Facts of the Case

  • The case pertains to Assessment Year 2019–20.
  • A notice dated 14.03.2023 was issued under Section 148A(b).
  • The petitioner filed a reply on 30.03.2023.
  • The Assessing Officer passed an order dated 15.04.2023 under Section 148A(d).
  • Consequential notice under Section 148 was also issued on the same date.
  • The petitioner contended that its reply was not considered before passing the order.

 Issues Involved

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

Petitioner’s Arguments

  • The petitioner argued that:
    • A detailed reply was filed in response to notice under Section 148A(b).
    • The Assessing Officer failed to consider the reply while passing the order under Section 148A(d).
    • Such non-consideration renders the order arbitrary and violative of natural justice.
    • Consequently, the notice under Section 148 is also liable to be quashed.

 Respondent’s Arguments

  • The Revenue fairly conceded that:
    • The petitioner’s reply was not taken into account by the Assessing Officer.
  • The matter was argued based on the existing record without filing a counter-affidavit.

 Court’s Findings

  • The Court observed:
    • The reply filed by the petitioner was not considered while passing the order under Section 148A(d).
    • This position was accepted by the Revenue.
  • The Court held:
    • Non-consideration of reply vitiates the order.
    • The proper course is to set aside such an order.

 Court Order

  • The Delhi High Court:
    • Set aside the order dated 15.04.2023 passed under Section 148A(d).
    • Held that the consequential notice under Section 148 will collapse.
    • Granted liberty to the Assessing Officer to proceed afresh in accordance with law.

 Important Clarification

  • Even though the proceedings were quashed:
    • The Assessing Officer is not barred from initiating fresh action, provided due process is followed.

 Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/60831052023CW78372023_162233.pdf

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