Facts of the Case

The present writ petition was filed by the petitioner challenging the validity of the notice dated 30.06.2021 issued under Section 148 of the Income Tax Act, 1961. Additionally, the petitioner also challenged the subsequent show cause notice dated 02.06.2022, the order dated 30.07.2022 passed under Section 148A(d), and the consequential notice issued under Section 148 on the same date.

The case pertains to Assessment Year 2015–2016. The petitioner, in response to the show cause notice, had specifically requested a personal hearing if the Assessing Officer intended to proceed further in the matter.

However, despite such request, no personal hearing was granted before passing the order under Section 148A(d).

Issues Involved

  1. Whether the order passed under Section 148A(d) without granting a personal hearing is valid in law.
  2. Whether the consequential notice issued under Section 148 can survive when the foundational order is procedurally defective.
  3. Whether denial of personal hearing violates principles of natural justice in reassessment proceedings.

Petitioner’s Arguments

  • The petitioner contended that a specific request for personal hearing was made in the reply dated 24.06.2022.
  • Despite such request, the Assessing Officer failed to grant a personal hearing before passing the order under Section 148A(d).
  • It was argued that this omission amounts to violation of principles of natural justice and renders the entire proceedings invalid.

Respondent’s Arguments

  • The Revenue accepted notice and chose not to file a counter-affidavit at that stage.
  • The matter was taken up for final disposal with the consent of both parties.

Court Order / Findings

  • The Delhi High Court observed that the petitioner had clearly sought a personal hearing.
  • The Court held that no personal hearing was granted before passing the order under Section 148A(d).
  • Consequently, the order dated 30.07.2022 under Section 148A(d) and the notice issued under Section 148 were set aside.
  • The matter was remitted back to the Assessing Officer for fresh consideration (de novo exercise).
  • The Assessing Officer was directed to grant a personal hearing and issue a proper notice indicating date and time.

Important Clarification

The Court clarified that all defences available to the assessee shall remain open, in line with the principles laid down in Union of India v. Ashish Aggarwal (2022 SCC OnLine SC 543).

Sections Involved

  • Section 148 – Income escaping assessment
  • Section 148A(d) – Order prior to issuance of notice

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/59021122022CW174572022_191241.pdf

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