Facts of the Case

The petitioner challenged the validity of the order passed under Section 148A(d) and the consequential notice issued under Section 148 of the Income Tax Act dated 27 July 2022 for reopening the assessment for AY 2013–14.

The petitioner contended that the reassessment proceedings were initiated on the basis of certain material, including a sale deed, which was provided in a corrupted format and could not be accessed. Despite requesting the authorities to re-supply the relevant documents and information forming the basis of reassessment, the same were not furnished.

Issues Involved

  1. Whether an order passed under Section 148A(d) without supplying relevant material violates principles of natural justice.
  2. Whether a non-speaking order that fails to address the petitioner’s objections is legally sustainable.
  3. Whether reassessment proceedings can continue when foundational documents are not provided to the assessee.

Petitioner’s Arguments

  • The impugned order under Section 148A(d) was non-speaking and failed to consider the detailed objections raised.
  • The sale deed and other material relied upon by the department were not properly supplied, as the file was corrupted and inaccessible.
  • Repeated requests to furnish complete information and documents were ignored.
  • The failure to provide material deprived the petitioner of a meaningful opportunity to respond, violating principles of natural justice.

Respondent’s Arguments

  • The counsel for the Revenue, on instructions, stated that the Assessing Officer had no objection if the impugned order and notice were set aside.
  • It was assured that all relevant documents, including the sale deed, would be furnished to the petitioner within two weeks.

Court’s Findings / Order

  • The Delhi High Court set aside:
    • The order passed under Section 148A(d), and
    • The notice issued under Section 148
  • The Court directed:
    • The respondents to supply all relevant material, including the sale deed, within two weeks.
    • The Assessing Officer to reconsider the matter afresh and pass a reasoned (speaking) order under Section 148A(d) within four weeks thereafter.
  • The writ petition was accordingly allowed, and all rights and contentions were kept open.

Important Clarification

  • A reassessment order under Section 148A(d) must be a reasoned and speaking order.
  • Authorities are obligated to provide all relied-upon material to the assessee before proceeding with reassessment.
  • Failure to supply documents and pass a proper speaking order renders the proceedings unsustainable in law.

Sections Involved

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

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/MMH20102022CW148972022_165103.pdf

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