Facts of the Case

The present writ petition pertains to Assessment Year 2019–20. The petitioner contended that it did not receive the notice dated 04.03.2023 issued under Section 148A(b) of the Income Tax Act, 1961. It was specifically averred that no real-time alert or proper communication was provided to the petitioner regarding such notice.

Subsequently, the petitioner became aware of the proceedings only when the order dated 22.03.2023 under Section 148A(d) was furnished through an employee of its group company, following which the notice and order were downloaded from the e-filing portal.

Issues Involved

  1. Whether reassessment proceedings initiated without proper service of notice under Section 148A(b) are valid in law.
  2. Whether denial of opportunity to respond to the notice violates principles of natural justice.
  3. Whether the order under Section 148A(d) and consequent notice under Section 148 can be sustained in absence of proper notice.

Respondent’s Arguments

  • The respondent/revenue, upon query from the Court, fairly conceded that an opportunity could be granted to the petitioner to respond to the notice.
  • The respondent chose not to file a counter-affidavit and agreed to proceed based on the available record.

  Petitioner’s Arguments

  • The petitioner submitted that the notice issued under Section 148A(b) was never received.
  • It was argued that no real-time alert or communication mechanism ensured service of the notice.
  • The petitioner contended that it was deprived of an opportunity to respond, thereby violating principles of natural justice.
  • The subsequent order under Section 148A(d) was passed without granting a fair hearing. 

Court Order / Findings

  • The Delhi High Court set aside the order dated 22.03.2023 passed under Section 148A(d) of the Act.
  • Consequently, the notice issued under Section 148 of the Act also stood quashed.
  • The Court granted liberty to the Assessing Officer to pass a fresh order after providing an opportunity of hearing.
  • The petitioner was directed to file its reply to the notice under Section 148A(b) within four weeks.
  • The Assessing Officer was directed to pass a speaking order after granting a hearing.

Important Clarification

  • Proper service of notice under Section 148A(b) is mandatory before passing an order under Section 148A(d).
  • Absence of real-time communication or effective notice vitiates reassessment proceedings.
  • Principles of natural justice must be strictly adhered to in reassessment proceedings.
  • Even where proceedings have advanced, courts may restore the opportunity of hearing instead of adjudicating on merits.

 Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/60815052023CW62672023_122845.pdf

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