An order that violates the natural justice standards is unjustifiable
Fact and issue of the case
Mr Gaurav Gupta, learned senior standing counsel, accepts notice on behalf of the respondents/revenue.
In view of the directions that we propose to pass, Mr Gupta says that he does not wish to file a counter-affidavit in the matter and he will argue the matter based on the record, as is presently available with the court. Therefore, with the consent of the learned counsels for the parties, the writ petition is taken up for hearing and final disposal, at this stage itself.
This writ petition concerns Assessment Year (AY) 2018-19.
This writ petition is directed against the assessment order dated 03.03.2023 passed under Section 147, read with section 144B of the Income Tax Act, 1961 [in short, “Act”].
Besides this, challenge is also laid to the notice dated 17.03.2022 issued under Section 148A(b) and the order dated 31.03.2022 passed under Section 148A(d) of the Act.
In addition thereto, challenge is also laid to the consequential notice dated 31.03.2022 issued under Section 148 of the Act.
The principal allegation against the petitioner is that he has failed to disclose the entire sale consideration concerning the subject properties. The allegation levelled against the petitioner, as noted in the notice issued under Section 148A(b) of the Act, is captured in the following paragraphs of the annexure appended to the said notice. For the sake of convenience, the same are extracted hereafter:
An information has been received from ADIT (Inv.), Jalandhar that during the action of Enforcement Directorate on Sh. Bhupinder ,S/o Late Sh. Satnam Singh, R/o AdarshNgar , Jalandhar, a red colour diary was seized from the residential premise of Bhupinder Singh . The said diary was shared with department along with other documents related to violation of income Tax. During the in depth analysis of the said page, it was seen that against each transaction of Rs. 70,50,000/- a payment of Rs.1,21,50,000/- has been mentioned as Kacha in said dairy. An amount of Rs.70,500/- has been mentioned as TDS.Observation of the court
The petitioner, evidently, made a request for accommodation on 23.02.2023 to seek time up until 07.03.2023. We are told that the reason given for seeking accommodation was that the petitioner had to gather the material relevant for his defence.
It appears that without dealing with the request for accommodation, the AO passed the impugned assessment order dated 03.03.2023.
Clearly, the petitioner was not heard in support of his stand. There is, therefore, if nothing else, a breach of principles of natural justice, as the AO, without dealing with the request for accommodation, proceeded to pass the impugned assessment order dated 03.03.2023.
Therefore, on this singular ground, we are inclined to set aside the impugned assessment order dated 03.03.2023 and the order dated 31.03.2022 passed under Section 148A(d) of the Act. It is ordered accordingly.
Needless to state, the consequential notice dated 31.03.2022 issued under Section 148 of the Act shall also collapse.
The AO, however, will be at liberty to take steps, as per law, from the stage of the issuance of notice under Section 148A(b) of the Act dated 17.03.2022.
The petitioner will file a reply to the notice dated 17.02.2023 within the next four (4) weeks.
The AO will consider the same and, after granting personal hearing to the petitioner and/or his authorized representative, pass a fresh order.
The writ petition is disposed of in the aforesaid terms. Consequently, the pending application shall stand closed.
Parties will act based on the digitally signed copy of the order.
In the result, appeal of the assessee is allowed and ruled in favour of the assessee
Read the full order from hereInderpal-Singh-Sayan-Vs-Assessment-Unit-Income-Tax-Department-Ors-Delhi-High-Court-2