Facts of the Case

  • The petitioner, Pinki Tour and Travels Limited, challenged an order dated 31.03.2023 passed under Section 148A(d) of the Act.
  • The case pertains to Assessment Year 2016–17.
  • A notice under Section 148A(b) was issued on 22.03.2023.
  • The petitioner submitted a reply dated 27.03.2023 in response to the notice.
  • However, the Assessing Officer passed an order under Section 148A(d) on 31.03.2023 along with a consequential notice under Section 148.
  • The grievance of the petitioner was that its reply was not considered before passing the impugned order.

Issues Involved

  1. Whether an order passed under Section 148A(d) without considering the assessee’s reply is legally sustainable.
  2. Whether such non-consideration violates principles of natural justice.
  3. Whether the consequential notice under Section 148 can survive when the foundational order is defective.

Petitioner’s Arguments

  • The petitioner contended that:
    • The reply dated 27.03.2023 was duly filed in response to the notice under Section 148A(b).
    • The impugned order failed to consider this reply, rendering it arbitrary and illegal.
    • Such non-consideration amounts to violation of principles of natural justice, particularly the right to be heard.

Respondent’s Arguments

  • The Revenue (Income Tax Department) chose not to file a counter-affidavit.
  • It submitted that the matter could be argued based on the existing record.

Court’s Findings / Order

  • The Court observed that:
    • The impugned order under Section 148A(d) did not reflect consideration of the petitioner’s reply.
    • This omission was material and went to the root of the matter.
  • Accordingly, the Court held:
    • The order dated 31.03.2023 under Section 148A(d) is set aside.
    • The consequential notice under Section 148 is also quashed.
  • Liberty granted:
    • The Assessing Officer (AO) may pass a fresh order.
    • The AO must:
      • Provide an opportunity of hearing
      • Consider the petitioner’s reply dated 27.03.2023
      • Pass a reasoned (speaking) order

Important Clarification by the Court

  • The Court emphasized:
    • Consideration of the assessee’s reply is mandatory before passing an order under Section 148A(d).
    • Procedural fairness and adherence to natural justice are integral to reassessment proceedings.
    • Any lapse in this regard vitiates the entire reassessment process.

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS31072023CW100212023_115128.pdf

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