Facts of the Case

  • The petitioner was issued notices dated 09.03.2023 for Assessment Years 2013–14 to 2019–20, granting 30 days to file returns.
  • Subsequently, notices dated 20.03.2023 under Section 142(1) were issued seeking information.
  • The petitioner responded on 22.03.2023, stating that only 2 days' time was insufficient and requested 30 days’ extension.
  • Despite this, the Assessing Officer passed assessment orders on 28.03.2023, before expiry of the original 30-day period (i.e., 08.04.2023).

Issues Involved

  1. Whether passing assessment orders before expiry of the time granted violates principles of natural justice.
  2. Whether adequate opportunity was provided to the assessee under Section 142(1).
  3. Whether such assessment orders are liable to be set aside.

Petitioner’s Arguments

  • There was a complete violation of principles of natural justice.
  • The Assessing Officer failed to respect the 30-day statutory time period granted earlier.
  • The time given under Section 142(1) notice was unreasonably short (2 days).
  • Assessment orders were passed prematurely, without granting fair opportunity.

Respondent’s Arguments

  • The Revenue proceeded with the assessment based on notices issued and information sought.
  • No elaborate counter affidavit was filed as the matter was taken up for final disposal with consent.

Court’s Findings / Order

  • The Court held that the Assessing Officer failed to adhere to the timeline provided in the notice dated 09.03.2023.
  • Passing assessment orders before expiry of granted time amounted to violation of natural justice.
  • Accordingly, the assessment orders dated 28.03.2023 were set aside. 

Important Clarifications by Court

  • Liberty granted to the Assessing Officer to conduct de novo assessment.
  • AO must:
    • Provide all relevant material to the petitioner.
    • Grant personal hearing.
    • Issue proper notice indicating date and time.
  • Petitioner directed to furnish required information within 3 weeks. 

Sections Involved

  • Section 142(1), Income Tax Act, 1961
  • Principles of Natural Justice

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/60802052023CW56392023_181146.pdf

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