Facts of the Case

The present writ petition pertains to Assessment Year (AY) 2014–15. The petitioner, Wonder Bricks, challenged the validity of the assessment order dated 13.04.2023 on the ground that it was passed prematurely.

A show cause notice dated 31.03.2023 had granted time to the petitioner to file a reply until 05.05.2023 (15:49 hours). However, the Assessing Officer passed the impugned assessment order before the expiry of the said time limit.

Despite opportunity, the respondent (Revenue) failed to file a counter-affidavit to rebut the assertions made by the petitioner.

Issues Involved

  1. Whether an assessment order passed before expiry of the time granted to respond to a show cause notice is legally sustainable.
  2. Whether such premature action violates the principles of natural justice.

Petitioner’s Arguments

  • The petitioner contended that the assessment order was passed in violation of procedural fairness.
  • It was argued that sufficient time was explicitly granted in the show cause notice to file a reply, which had not expired at the time of passing the order.
  • Therefore, the impugned order was arbitrary, illegal, and liable to be set aside.

Respondent’s Arguments

  • The respondent sought time to obtain instructions but failed to file any counter-affidavit.
  • As a result, the petitioner’s assertions remained unrebutted before the Court.

Court Order / Findings

  • The record clearly demonstrated that the assessment order was passed on 13.04.2023, whereas the petitioner had time to respond until 05.05.2023.
  • Passing the assessment order before expiry of the response period was improper and unsustainable.
  • In absence of any rebuttal from the respondent, the petitioner’s claims were accepted.

Order:

  • The impugned assessment order was set aside.
  • Liberty was granted to the Assessing Officer to pass a fresh order in accordance with law.
  • The petitioner was directed to file its reply within four weeks.

Important Clarification

  • The Court did not adjudicate on the merits of the assessment.
  • The decision was strictly based on violation of procedural fairness and principles of natural justice.
  • The Revenue retains the right to re-assess the matter after granting proper opportunity of hearing.

 Sections Involved

  • Income Tax Act, 1961 (Assessment Proceedings)
  • Principles of Natural Justice (Audi Alteram Partem)

 Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/60803102023CW116872023_164109.pdf

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