Facts of the Case

The petitioner, Standard Chartered Bank UK, challenged:

  • Notice dated 31.03.2023 issued under Section 148A(b)
  • Order dated 03.05.2023 under Section 148A(d)
  • Consequential notice under Section 148

The reassessment was initiated on the basis of alleged receipt of ₹156.15 crore as income/fees for technical services from Vodafone Mobile Services Ltd.

The petitioner:

  • Filed a reply within time (26.04.2023)
  • Raised objections regarding lack of jurisdiction and non-supply of material

However, the Assessing Officer passed the order without considering the reply.

Issues Involved

  1. Whether reassessment proceedings are valid when:
    • The reply of the assessee is not considered
  2. Whether reassessment is sustainable without:
    • Furnishing underlying material to the assessee
  3. Whether notice issued by an officer lacking jurisdiction is valid

 Petitioner’s Arguments

  • The notice was issued by an officer without jurisdiction, as the original assessment was completed in Mumbai
  • The material/information relied upon was not provided, violating principles of natural justice
  • The reply submitted was not considered at all before passing the order under Section 148A(d)

 Respondent’s Arguments

  • Revenue relied on material indicating receipt of substantial income
  • Argued based on available records without filing counter affidavit
  • Contended that reassessment was validly initiated

 Court’s Findings / Order

  • The Assessing Officer failed to consider the petitioner’s reply, which is mandatory
  • This constitutes a violation of principles of natural justice
  • Consequently:
    • Order under Section 148A(d) dated 03.05.2023 set aside
    • Notice under Section 148 quashed

However, the Court granted liberty to the Revenue:

  • To pass a fresh order
  • Subject to:
    • Furnishing material/information to the petitioner
    • Granting opportunity to file response
    • Providing personal hearing
    • Passing a reasoned (speaking) order

Important Clarifications by the Court

  • Consideration of reply under Section 148A(b) is mandatory, not procedural formality
  • Non-supply of material violates natural justice
  • Reassessment must be conducted with due application of mind
  • Personal hearing and speaking order are essential safeguards

Link to download the order - 

https://delhihighcourt.nic.in/app/showFileJudgment/RAS21072023CW96062023_142301.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.