Facts of the Case

The petitioner, Sanskriti Exim Pvt. Ltd., challenged multiple assessment orders passed for six different Assessment Years (2014–15 to 2019–20).

  • The Assessing Officer (AO) issued notices under Section 153C granting 30 days to file returns.
  • Subsequently, notices under Section 142(1) were issued requiring submission of documents within just 2 days.
  • The petitioner requested reasonable time (30 days) to comply.
  • Despite this, the AO passed assessment orders dated 28.03.2023 under Sections 153C read with 144, along with demand notices under Section 156.

The petitioner approached the High Court alleging violation of principles of natural justice.

Issues Involved

  1. Whether providing only 2 days to furnish documents for multiple assessment years violates principles of natural justice.
  2. Whether assessment orders passed without granting reasonable opportunity are legally sustainable.
  3. Whether contradictory timelines (30 days vs 2 days) invalidate proceedings.

Petitioner’s Arguments

  • The timeline of 2 days to respond to notices for six assessment years was arbitrary and impractical.
  • The AO had already granted 30 days under Section 153C, creating inconsistency.
  • Passing assessment orders without adequate opportunity amounted to gross violation of natural justice.
  • Requested that assessment orders and consequential demand notices be quashed.

Respondent’s Arguments

  • The Revenue proceeded based on available records.
  • It was argued that the matter could be adjudicated without filing counter-affidavits.
  • The assessment orders were justified based on procedural compliance.

Court Findings / Order

  • The AO imposed an unreasonably short timeframe, making compliance practically impossible.
  • Expecting the petitioner to compile information for six years within two days was unfair and arbitrary.
  • There was a clear breach of principles of natural justice.

Final Order

  • Assessment orders dated 28.03.2023 were set aside.
  • Demand notices under Section 156 were also quashed.
  • Matter remanded back to AO for fresh proceedings.
  • Petitioner granted 3 weeks to respond.
  • AO directed to:
    • Provide relevant material to petitioner
    • Grant personal hearing before passing fresh order

Important Clarifications by Court

  • Notices under Section 142(1) were not quashed, but proceedings must restart from that stage.
  • AO must ensure fair opportunity and transparency.
  • Personal hearing is mandatory before final decision.

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS19052023CW67562023_133030.pdf

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