Facts of the Case

  • Notice dated 19.03.2022 issued under Section 148A(b),
  • Corrigenda dated 29.03.2022 and 31.03.2022,
  • Order dated 06.04.2022 under Section 148A(d),
  • Reassessment notice dated 06.04.2022 under Section 148 for AY 2015–16.
  • A detailed reply was filed on 06.04.2022 at 4:17 PM,
  • However, the order under Section 148A(d) was passed the same day at 9:25 PM,
  • The Assessing Officer incorrectly recorded that no reply had been filed.

The petitioner also sought adjournment citing age (70 years) and the medical condition of her husband (77 years, bedridden and suffering from depression), who managed her tax affairs.

Issues Involved

  1. Whether passing an order under Section 148A(d) without considering the assessee’s reply violates principles of natural justice?
  2. Whether the Assessing Officer is mandatorily required to consider the reply under Section 148A(c)?
  3. Whether reasonable opportunity of hearing must be granted, especially in justified circumstances?

Petitioner’s Arguments

  • The impugned order was passed without considering the reply and supporting documents.
  • This amounted to violation of principles of natural justice.
  • Section 148A(c) mandates consideration of reply before passing order under Section 148A(d).
  • Reliance placed on Fena Pvt. Ltd. v. ACIT, W.P.(C) 6553/2022, where similar action was quashed.

Respondent’s Arguments

  • The petitioner had sought adjournments on multiple occasions (25.03.2022, 29.03.2022, and 04.04.2022).
  • Adequate opportunities had already been granted.

Court Findings / Order

  • The assessee has a right to adequate time to file a reply.
  • Considering the petitioner’s age and circumstances, further time ought to have been granted.
  • Section 148A(b) permits up to 30 days (extendable) for filing a reply.
  • The reply filed by the petitioner was not considered, violating statutory mandate under Section 148A(c).

Final Order

  • The order dated 06.04.2022 under Section 148A(d) and notice under Section 148 were quashed and set aside.
  • Matter remanded back to the Assessing Officer.
  • AO directed to pass a fresh reasoned order after considering the reply within 8 weeks.

Important Clarification by Court

  • Time granted to assessee for reply under Section 148A(b) is excluded from limitation period under Section 149.
  • Authorities must strictly comply with procedural safeguards before initiating reassessment.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:1949-DB/MMH18052022CW74372022_175607.pdf

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