E.CONSTRUCT FZ LLC vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE INT. TAX. 1(2)(2) & ANR.

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W.P.(C)/10672/2023HC DelhiDLHC01031297202311 August 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 the impugned order dated April 17, 2023, passed under Section 148A(d) of the Income Tax Act, 1961, should be set aside. The Court reasoned that the Assessing Officer (AO) had not taken into account the petitioner's difficulty in responding to the notice under Section 148A(b), as the petitioner was served the notice after the due date for filing a response had already expired. The Court directed the AO to pass a fresh order after considering the reply furnished by the petitioner on merits via communication dated April 18, 2023. Furthermore, the AO was directed to grant a personal hearing to the petitioner's authorized representative and issue a notice specifying the date and time for the hearing. The AO is also required to pass a speaking order, a copy of which will be provided to the petitioner. The writ petition was disposed of in these terms.

What were the facts?

The petitioner, E.Construct FZ LLC, filed a writ petition before the Delhi High Court challenging a notice dated March 30, 2023, issued under Section 148A(b) of the Income Tax Act, 1961, an order dated April 17, 2023, passed under Section 148A(d) of the Act, and a consequential notice dated April 17, 2023, issued under Section 148 of the Act. These actions pertained to Assessment Year 2019-20. The petitioner's primary grievance was that it received the Section 148A(b) notice on April 14, 2023, making it impossible to file a response by the stipulated date of April 10, 2023. This difficulty was not considered by the Assessing Officer (AO) before passing the order under Section 148A(d).

What were the issues?

1. Whether the order passed under Section 148A(d) of the Income Tax Act, 1961, is vitiated due to the Assessing Officer's failure to consider the petitioner's difficulty in responding to the notice issued under Section 148A(b) of the Act, given that the petitioner was served the notice after the deadline for response had already passed. Assessee's Contention: The petitioner argued that it was served the notice under Section 148A(b) on April 14, 2023, while the deadline to file a response was April 10, 2023. This procedural lapse meant the AO could not have considered any response on merits before issuing the order under Section 148A(d). The petitioner relied on the principle that proper opportunity for response must be granted. Revenue's Contention: The revenue, through its senior standing counsel, accepted notice and stated it would rely on the available record, implying no counter-affidavit was necessary. No specific arguments were recorded for the revenue on the merits of the petitioner's grievance.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

W.P.(C)No.10672/2023 Page 1 of 3

$~ 65 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of Decision: 11.08.2023

+ W.P.(C) 10672/2023

E.CONSTRUCT FZ LLC

..... Petitioner

Through: Mr Ruchesh Sinha, Adv.

versus

ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE INT. TAX. 1(2)(2) & ANR.

..... Respondents Through: Mr Puneet Rai, Sr Standing Counsel with Mr Ashvini Kumar and Ms Madhavi Shukla, Advs.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

HON'BLE MS. JUSTICE TARA VITASTA GANJU [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHER, J.: (Oral) CM Appl.41389/2023 1. Allowed, subject to just exceptions. W.P.(C) 10672/2023 & CM Appl.41388/2023 [Application filed on behalf of the petitioner seeking interim relief] 2. Issue notice. 2.1 Mr Puneet Rai, learned senior standing counsel, accepts notice on behalf of the respondents/revenue. 3. In view of the directions that we intend to pass, Mr Rai says that no counter-affidavit is required to be filed and he will rely on the record presently available with the court. 3.1 Therefore, with the consent of the counsels for the parties, the writ Digitally Signed By:ATUL JAIN Signing Date:29.08.2023 17:28:18 Signature Not Verified

W.P.(C)No.10672/2023 Page 2 of 3

petition is taken up for final hearing and disposal at this stage itself. 4. Via this writ petition, the petitioner/assessee seeks to assail the following notices and order: (i) Notice dated 30.03.2023, issued under Section 148A(b) of the Income Tax Act, 1961 [in short, “Act”]. (ii) Order dated 17.04.2023, passed under Section 148A(d) of the Act. (iii) Consequential notice dated 17.04.2023, issued under Section 148 of the Act. 4.1. The abovementioned notices and orders concern AY 2019-20. 5. The principal grievance of the petitioner is that after it was served with the notice dated 30.03.2023 under Section 148A(b) of the Act according time to file a response by 10.04.2023, a communication dated 14.04.2023 was sent to the respondents/revenue, explaining the difficulty in filing the response. 5.1 It is stated that the said difficulty was not taken into account before passing the assessment order dated 17.04.2023 under Section 148A(d) of the Act. 5.2 The difficulty that the petitioner expressed in its communication dated 14.04.2023, was simply this i.e., it had been served with the notice dated 30.03.2023 only on 14.04.2023, and therefore there was no way that the petitioner could file response by 10.04.2023. 6. This aspect of the matter was not taken into account by the Assessing Officer (AO) while passing the order under Section 148A(d) of the Act. 7. According to us, the best way forward would be to set aside the impugned order dated 17.04.2023 passed under Section 148A(d) of the Act, Digitally Signed By:ATUL JAIN Signing Date:29.08.2023 17:28:18 Signature Not Verified

W.P.(C)No.10672/2023 Page 3 of 3

with liberty to the AO to pass a fresh order. 7.1 It is ordered accordingly. 8. The AO will pass a fresh order after considering the reply which the petitioner has furnished on merits, via communication dated 18.04.2023. 8.1 The AO will also accord personal hearing to the authorized representative of the petitioner. 8.2 For this purpose, a notice will be issued to the petitioner, setting out the date and time of hearing. 8.3 Needless to add, the AO will pass a speaking order, a copy of which will be furnished to the petitioner. 9. The writ petition is disposed of in the aforesaid terms. Accordingly, pending interlocutory application shall also stand closed. 10. Parties will act based on the digitally signed copy of the order.

RAJIV SHAKDHER, J

TARA VITASTA GANJU, J

AUGUST 11, 2023/pmc Digitally Signed By:ATUL JAIN Signing Date:29.08.2023 17:28:18 Signature Not Verified

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