Facts of the Case

The petitioner, IJM Dewas (Mauritius) Ltd., filed the present writ petition concerning Assessment Year 2019–20 challenging reassessment proceedings initiated by the Revenue.

The core grievance of the petitioner was that it did not receive the notice dated 04.03.2023 issued under Section 148A(b) of the Income Tax Act, 1961, and no real-time alert was provided through the e-filing portal.

Subsequently, the petitioner became aware of the proceedings only when an employee of its group company accessed and downloaded the order dated 22.03.2023 passed under Section 148A(d) and the consequential notice issued under Section 148 after creating login credentials on the portal.

 Issues Involved

  1. Whether reassessment proceedings can be sustained when the assessee did not receive notice under Section 148A(b).
  2. Whether failure to provide a reasonable opportunity of being heard vitiates the reassessment order under Section 148A(d).
  3. Whether the consequential notice under Section 148 remains valid when the foundational order is defective.

 Petitioner’s Arguments

  • The petitioner contended that no notice under Section 148A(b) was effectively served.
  • It was argued that absence of real-time intimation deprived the petitioner of an opportunity to respond.
  • The petitioner emphasized violation of principles of natural justice, as no opportunity of hearing was granted before passing the order under Section 148A(d).
  • The reassessment proceedings were thus challenged as void and unsustainable in law.

 Respondent’s Arguments

  • The Revenue, through its counsel, did not insist on filing a counter-affidavit and agreed to proceed based on the existing record.
  • Upon query from the Court, the Revenue fairly conceded that a fresh opportunity could be granted to the petitioner to respond to the notice under Section 148A(b).

 Court Order / Findings

The Delhi High Court held as follows:

  • The order dated 22.03.2023 passed under Section 148A(d) was set aside.
  • Consequently, the notice issued under Section 148 also stood lapsed.
  • The Court granted liberty to the Assessing Officer to initiate fresh proceedings in accordance with law.
  • The petitioner was directed to file its reply to the notice under Section 148A(b) within four weeks.
  • The Assessing Officer was directed to:
    • Provide an opportunity of hearing,
    • Indicate date and time of hearing, and
    • Pass a speaking order thereafter.

Important Clarification

  • The Court did not adjudicate on the merits of the reassessment.
  • Relief was granted solely on procedural grounds, particularly violation of natural justice due to non-service of notice.
  • The judgment reinforces that effective service and opportunity to respond are mandatory under Section 148A(b) before proceeding with reassessment.

 Sections Involved

  • Section 148A(b), Income Tax Act, 1961
  • Section 148A(d), Income Tax Act, 1961
  • Section 148, Income Tax Act, 1961

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/60815052023CW62942023_122950.pdf

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