ASHOK JAIN vs. ASSESSMENT UNIT INCOME TAX DEPARTMENT NEW DELHI

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W.P.(C)/7825/2023HC DelhiDLHC01022192202331 May 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA3 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court held that principles of natural justice had indeed been breached. Consequently, the Court set aside the order dated July 22, 2022, passed under Section 148A(d) of the Income Tax Act, 1961, and the assessment order dated April 19, 2023, passed under Section 147 of the Act. The consequential notice issued under Section 148 dated July 22, 2022, was also set aside. The Assessing Officer (AO) was granted liberty to recommence the proceedings. Before recommencing, the AO was directed to issue a notice to the petitioner, affording an opportunity for a personal hearing. The AO was also directed to pass a speaking order concerning both the Section 148A(d) stage and the assessment order. The writ petition was disposed of in these terms.

What were the facts?

The petitioner, Ashok Jain, filed a writ petition before the Delhi High Court challenging proceedings initiated under Section 148A of the Income Tax Act, 1961, for Assessment Year 2016-17. The petitioner sought to quash the show cause notice dated May 18, 2022 (under Section 148A(b)), the order dated July 22, 2022 (under Section 148A(d)), and the assessment order dated April 19, 2023 (under Section 147). The principal grievance was a breach of natural justice and that the order under Section 148A(d) went beyond the allegations in the notice under Section 148A(b). The revenue, represented by its counsel, accepted that principles of natural justice were breached.

What were the issues?

1. Whether the order passed under Section 148A(d) of the Income Tax Act, 1961, traversed beyond the allegations made in the notice issued under Section 148A(b) of the Act, thereby breaching principles of natural justice? Assessee's contention: The petitioner argued that principles of natural justice were breached and that the order passed under Section 148A(d) went beyond the scope of allegations in the notice issued under Section 148A(b). Revenue's contention: The revenue, through its counsel, conceded that principles of natural justice had been breached.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(b),Section 148A(d),Section 147,Section 148

AI-generated summary — verify with the full judgment below

W.P.(C) 7825/2023 Page 1 of 3

$~102 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of decision: 31.05.2023

+ W.P.(C) 7825/2023

ASHOK JAIN

..... Petitioner

Through: Mr Gaurav Gupta, Advocate.

versus

ASSESSMENT UNIT INCOME TAX DEPARTMENT NEW DELHI

..... Respondent Through: Mr Gaurav Gupta, Sr. Standing Counsel with Mr Shivendra Singh and Mr Puneett Singhal, Jr. Standing Counsel.

CORAM:

HON'BLE MR JUSTICE RAJIV SHAKDHER

HON'BLE MR JUSTICE GIRISH KATHPALIA

O R D E R %

31.05.2023 [Physical Hearing/Hybrid Hearing (as per request)] CM APPL.30174/2023 1. Allowed, subject to the petitioner filing legible copies of the annexures, at least three days before the next date of hearing. W.P.(C) 7825/2023 and CM APPL.30173/2023 [Application filed on behalf of the petitioner seeking interim relief] 2. Issue notice. 2.1 Mr Gaurav Gupta, learned senior standing counsel, who appears on behalf of the respondent/revenue, accepts notice. 3. Given the directions that we propose to pass, Mr Gupta says that he Digitally Signed By:TARUN RANA Signing Date:23.06.2023 15:16:31 Signature Not Verified

W.P.(C) 7825/2023 Page 2 of 3

does not wish to file a counter-affidavit in the matter, and he will argue the matter based on the record presently available with the court. 3.1 Therefore, with the consent of the learned counsels for the parties, the writ petition is taken up for hearing and final disposal, at this stage itself. 4. This writ petition concerns Assessment Year (AY) 2016-17. 5. The substantive prayer made in the writ petition reads as follows:

“(A) Issue a writ, order or direction in the nature of Mandamus or Certiorari or any other appropriate writ against quashing of SCN u/s 148A(b) dated 18.05.2022, impugned order u/s 148A(d) dated 22.07.2022 and impugned order u/s 147 dated 19.04.2023 for the A.Y. 2016- 17 and all other consequential proceedings.”

6.

The principal grievance of the petitioner is that not only were principles of natural justice breached, but that the order passed on 22.07.2022 under Section 148A(d) of the Income Tax Act, 1961 [in short, “the Act”] traverses beyond the allegations levelled against the petitioner in the notice dated 18.05.2022 issued under Section 148A(b) of the Act. 7. Mr Gupta, who appears on behalf of the respondent/revenue, cannot but accept that principles of natural justice have been breached. 8. Accordingly, in our view, the best way forward would be to set the clock back to the stage at which notice dated 18.05.2022 under Section 148A(b) of the Act is positioned. 8.1 It is ordered accordingly. 9. Consequently, the order dated 22.07.2022 passed under Section 148A(d) of the Act and the assessment order dated 19.04.2023 passed under Digitally Signed By:TARUN RANA Signing Date:23.06.2023 15:16:31 Signature Not Verified

W.P.(C) 7825/2023 Page 3 of 3

Section 147 of the Act are set aside. The consequential notice issued under Section 148 of the Act, which is dated 22.07.2022, is also set aside. 9.1 The AO is, however, given liberty to recommence the proceeding. Before the AO recommences the proceeding, he will issue notice to the petitioner, according him and/or his authorised representative an opportunity of personal hearing. 9.2 For this purpose, the AO will issue notice indicating the date and time of the hearing. 10. Needless to add, the AO will pass a speaking order both insofar as the provisions of Section 148A(d) of the Act are concerned, and insofar as the assessment order is concerned. 11. The writ petition is disposed of in the aforesaid terms. 12. Pending application shall also stand closed. 13. Parties will act based on the digitally signed copy of the order.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J

MAY 31, 2023 / tr Digitally Signed By:TARUN RANA Signing Date:23.06.2023 15:16:31 Signature Not Verified

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