Facts of the Case

The petitioner challenged an order 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 revenue alleged that the petitioner had sold a property and received sale consideration amounting to ₹1,52,50,000/- which was not disclosed in her income. This information was obtained through the Non-Filing Monitoring System (NMS).

A notice under Section 148A(b) was issued, directing the petitioner to respond. The petitioner sought additional time and claimed to have filed a reply within the extended deadline. However, the Assessing Officer proceeded on the assumption that no reply had been filed and passed the impugned order. 

Issues Involved

  1. Whether the order passed under Section 148A(d) without considering the petitioner’s reply is valid in law.
  2. Whether such action violates the principles of natural justice.
  3. Whether reassessment proceedings under Sections 148A and 148 can continue when due opportunity was not effectively granted.

Petitioner’s Arguments

  • The petitioner contended that a reply to the notice under Section 148A(b) was duly uploaded within the stipulated time.
  • It was argued that the Assessing Officer failed to consider the reply and wrongly recorded that no response was filed.
  • This amounted to a clear violation of natural justice, as the petitioner was denied a fair opportunity of being heard.

Respondent’s Arguments

  • The Revenue initially proceeded on the basis that no reply had been submitted.
  • However, upon instructions, it was conceded that the petitioner’s reply was available on the designated portal.
  • The Revenue did not insist on filing a counter affidavit and argued based on existing records.

Court’s Findings / Order

  • The Court observed that the Assessing Officer incorrectly assumed that no reply had been filed.
  • This resulted in violation of principles of natural justice.
  • The Court held that such procedural lapse vitiates the reassessment proceedings.

Order

  • The impugned order under Section 148A(d) and the consequential notice under Section 148 were set aside.
  • Liberty was granted to the Assessing Officer to:
    • Pass a fresh order after considering the petitioner’s reply
    • Provide a personal hearing to the petitioner
  • The Court clarified that no opinion was expressed on the merits of the case. 

Important Clarification

  • The judgment reinforces that mere issuance of notice is not sufficient—proper consideration of the taxpayer’s reply is mandatory.
  • Any reassessment action under Sections 148A(d) and 148 must strictly comply with procedural fairness and natural justice.
  • Even technical or procedural errors by the Assessing Officer can render the entire reassessment invalid.

 Sections Involved

  • Section 148A(b) – Opportunity before issuing notice
  • Section 148A(d) – Order deciding whether it is a fit case for reassessment
  • Section 148 – Income escaping assessment

(All under the Income Tax Act, 1961)

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/60820092023CW123682023_141706.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.