JYOTI NARANG vs. INCOME TAX OFFICER
What did the High Court hold?
The Delhi High Court held that there was a breach of the principles of natural justice. The Court found that the show-cause notice was sent to an incorrect email address, which deprived the petitioner of an opportunity to respond. Consequently, the Court set aside the impugned assessment order dated May 23, 2023, and the consequential penalty and demand notices of the same date. The petitioner was granted four weeks to file a response to the show-cause notice. The Assessing Officer was directed to open the designated portal for the petitioner to upload her response, issue a notice for a hearing, and pass a speaking order, a copy of which would be served on the petitioner. The ratio decidendi is that a failure to communicate a notice to the correct address constitutes a violation of natural justice, necessitating the setting aside of consequential orders and granting an opportunity to be heard.
What were the facts?
The petitioner, Jyoti Narang, filed a writ petition before the Delhi High Court challenging an assessment order dated May 23, 2023, and consequential penalty and demand notices. The primary grievance was a breach of natural justice. The petitioner contended that a show-cause notice (SCN) dated May 9, 2023, proposing variations in income, was sent to an incorrect email address ("dadasumit75@gmail.com") instead of her correct email address ("hridaanfurnitures@gmail.com"), which was also provided in her return of income. Consequently, she did not have an opportunity to respond to the SCN or seek a personal hearing. The revenue, represented by the Income Tax Officer, accepted notice. The Court noted that the revenue's counsel acknowledged that a response from the petitioner was necessary before merits could be discussed.
What were the issues?
1. Whether the petitioner was afforded an adequate opportunity to respond to the show-cause notice dated May 9, 2023, thereby adhering to the principles of natural justice, concerning the correct email address for communication? (Question of mixed law and fact, relating to procedural fairness under the Income Tax Act, 1961). Assessee's Contentions: - The show-cause notice was sent to an incorrect email address, preventing the petitioner from responding. - The correct email address was on record with the revenue. - The petitioner was denied an opportunity to respond and seek a personal hearing. Revenue's Contentions: - The revenue's counsel acknowledged that the merits of the case would be addressed once the petitioner filed a response to the SCN. No specific argument was recorded on the correctness of the email address or the breach of natural justice at this stage.
AI-generated summary — verify with the full judgment below
$~29 * IN THE HIGH COURT OF DELHI AT NEW DELHI %
Date of Decision: 14.07.2023
+ W.P.(C) 9289/2023 & CM Appl.35372/2023
JYOTI NARANG
..... Petitioner Through: Mr Prakash Kumar Sinha with Mr Ajay Kumar, Mr Kartik Garg and Ms Vartika Jain, Advs.
versus
INCOME TAX OFFICER
..... Respondent Through: Mr Sunil Agarwal, Sr Standing Counsel.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MR. JUSTICE GIRISH KATHPALIA [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHER, J. (ORAL): 1. Issue notice. 1.1 Mr Sunil Agarwal, learned senior standing counsel accepts notice on behalf of the respondent/revenue. 2. In view of the directions that we intend to pass, Mr Agarwal says, that no counter-affidavit is required to be filed, and he will rely on the record presently available with the Court. 3. Insofar as the petitioner is concerned, the principal grievance is that there has been a breach of principles of natural justice.
W.P.(C) 9289/2023
1/3 Digitally Signed By:ATUL JAIN Signing Date:19.07.2023 14:57:16 Signature Not Verified
The record shows, that the petitioner was issued a show-cause notice dated 09.05.2023 (SCN) proposing variation in income. 4.1 Via the SCN, the petitioner was given time to file a response, albeit by 16.05.2023 (12:04 Hrs.). 5. However, it appears that the notice was directed to an incorrect email address. The e-mail address to which the SCN was directed is “dadasumit75@gmail.com”. 6. According to the petitioner, the correct e-mail address is “hridaanfurnitures@gmail.com”. 6.1 The petitioner claims, that even in the return of income filed by her, the same e-mail address is given i.e., “hridaanfurnitures@gmail.com”. 7. Consequently, the submission is that the petitioner had no opportunity to respond to the SCN, and therefore seek a personal hearing in the matter. 8. Mr Sunil Agarwal, learned senior standing counsel, who appears on behalf of the respondent/revenue, says that on merits, there is a lot to be said, though that stage will arise, once a response is filed. 9. In view of the above, according to us, the best way forward would be to set aside the impugned assessment order, and grant an opportunity to the petitioner to file a response to the SCN. 10. It is ordered accordingly. 11. The impugned order dated 23.05.2023 is set aside. 11.1 Consequently, the penalty and demand notices of even date, i.e., 23.05.2023, shall also collapse. 12. The petitioner will file a response to the aforementioned SCN, within the next four weeks. W.P.(C) 9289/2023
2/3 Digitally Signed By:ATUL JAIN Signing Date:19.07.2023 14:57:16 Signature Not Verified
The Assessing Officer (AO) will open the designated portal to enable the petitioner to upload the response. The AO will also issue a notice to the petitioner, indicating therein, the date and time of hearing. 14. Consequently, the impugned demand and penalty notice will also collapse. 15. Needless to add, the AO will pass a speaking order; a copy of which will be served on the petitioner. 16. The above-captioned writ petition is disposed of in the aforesaid terms. 17. Parties will act based on the digitally signed copy of the order.
RAJIV SHAKDHER, J
GIRISH KATHPALIA, J
JULY 14, 2023/pmc
W.P.(C) 9289/2023
3/3
Digitally Signed By:ATUL JAIN Signing Date:19.07.2023 14:57:16 Signature Not Verified
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