SAMIR SARAN vs. NATIONAL FACELESS ASSESSMENT CENTRE & ANR.

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W.P.(C)/801/2023HC DelhiDLHC01001691202323 January 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MS. JUSTICE TARA VITASTA GANJU3 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court held that the assessment order dated December 29, 2022, passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, was set aside. The Court found that the grant of a personal hearing is a mandatory requirement under Section 144B(6)(vii) of the Act, and it appeared that this was not granted to the petitioner before the impugned order was passed. The Court reasoned that procedural fairness, including the opportunity to be heard, is crucial in assessment proceedings. Consequently, the Assessing Officer was directed to frame a fresh assessment order after providing the petitioner an opportunity to be heard in person. This would involve issuing a notice with a date, time, and a hyperlink for video conferencing. The entire exercise was to be completed within twelve weeks from the date of receiving the judgment. The Court explicitly stated that the merits of the assessment were not examined.

What were the facts?

The petitioner, Samir Saran, filed a writ petition challenging an assessment order dated December 29, 2022, passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for Assessment Year 2021-22. The petitioner also challenged a consequential notice of demand under Section 156 and related proceedings. A show cause notice proposing an upward variation in income was served on December 20, 2022, to which the petitioner replied on December 22, 2022, also requesting a personal hearing. The assessment order was passed without granting this personal hearing.

What were the issues?

1. Whether the assessment order dated December 29, 2022, passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, is vitiated due to the non-grant of a personal hearing to the assessee, which is a mandatory requirement under Section 144B(6)(vii) of the Act? Assessee's Contention: The assessee argued that the assessment order was passed in violation of mandatory procedural requirements, specifically the failure to grant a personal hearing as stipulated in Section 144B(6)(vii) of the Act, despite a specific request for it. Revenue's Contention: The revenue, through its counsel, accepted notice and agreed to the disposal of the writ petition without filing a counter-affidavit, implying no objection to the proposed directions.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 144B(6)(vii),Section 156

AI-generated summary — verify with the full judgment below

NEUTRAL CITATION NO : 2023/DHC/000999

W.P.(C)No.801/2023 Page 1 of 3

$~43 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of decision: 23.01.2023

+ W.P.(C) 801/2023

SAMIR SARAN

..... Petitioner

Through: Mr Upvan Gupta, Advocate.

versus

NATIONAL FACELESS ASSESSMENT CENTRE & ANR.

..... Respondents Through: Mr Sunil Agarwal, Sr. Standing

Counsel.

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. 3109/2023 1. Allowed, subject to just exceptions. W.P.(C) 801/2023 2. Issue notice. 2.1 Mr Sunil Agarwal accepts notice on behalf of the respondents/revenue. 3. In view of the directions that we propose to pass, Mr Agarwal says that counter-affidavit is not required to be filed. Therefore, with the consent of the counsels for the parties, the writ petition is taken up for final hearing and disposal, at this stage itself. 4. This writ petition is directed against assessment order dated Digitally Signed By:ATUL JAIN Signing Date:13.02.2023 17:45:03 Signature Not Verified

NEUTRAL CITATION NO : 2023/DHC/000999

W.P.(C)No.801/2023 Page 2 of 3

29.12.2022 passed under Section 143(3), read with Section 144B of the Income Tax Act, 1961 [in short, “the Act”] concerning Assessment Year (AY) 2021–22. 4.1 Besides this, challenge is also being laid to the notice of demand of even date i.e., 29.12.2022, issued under Section 156 of the Act and the consequential proceedings initiated under the Act. 5. The record, as made available to the court, shows that a show cause notice dated 20.12.2022 was served on the petitioner/assessee proposing an upward variation in income chargeable to tax. 5.1. The record also shows that the petitioner/assessee had filed a reply dated 22.12.2022, wherein, inter alia, apart from his defence on merits, he had also sought a personal hearing in the matter. 6. It appears that personal hearing was not granted to the petitioner/assessee before passing the impugned assessment order. Undoubtedly, grant of personal hearing is a mandatory requirement under Section 144B(6)(vii) of the Act. 7. In these circumstances, the impugned assessment order dated 29.12.2022 is set aside. Liberty is, however, given to the Assessing Officer (AO) to frame a fresh assessment order, albeit, after giving an opportunity to the petitioner/assessee of being heard in person. 7.1 To achieve this, the AO will issue a notice to the petitioner. The notice will set forth the date and time of the hearing and also provide a hyperlink to the petitioner to enable him to join the proceedings via video conferencing. 7.2 The aforesaid exercise will be completed at the earliest, though, not later than twelve weeks from the date of receipt of a copy of the instant Digitally Signed By:ATUL JAIN Signing Date:13.02.2023 17:45:03 Signature Not Verified

NEUTRAL CITATION NO : 2023/DHC/000999

W.P.(C)No.801/2023 Page 3 of 3

judgment. 8. The writ petition is disposed of in the aforesaid terms. 9. We may indicate that we have not examined the matter on merits and therefore, the order passed today will not impact the assessment proceedings on merits. 10. Parties will act, based on the digitally signed copies of the order.

RAJIV SHAKDHER, J

TARA VITASTA GANJU, J

JANUARY 23, 2023 / tr

Click here to check corrigendum, if any

Digitally Signed By:ATUL JAIN Signing Date:13.02.2023 17:45:03 Signature Not Verified

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