SUKHDEEP SINGH CHADHA vs. ASSESSMENT UNIT, INCOME TAX DEPARTMENT

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W.P.(C)/9444/2023HC DelhiDLHC01027013202318 July 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 there was indeed a breach of the principles of natural justice, as conceded by the revenue. The Court found that the petitioner's reply, filed on 09.06.2023, was not considered by the Assessing Officer (AO) before passing the assessment order dated 27.06.2023. Consequently, the Court set aside the impugned assessment order. The AO was granted liberty to pass a fresh order after taking into account the petitioner's reply. Furthermore, the AO was directed to accord a personal hearing to the petitioner or their authorized representative before passing the fresh order. The AO must also address all contentions raised by the petitioner and pass a speaking order. The Court clarified that the order passed would not impact the merits of the case. The writ petition was disposed of in these terms.

What were the facts?

The petitioner, Sukhdeep Singh Chadha, filed a writ petition before the Delhi High Court challenging an assessment order dated 27.06.2023 passed by the Assessing Officer (AO) for Assessment Year 2021-22. The petitioner's primary grievance was a breach of natural justice. A show-cause notice dated 07.06.2023 was issued, proposing a variation in taxable income and requiring a response by 09.06.2023. The petitioner claims to have filed a reply on 09.06.2023, but this reply was allegedly not considered by the AO before passing the assessment order under Section 143(3) read with Section 144B of the Income Tax Act, 1961. The revenue, represented by the Assessment Unit, Income Tax Department, accepted that a breach of natural justice had occurred.

What were the issues?

1. Whether there was a breach of the principles of natural justice in the passing of the assessment order dated 27.06.2023 for AY 2021-22, specifically concerning the non-consideration of the petitioner's reply to the show-cause notice dated 07.06.2023, thereby violating Section 144B of the Income Tax Act, 1961? Assessee's Contention: The petitioner argued that a reply was filed on 09.06.2023, which was not considered by the AO while passing the assessment order dated 27.06.2023, leading to a violation of natural justice. The petitioner relied on the acknowledgement number on the filed reply. Revenue's Contention: The revenue, through its counsel, conceded that there had been a breach of the principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

W.P.(C) 9444/2023

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$~45 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Decision delivered on: 18.07.2023 + W.P.(C) 9444/2023

SUKHDEEP SINGH CHADHA

..... Petitioner

Through: Mr Pabitra Roy Chaudhary, Adv.

versus

ASSESSMENT UNIT, INCOME TAX DEPARTMENT ..... Respondent Through: Mr Vipul Agrawal, Sr Standing Counsel with Mr Gibran Naushad and Ms Sakshi Shairwal, Jr Standing Counsels.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

HON'BLE MR. JUSTICE GIRISH KATHPALIA [Physical Hearing/Hybrid Hearing (as per request)]

RAJIV SHAKDHER, J. (ORAL): CM APPL. 36052/2023 1. Allowed, subject to just exceptions. W.P.(C) 9444/2023 & CM No.36051/2023 [Application filed on behalf of the petitioner seeking interim relief] 2. Issue notice. 2.1 Mr Vipul Agrawal, learned senior standing counsel, accepts notice on behalf of the respondents/revenue. 3. Given the directions that we propose to issue, Mr Agrawal says counter-affidavit need not be filed and he will argue the matter based on the record presently available with the Court. Digitally Signed By:NEELAM SHARMA Signing Date:20.07.2023 10:32:57 Signature Not Verified

W.P.(C) 9444/2023

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3.1 Therefore, with the consent of 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) 2021-22. 5. For the moment, the principal grievance of the petitioner is that there has been a breach of principles of natural justice. 6. The record shows that a show-cause notice dated 07.06.2023 (SCN) was served upon the petitioner, proposing a variation in the taxable income. Via this notice, the petitioner was granted an opportunity to file a response up-until 09.06.2023 (11:00 hrs). 6.1 The petitioner claims that the reply was filed on 09.06.2023, which was not noticed by the Assessing Officer (AO) while passing the impugned assessment order dated 27.06.2023 under Section 143(3), read with Section 144B of the Income Tax Act, 1961 [in short, “the Act”]. 6.2. The reply is marked as Annexure P-4 and is appended at page 40 of the case file. The said document bears an acknowledgement number. 7. Given this position, Mr Agrawal cannot but accept that there has been a breach of principles of natural justice. 8. Therefore, according to us, the best way forward would be to set aside the impugned assessment order dated 27.06.2023. It is ordered accordingly. 9. Liberty is, however, given to the AO to pass a fresh order, after taking into account the reply filed by the petitioner. 10. Before passing the order, the AO will also accord personal hearing to the petitioner and/or his authorized representative. 11. Needless to add, the AO will deal with all the contentions raised by the petitioner and thereafter pass a speaking order.

Digitally Signed By:NEELAM SHARMA Signing Date:20.07.2023 10:32:57 Signature Not Verified

W.P.(C) 9444/2023

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12.

It is made clear that the order passed today will not impact the merits of the case. 13. The writ petition is disposed of, in the aforesaid terms. Resultantly, the interlocutory applications shall stand closed. 14. Parties will act based on the digitally signed copy of the order.

(RAJIV SHAKDHER) JUDGE

(GIRISH KATHPALIA) JUDGE JULY 18, 2023/RY

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Digitally Signed By:NEELAM SHARMA Signing Date:20.07.2023 10:32:57 Signature Not Verified

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