Facts of the Case

  • Notice dated 31 March 2022 issued under Section 148A(b),
  • Order dated 25 April 2022 passed under Section 148A(d), and
  • Notice issued under Section 148 for Assessment Year 2018–19.

It was contended that the Respondent initiated reassessment proceedings alleging non-filing of return and non-payment of taxes. However, the Petitioner asserted that the income in question had already been offered to tax.

A critical factual issue arose regarding service of notice — the notice requiring compliance by 18 April 2022 was actually delivered on 25 April 2022, i.e., the same date on which the order under Section 148A(d) was passed.

Issues Involved

  1. Whether reassessment proceedings under Sections 148 and 148A are valid when no effective opportunity of hearing is granted.
  2. Whether service of notice after the compliance deadline invalidates proceedings.
  3. Whether the order under Section 148A(d) can be sustained when the assessee had no chance to respond.

Petitioner’s Arguments

  • The notice under Section 148A(b) was received only on 25 April 2022, making compliance impossible before the deadline.
  • No opportunity of hearing was provided, violating Section 148A(b) and principles of natural justice.
  • The allegations of non-filing of return and non-payment of taxes were factually incorrect.
  • Income referred to by the Respondent had already been duly offered to tax.

Respondent’s Arguments

  • The Revenue acknowledged that the notice was received on the same date the order under Section 148A(d) was passed.
  • The Respondent did not object to setting aside the impugned order and notice.
  • It was submitted that the Assessing Officer would re-examine the matter thoroughly in light of the Petitioner’s submissions.

Court Order / Findings

The Delhi High Court held:

  • The impugned order under Section 148A(d) and notice under Section 148 were quashed.
  • The matter was remanded back to the Assessing Officer.
  • The Assessing Officer was directed to:
    • Decide the matter afresh within eight weeks,
    • Provide a proper opportunity of hearing,
    • Apply mind diligently to the material on record, including Form 15-CA and Petitioner’s submissions.

Important Clarification

  • Service of notice after the compliance deadline amounts to denial of opportunity of hearing.
  • Proceedings under Section 148A must strictly comply with principles of natural justice.
  • Mechanical passing of reassessment orders without verifying service of notice is unsustainable. .

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/case_number_pdf/2022:DHC:2528-DB/MMH08072022CW103612022_171157.pdf

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