pursuant to the notice under Section 148 A(b) which had been issued on 09 August 2024, the petitioner had submitted a request in terms of a letter of 23 August 2024 for an extension of time by a period of two weeks to enable it to submit a reply. This request was addressed in light of the authorized person being indisposed. 3. However, and without rejecting that request for adjournment, the final order under Section 148A(d) came to be passed. 4. In view of the aforesaid and on hearing learned counsel for the petitioner and Mr. Agarwal, learned counsel appearing for the respondents, in our considered opinion, the ends of justice would merit, the matter being remanded to the Assessing Officer [‘AO’] for commencement of proceedings from the stage of issuance of a notice under Section 148A(b) notice with all rights and contentions of respective parties being kept open. 5. We accordingly allow the present writ petition and quash the order issued under Section 148A(d) dated 29 August 2024 and notice referable to Section 148 dated 30 August 2024. The matter shall stand remitted to the AO who shall provide an opportunity of hearing to the writ petitioner and accord an opportunity to file a reply to the original notice under Section 148A(b). The matter may thereafter be proceeded with further in accordance with law. 6. All rights and contentions of respective parties on merits are kept open.

YASHWANT VARMA, J

RAVINDER DUDEJA, J SEPTEMBER 24, 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 04/07/2025 at 02:01:20

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