ASEEM GARG vs. INCOME TAX OFFICER WARD 35(5) DELHI & ANR.

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W.P.(C)/6079/2022HC DelhiDLHC01014536202230 May 2022Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA2 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court held that the reassessment order dated March 21, 2022, passed under Section 147 read with Section 144B of the Income Tax Act, 1961, along with the notice of demand for the assessment year 2014-15, were liable to be set aside. The Court found that the admitted non-issuance of a prior show cause notice after the preparation of the draft assessment order constituted a violation of the prescribed mandatory procedure under Section 144B of the Act. The Court reasoned that this procedural lapse amounted to a jurisdictional error that went to the root of the matter. Consequently, the impugned order and notice were set aside. The Court granted liberty to the respondents to issue a fresh show cause notice in accordance with the draft assessment order to the petitioner and directed the National Faceless Assessment Centre (NaFAC) to pass a reasoned assessment order in accordance with law. The writ petition and pending application were disposed of.

What were the facts?

The petitioner, Aseem Garg, filed a writ petition before the Delhi High Court challenging a reassessment order dated March 21, 2022, passed by the Income Tax Officer, Ward 35(5), Delhi, under Section 147 read with Section 144B of the Income Tax Act, 1961, for the assessment year 2014-15. The petitioner also sought to prevent the respondents from giving effect to the said order. The petitioner contended that the reassessment order was passed in violation of the mandatory procedure prescribed under Section 144B of the Act. The respondents initially stated that a draft assessment order had been issued, but later admitted that no prior show cause notice was issued to the petitioner after the preparation of the draft assessment order.

What were the issues?

1. Whether the reassessment order dated March 21, 2022, passed under Section 147 read with Section 144B of the Income Tax Act, 1961, is liable to be set aside for non-compliance with the mandatory procedure prescribed under Section 144B of the Act, specifically the requirement of issuing a show cause notice after the preparation of a draft assessment order. Assessee's Contentions: The petitioner argued that the reassessment order was passed in violation of Section 144B of the Act. The petitioner contended that the procedure requires an opportunity to file a reply to a show cause notice, followed by the preparation of a draft assessment order, and then another show cause notice on the draft order, to which the assessee can file objections. The petitioner asserted that this mandatory procedure was not followed. Revenue's Contentions: Initially, the respondents indicated that a draft assessment order had been issued. However, on instructions, the learned counsel for the respondents admitted that no prior show cause notice was issued to the petitioner after the preparation of the draft assessment order.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B

AI-generated summary — verify with the full judgment below

$~1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 6079/2022 & CM APPL. 18275/2022 (for interim relief) ASEEM GARG ..... Petitioner Through: Mr. Ruchesh Sinha and Ms.Divya, Advocates. versus INCOME TAX OFFICER WARD 35(5) DELHI & ANR. ..... Respondents Through: Mr. Kunal Sharma, Senior standing counsel with Ms. Zehra Khan, Junior standing counsel and Mr.Shray Nargotra, Advocate for Income Tax Department. CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA O R D E R % 30.05.2022 Present writ petition has been filed challenging the reassessment order dated 21st March, 2022 passed by the respondents under Section 147 read with Section 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) along with the notice of demand for the assessment year 2014-15. Petitioner also seeks a direction to the respondents from giving effect to and/ or taking any step whatsoever pursuant to the said order. Learned counsel for the petitioner states that the impugned reassessment order has been passed in violation of the procedure prescribed under Section 144B of the Act. He states that under Section 144B of the Act, in case of a variation, the assessee has to be given an opportunity to file a reply to the show cause notice and, in the event, the respondent is not satisfied with the same, a draft assessment order has to be prepared on the 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 17/06/2026 at 18:51:15

basis of which another show cause notice has to be issued to which, the assessee can file objections. Though, on the last date of hearing, this Court was informed by learned counsel for the respondents that in the present case a draft assessment order had been issued, yet today, on instructions, learned counsel for the respondents admits that in the present case, no prior show cause notice after preparation of the draft assessment order had been issued to the petitioner. Since, in the present case, admittedly, no prior show cause notice after preparation of draft assessment order had been issued to the petitioner, this Court is of the view that by not following the prescribed mandatory procedure, there is a jurisdictional error which goes to the root of the matter. Accordingly, the impugned reassessment order dated 21st March, 2022, passed by the respondents under Section 147 read with Section 144B of the Act along with notice of demand for the assessment year 2014-15 are set aside. Liberty is granted to the respondents to issue a fresh show cause notice in accordance with the draft assessment order to the petitioner. NeFAC is directed to pass a reasoned assessment order in accordance with law. In view thereof, present writ petition along with pending application stands disposed of. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J MAY 30, 2022/j 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 17/06/2026 at 18:51:15

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