Facts of the Case

  • The petitioners challenged reassessment proceedings for Assessment Year 2016–17.
  • The Assessing Officer passed orders under Section 148A(d) dated 29.07.2022 and 30.07.2022.
  • Petitioners had submitted detailed replies dated 06.06.2022 raising factual and legal defenses.
  • They specifically requested a personal hearing for further clarification.
  • No such hearing was granted before passing the impugned orders.
  • Despite an interim order of the Court restraining coercive action, the Assessing Officer proceeded to pass assessment orders and issued demand notices.

Issues Involved

  1. Whether failure to provide a personal hearing violates principles of natural justice in proceedings under Section 148A(d).
  2. Whether reassessment orders and consequential notices are sustainable when procedural safeguards are not followed.
  3. Whether actions taken despite interim court protection are legally valid.

Petitioner’s Arguments

  • The impugned orders were passed without granting a personal hearing despite specific request.
  • This amounted to violation of principles of natural justice.
  • Replies submitted were not properly considered.
  • The Assessing Officer acted arbitrarily and in haste.
  • Passing assessment orders despite interim protection of the Court was improper and unsustainable.

Respondent’s Arguments

  • The Revenue, through its counsel, fairly submitted that:
    • Considering the grievance raised, the appropriate course would be to set aside the impugned orders.
    • Fresh proceedings may be initiated after granting proper opportunity of hearing.

Court Order / Findings

  • The Court set aside:
    • Orders passed under Section 148A(d)
    • Consequent notices issued under Section 148
  • It held that:
    • Failure to grant personal hearing warranted interference.
  • The Court further directed:
    • Liberty to the Assessing Officer to pass fresh orders under Section 148A(d).
    • Mandatory grant of personal hearing before passing such orders.
  • Consequently:
    • The assessment orders and demand notices automatically collapsed.

Important Clarification

  • Personal hearing is a crucial procedural safeguard in reassessment proceedings when specifically requested.
  • Orders passed in violation of natural justice are liable to be set aside.
  • Authorities must strictly comply with procedural fairness under Section 148A.
  • Any action taken contrary to interim judicial orders may not sustain.

 Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/RAS11072023CW60612023_114915.pdf

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