Facts of the Case

The present writ petition pertains to Assessment Year (AY) 2016–17. The petitioner, Jagriti Yadav, was subjected to reassessment proceedings on the allegation that she had made unaccounted cash deposits amounting to ₹78,30,015.

The reassessment was initiated on the premise that the petitioner was a “non-filer” of income tax returns. However, the petitioner contended that:

  • The said cash deposits were duly disclosed in her return for AY 2016–17.
  • The Assessing Officer (AO) relied upon a Permanent Account Number (PAN) that had already been surrendered.
  • Detailed responses dated 10.03.2023 and 22.03.2023 were filed addressing the allegations.

Despite this, the AO passed an order dated 23.03.2023 under Section 148A(d) without properly considering the petitioner’s replies.

Issues Involved

  1. Whether reassessment proceedings can be sustained when initiated on an incorrect factual premise (i.e., treating the petitioner as a non-filer).
  2. Whether an order under Section 148A(d) is valid if the Assessing Officer fails to consider the taxpayer’s response.
  3. Whether non-consideration of replies amounts to violation of principles of natural justice.

Petitioner’s Arguments

  • The reassessment was initiated on a factually incorrect assumption that the petitioner had not filed returns.
  • The cash deposits were already disclosed in the income tax return.
  • The AO relied on an invalid/surrendered PAN, vitiating the proceedings.
  • The response dated 10.03.2023 was available before passing the order but was ignored.
  • The principles of natural justice were violated due to non-consideration of submissions.

Respondent’s Arguments

  • The Revenue relied on the existing records available before the Court.
  • It was submitted that no counter-affidavit was required, and the matter could be decided based on available material.

Court Findings / Order

The Court observed:

  • At least one of the replies filed by the petitioner was available with the AO before passing the impugned order.
  • The AO failed to consider the petitioner’s response, which is a procedural lapse.

Order:

  • The order dated 23.03.2023 passed under Section 148A(d) was set aside.
  • The matter was remanded back to the Assessing Officer.
  • The AO was directed to:
    • Provide an opportunity of hearing.
    • Consider all responses filed by the petitioner.
    • Pass a fresh speaking order.

The Court clarified that it had not examined the merits of the case.

Important Clarification by Court

  • The remand does not prejudice either party.
  • The Assessing Officer is free to proceed in accordance with law.
  • The requirement of a “speaking order” was emphasized.
  • Compliance with natural justice principles is mandatory in reassessment proceedings.

Link to download the order -

https://delhihighcourt.nic.in/app/showFileJudgment/RAS13072023CW91982023_191427.pdf

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