ECE INDUSTRIES LIMITED vs. NATIONAL FACELESS ASSESSMENT CENTRE DELHI & ANR.

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W.P.(C)/560/2023HC DelhiDLHC01001005202317 January 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MS. JUSTICE TARA VITASTA GANJU4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that there was a clear breach of the principles of natural justice. The Court found that the petitioner had indeed made a request for a personal hearing on the designated e-filing portal, evidenced by the acknowledgement on 09.12.2022. The Assessing Officer's conclusion that no request was made was erroneous, likely due to not checking the portal. Given that a variation in returned income was proposed and a request for personal hearing was made before the deadline, the Assessing Officer was bound to grant the hearing as per Section 144B(7)(vii) and (viii) of the Act. Consequently, the impugned assessment order dated 23.12.2022 was set aside. The Assessing Officer was directed to pass a fresh order after affording a personal hearing to the petitioner's authorized representative, to be conducted via video conferencing. The petitioner was granted liberty to assail the fresh order if it was adverse.

What were the facts?

The petitioner, ECE Industries Limited, filed a writ petition challenging an assessment order dated 23.12.2022, a notice of demand of the same date, and notices initiating penalty proceedings under Section 270A and 272A(1)(d) of the Income Tax Act, 1961. These actions pertain to Assessment Year 2021-22. The petitioner had declared an income of Rs.1,37,77,480/-. The case was selected for scrutiny, and after receiving a notice proposing variations in income, the petitioner filed a reply on 06.12.2022. Crucially, the petitioner claims to have made a request for a personal hearing on the designated e-filing portal, which was evident from the acknowledgement on 09.12.2022. However, the assessment order was passed on 23.12.2022, purportedly without affording a personal hearing, and an addition of Rs.38.94 crores was made.

What were the issues?

1. Whether the assessment order dated 23.12.2022, passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, is vitiated by a breach of the principles of natural justice due to the alleged failure to grant a personal hearing to the petitioner, as required by Section 144B(7)(vii) and (viii) of the Act? Assessee's Contention: The petitioner argued that the assessment order was passed without affording a personal hearing, despite a request for the same being made on the e-filing portal. This disregard for the request constitutes a breach of natural justice. The petitioner relied on the provisions of Section 144B(7)(vii) and (viii) of the Act, which mandate personal hearings in certain circumstances. Revenue's Contention: The revenue, through its counsel, accepted notice. The judgment notes that the Assessing Officer concluded no request for personal hearing was made, implying the revenue's stance was that no such request was made or that it was not a valid ground for challenge. However, no specific arguments or reliance on authorities were recorded for the revenue beyond accepting notice and agreeing to proceed with the hearing.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 144B(7)(vii),Section 144B(7)(viii),Section 270A,Section 272A(1)(d),Section 143(2)

AI-generated summary — verify with the full judgment below

$~54 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 560/2023

ECE INDUSTRIES LIMITED

..... Petitioner Through: Ms Kavita Jha and Mr Himanshu Aggarwal, Advocates.

versus

NATIONAL FACELESS ASSESSMENT CENTRE DELHI & ANR.

..... Respondents Through: Mr Kunal Sharma, Senior Standing Counsel with Ms Zehra Khan, Advocate.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

HON'BLE MS. JUSTICE TARA VITASTA GANJU

O R D E R %

17.01.2023 [Physical Hearing/Hybrid Hearing (as per request)]

CM APPL. 2202/2023 1. Allowed, subject to exceptions.

W.P.(C) 560/2023 and CM APPL. 2201/2023 [Application filed on behalf of the petitioner seeking interim relief] 2. Issue notice. 2.1. Mr Kunal Sharma, accepts notice on behalf of the respondents/revenue. 3. In view of the directions that we intend to pass, Mr Sharma says that a counter-affidavit is not required to be filed. Therefore, with the consent of the counsel for the parties, the writ petition is taken up for hearing and final disposal, at this stage itself. 4. The principal grievance of the petitioner is that the impugned W.P.(C) 560/2023

Page 1 of 4 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 03/06/2026 at 14:44:45

assessment order dated 23.12.2022 was passed by respondent no.1, in exercise of powers under Section 143(3), read with Section 144B of the Income Tax Act, 1961 [in short, “the Act”], without affording personal hearing to the petitioner. 4.1. To be noted, apart from the challenge laid to the aforesaid assessment order, the petitioner has also assailed the notice of demand of even date i.e., 23.12.2022 and the notices which initiated penalty proceedings under Section 270A and 272A(1)(d) of the Act. 5. The aforementioned notices and assessment order concern Assessment Year (AY) 2021-22. 6. The record shows that the petitioner had filed its return on 14.03.2022 concerning Assessment Year (AY) 2021-22. In the return, petitioner had declared income of Rs.1,37,77,480/-. 6.1. The record also shows that the petitioner’s case was selected for scrutiny assessment. Intimation in that behalf was sent to the petitioner on 27.06.2022, followed by a notice dated 28.06.2022 issued under Section 143(2) of the Act. 6.2. The Assessing Officer [in short, “AO”] issued a notice to the petitioner on 02.12.2022 proposing variation in the returned income. The petitioner was provided time to respond to the same, which expired on 09.12.2022 at 11:00 hours. The petitioner, admittedly, filed its reply on 06.12.2022. 6.3. The record also shows that the petitioner made a request for personal hearing on the designated e-filing portal. The fact that such a request was made is evident upon perusal of the acknowledgement at about 8.54 AM on W.P.(C) 560/2023

Page 2 of 4

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 03/06/2026 at 14:44:45

09.12.2022. This aspect emerges upon perusal of document appended at page 266 of the case file. 7. Evidently, while passing the impugned assessment order on 23.12.2022, the request made by the petitioner for grant of personal hearing was disregarded and an addition of Rs.38.94 crores was made qua the income of the petitioner. 8. Clearly, there was a variation proposed in the returned income of the petitioner. As indicated above, the record also shows that the petitioner did make a request for personal hearing before the expiry of the deadline. Given these two aspects, which have emerged from the record, the AO, in our view, was bound to grant personal hearing as is provided under Section 144B(7)(vii) and (viii) of the Act. 9. The AO for some reason has concluded that no request was made. It appears that the AO did not look at the designated portal and hence committed the error of noting that no request is made. 10. Undoubtedly, there has been a breach of principles of natural justice. In view of the aforesaid, the impugned order is set aside, with liberty to the AO to pass a fresh order after according personal hearing to the petitioner’s authorised representative. 10.1. The AO will issue notice to the petitioner in that behalf, fixing the date and time of hearing. 10.2. The AO will conduct the proceedings via video conferencing and a link for that purpose will be sent to the petitioner. 10.3. The Assessing Officer will, thereafter, pass a speaking order.

W.P.(C) 560/2023

Page 3 of 4 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 03/06/2026 at 14:44:45

10.4. In the case the order is adverse to the interest of the petitioner, the petitioner will have liberty to assail the same as per law. 11. The writ petition is disposed of in the aforesaid terms. Consequently, CM APPL. 2201/2023 is also disposed of. 12. Parties will act based on the digitally signed copy of the order.

RAJIV SHAKDHER, J

TARA VITASTA GANJU, J

JANUARY 17, 2023/tp

Click here to check corrigendum, if any W.P.(C) 560/2023

Page 4 of 4 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 03/06/2026 at 14:44:45

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