Facts of the Case

The petitioner challenged an assessment order dated 18.05.2023 passed under Sections 147 read with 144B of the Income Tax Act for Assessment Year 2013–14. A show cause notice dated 08.05.2023 was issued proposing variation in taxable income, granting time till 10.05.2023 to respond.

The petitioner requested an adjournment on 09.05.2023 seeking time until 18.05.2023 to collect relevant material. However, this request was not considered, and when the petitioner attempted to file a response on 18.05.2023, the portal was already closed. Subsequently, the assessment order was passed on the same day without considering the petitioner’s response.

Issues Involved

  1. Whether passing an assessment order without considering an adjournment request violates principles of natural justice?
  2. Whether denial of reasonable opportunity under faceless assessment proceedings vitiates the assessment order?

Petitioner’s Arguments

  • The petitioner argued that the assessment order was passed in violation of natural justice.
  • It was submitted that insufficient time was granted to respond to the show cause notice.
  • The adjournment request made within time was ignored by the authorities.
  • The closure of the portal prevented submission of response, leading to denial of fair hearing. 

Respondent’s Arguments

  • The respondent/revenue chose not to file a counter affidavit.
  • The matter was argued based on available records.
  • No specific rebuttal was made to the factual assertions regarding denial of opportunity. 

Court’s Findings / Order

  • The Court acknowledged that the facts regarding adjournment request and inability to file response were undisputed.
  • It held that denial of opportunity to respond amounts to violation of principles of natural justice.
  • Without examining merits, the Court set aside the assessment order dated 18.05.2023.
  • Liberty was granted to the Assessing Officer to pass a fresh order after providing adequate opportunity to the petitioner.

Important Directions / Clarifications

  • Petitioner allowed to file response within three weeks.
  • Assessing Officer directed to reopen portal for submission.
  • Petitioner permitted to submit response via email as well.
  • Personal hearing to be granted with prior notice.
  • A reasoned (speaking) order must be passed thereafter.

Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/60829082023CW114102023_140709.pdf

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