Facts of the Case

The petitioner challenged the validity of the order dated 27.03.2023 passed under Section 148A(d) and the consequential notice issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2016–17.

The grievance raised was that the Assessing Officer passed the impugned order without properly considering the reply submitted by the petitioner, thereby violating the principles of natural justice.

The petitioner also placed on record a copy of the email dated 14.03.2023 containing the reply submitted before the authority.

 Issues Involved

  1. Whether the order passed under Section 148A(d) is sustainable when the reply of the assessee is not considered.
  2. Whether non-consideration of reply amounts to violation of principles of natural justice.
  3. Whether the consequential notice under Section 148 is liable to be set aside for lack of jurisdiction.

 Petitioner’s Arguments

  • The petitioner contended that there was a clear breach of principles of natural justice, as the reply submitted was not taken into account by the Assessing Officer.
  • It was argued that the impugned order under Section 148A(d) was passed mechanically without application of mind.
  • The consequential notice under Section 148 was therefore without jurisdiction and liable to be quashed.

 Respondent’s Arguments

  • The Revenue, through its counsel, fairly submitted that the matter could be remanded for fresh consideration.
  • It was suggested that the Assessing Officer be permitted to pass a fresh order after considering the petitioner’s reply.

 Court’s Findings / Order

  • The Delhi High Court set aside the impugned order dated 27.03.2023 passed under Section 148A(d).
  • The matter was remanded back to the Assessing Officer with the following directions:
    • Provide personal hearing to the petitioner or authorized representative.
    • Consider the reply submitted by the petitioner.
    • Pass a speaking order in accordance with law.
  • The writ petition was disposed of in these terms.

 Important Clarification by Court

  • The Court emphasized that the Assessing Officer must consider the reply filed by the assessee before passing any order.
  • A speaking order is mandatory, ensuring transparency and application of mind.
  • The order reinforces that procedural fairness is integral in reassessment proceedings.

Sections Involved

  • Section 148 – Issue of notice where income has escaped assessment
  • Section 148A(d) – Order deciding whether it is a fit case to issue notice under Section 148

Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/60802062023CW82042023_162031.pdf

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