Facts of the Case

The present writ petition was filed before the Delhi High Court by the petitioner, Jyoti Narang, challenging the assessment order dated 23.05.2023 passed by the Income Tax Department.

The petitioner contended that a Show Cause Notice (SCN) dated 09.05.2023 proposing variation in income was issued; however, the same was sent to an incorrect email address (“dadasumit75@gmail.com”) instead of the petitioner’s correct registered email (“hridaanfurnitures@gmail.com”), which was duly mentioned in the income tax return.

Due to this error, the petitioner was deprived of an opportunity to respond to the SCN and seek a personal hearing.

Issues Involved

  1. Whether service of Show Cause Notice on an incorrect email address constitutes a violation of principles of natural justice.
  2. Whether the assessment order passed without granting an opportunity of hearing is legally sustainable.
  3. Whether such procedural lapse warrants setting aside of the assessment order and consequential proceedings.

Petitioner’s Arguments

  • The petitioner argued that the SCN was never received due to it being sent to an incorrect email address.
  • It was submitted that the correct email address was already available with the department through the income tax return.
  • The petitioner contended that this resulted in denial of opportunity to respond and violation of principles of natural justice.
  • Relief was sought in the form of setting aside the impugned assessment order and granting an opportunity to respond.

Respondent’s Arguments

  • The respondent, represented by the Income Tax Department, submitted that the matter on merits could be contested once the petitioner files a response.
  • It was indicated that substantive issues exist, but the stage for consideration would arise only after proper response submission. 

Court’s Findings / Order

The bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia observed that:

  • The SCN was admittedly sent to an incorrect email address.
  • The petitioner was deprived of an opportunity to respond.
  • This constituted a clear breach of the principles of natural justice.

Accordingly, the Court held:

  • The impugned assessment order dated 23.05.2023 is set aside.
  • Consequential penalty and demand notices also stand quashed.
  • The petitioner is granted four weeks to file a response to the SCN.
  • The Assessing Officer (AO) shall:
    • Reopen the portal for filing response
    • Provide date and time for hearing
    • Pass a reasoned (speaking) order thereafter

The writ petition was disposed of in these terms.

Important Clarification

  • The Court did not adjudicate on merits of the tax dispute.
  • The order is limited to ensuring procedural fairness and compliance with natural justice.
  • The Assessing Officer retains full authority to decide the matter afresh after hearing the petitioner.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/RAS14072023CW92892023_145902.pdf

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