FACTS OF THE CASE

The present writ petition was filed challenging the order dated 15.04.2023 passed under Section 148A(d) of the Income Tax Act, 1961 along with the consequential notice issued under Section 148 of the Act for Assessment Year 2019–20.

The petitioner contended that despite specifically requesting a personal hearing in its response dated 30.03.2023, the same was not granted before passing the impugned order.

 ISSUES INVOLVED

  1. Whether failure to grant a personal hearing under Section 148A(d) amounts to violation of principles of natural justice.
  2. Whether the order passed under Section 148A(d) and consequential notice under Section 148 is sustainable in law without granting such opportunity.

  PETITIONER’S ARGUMENTS

The petitioner argued that the impugned order was passed in breach of principles of natural justice.

  • It was submitted that a specific request for personal hearing was made in the reply dated 30.03.2023.
  • Despite such request, no opportunity of hearing was granted before passing the order under Section 148A(d).

 RESPONDENT’S ARGUMENTS

  • The Revenue, through its counsel, fairly conceded that there was a breach of principles of natural justice in the present case.

 COURT’S FINDINGS / ORDER

  • The Delhi High Court observed that principles of natural justice had been violated.
  • The Court set aside:
    • The order passed under Section 148A(d), and
    • The consequential notice issued under Section 148.
  • Liberty was granted to the Assessing Officer to proceed afresh in accordance with law.

 IMPORTANT CLARIFICATION BY COURT

  • Even at the stage of proceedings under Section 148A(d), if an assessee requests a personal hearing, the same must be granted.
  • Non-compliance with such request renders the proceedings vulnerable to challenge on grounds of violation of natural justice.

 SECTIONS INVOLVED

  • Section 148A(d), Income Tax Act, 1961 – Order for initiation of reassessment
  • Section 148, Income Tax Act, 1961 – Issue of notice for reassessment

Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/60831052023CW78612023_162628.pdf

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