SORIL INFRA RESOURCES LIMITED vs. NATIONAL E ASSESSMENT CENTRE & ORS.

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W.P.(C)/15760/2022HC DelhiDLHC01042679202218 November 2022Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA4 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court held that the issue of personal hearing is no longer res integra, referencing its own decision in Bharat Aluminium Company Ltd. vs. Union of India & Ors. The Court reiterated that the word 'may' in Section 144B(7)(viii) should be construed as a command, making the requirement of a reasonable opportunity of personal hearing mandatory when requested. The Court also found the classification made by the Revenue regarding disputed questions of fact and law in its Circular dated November 23, 2020, to be unsustainable. The statutory amendment to Section 144B further solidified the assessee's vested right to a personal hearing. Consequently, the impugned assessment order and demand notice were set aside. The Assessing Officer was directed to pass a fresh assessment order after considering the assessee's reply dated September 20, 2022, and providing a personal hearing within four weeks.

What were the facts?

The petitioner, Soril Infra Resources Limited (now Indiabulls Enterprises Limited), filed a writ petition challenging an Assessment Order and demand notice dated September 22, 2022, for Assessment Year 2020-21. The petitioner contended that the Assessment Order was a verbatim reproduction of the Show Cause Notice cum-draft Assessment Order dated September 13, 2022, and was passed without considering their reply submitted on September 20, 2022. Furthermore, the petitioner argued that their request for a personal hearing through video conferencing on September 19, 2022, was denied, violating principles of natural justice. The respondent argued that the petitioner's reply and request for a virtual hearing were submitted after the stipulated deadline.

What were the issues?

1. Whether the Assessment Order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, is invalid for being a verbatim reproduction of the draft assessment order and for not considering the assessee's reply. 2. Whether the denial of a personal hearing to the assessee, despite a request, violates the principles of natural justice and the provisions of Section 144B(7)(viii) of the Act. Assessee's Contentions: - The Assessment Order was a verbatim copy of the show cause notice and did not consider the assessee's reply filed on September 20, 2022. - The denial of a personal hearing, specifically requested on September 19, 2022, violates the principles of natural justice and Section 144B(7)(viii). Revenue's Contentions: - The assessee's reply and request for a virtual hearing were filed after the deadline of 16:46 hours on September 19, 2022.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 144B(7)(viii),Section 156

AI-generated summary — verify with the full judgment below

$~23 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 15760/2022 & CM APPL. 49036/2022, CM APPL. 49037/2022 SORIL INFRA RESOURCES LIMITED (NOW INDIABULLS ENTERPRISES LIMITED) .…Petitioner Through: Mr. Gautam Jain and Mr. Ajit Kumar Jha, Advocates. versus NATIONAL E-ASSESSMENT CENTRE THROUGH PR. CCIT AND ORS. …Respondents Through: Mr. Amrita Prakash, CGSC for Respondent no. 3. CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA O R D E R % 18.11.2022 1. Petitioner has filed an amended memo of parties. The same is taken on record and the cause title shall be amended accordingly. 2. It is pertaining to mention that the present writ petition has been filed challenging the Assessment Order passed by Respondent no.3 under Section 143(3) read with Section 144(B) of the Income Tax Act, 1961 (for short ‘the Act’) and demand notice under Section 156 of the Act, both dated 22nd September 2022 for Assessment Year 2020-21. 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 26/06/2026 at 09:56:51

3.

Learned counsel for the Petitioner states that the assessment order is nothing but a verbatim reproduction of the Show Cause Notice cum-draft Assessment Order dated 13th September, 2022. He states that the Assessment Order was passed without considering the reply submitted along with details by the Petitioner on 20th September, 2022 in response to the Show Cause Notice cum-draft Assessment Order by way of email. 4. Learned counsel for the Petitioner states that despite specific requests being made on 19th September, 2022 to provide the Petitioner with an opportunity of personal hearing through Video Conferencing due to the complexity of facts of the case, the Assessing Officer failed to do so and proceeded to pass the impugned order, which is in violation of principle of natural justice. 5. Learned counsel for the Respondent states that the Petitioner was given liberty to file a response through its registered e-filing account by 16:46 hours on 19th September, 2022. He states that the reply as well as the request for a virtual hearing were made after the aforesaid deadline. 6. In rejoinder, learned counsel for the petitioner emphasizes that the request for virtual hearing was made on 19th September 2022 itself and about 08:50 PM. He also states that the reply to the notice was filed on 20th September 2022 i.e. prior to the passing of the impugned order. 7. Having heard learned counsel for the parties, this Court is of the view that the issue involved in the present writ petition is no longer res integra. This Court in the case of Bharat Aluminium Company Ltd. vs. Union of India & Ors; Ors., [2022] 134 taxmann.com 187 (Delhi) has held that the use of the expression “may” in Section 144B(7)(viii) is not decisive. Where discretion is conferred upon a quasi judicial authority, whose decision has 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 26/06/2026 at 09:56:51

civil consequences, the word “may” which denotes discretion should be construed to mean a command. Consequently, the requirement of giving an assessee a reasonable opportunity of personal hearing is mandatory. It was further held that the classification made by the Respondent between the matters involving disputed questions of fact and questions of law by way of the Circular dated 23rd November, 2020 is not legally sustainable. In any event, the statutory amendment in Section 144B puts the controversy beyond doubt. Consequently, this Court is of the opinion that an assessee has a vested right to personal hearing and the same has to be given, if an assessee asks for it. 8. This Court is also of the view that under Section 144B, the Assessing Officer is to decide on the basis of material available on record including the reply of the assessee. In the present case, the reply had been sent to Assessing Officer by way of email on 20th September 2022. Consequently, the same was on record prior to passing of the impugned order under Section 144B. Accordingly, the impugned assessment order and the demand notice, both dated 22nd September 2022 for the assessment year 2020-21 are set aside and the Assessing Officer is directed to pass a fresh assessment order after taking into account the reply dated 20th September 2022 filed by the Petitioner. 9. It is clarified that the reply dated 20th September 2022 shall be taken as a reply filed on behalf of the successor entity and that the Petitioner shall argue the matter on merits before the Assessing officer and not on the ground that the initial notice had not been issued to the successor entity. 10. With the aforesaid direction and clarification, the present writ petition stands disposed off and the Assessing officer is directed to pass a fresh 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 26/06/2026 at 09:56:51

assessment order within four weeks in accordance with law after giving a personal hearing to the Petitioner. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J NOVEMBER 18, 2022 hp 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 26/06/2026 at 09:56:51

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