Facts of the Case

  • The petitioner challenged:
    • Reassessment notice dated 31 March 2021
    • Assessment order dated 31 March 2022
  • The notice was emailed at 11:36 PM on 31 March 2021.
  • The petitioner argued that it should be treated as served on 01 April 2021.
  • A notice under Section 143(2) read with Section 147 was issued with a blank annexure, preventing proper response.
  • Objections filed by the petitioner on 14 March 2022 were not considered.
  • A show cause notice-cum-draft assessment order was uploaded on the same day with insufficient time to respond.

Issues Involved

  1. Whether reassessment proceedings were validly initiated under Section 148?
  2. Whether failure to provide adequate opportunity violated principles of natural justice?
  3. Whether non-consideration of objections invalidates the assessment order?
  4. Whether procedural lapses (blank annexure, short response time) vitiate proceedings?

Petitioner’s Arguments

  • Notice served effectively on 01 April 2021; thus covered by precedent in Mon Mohan Kohli case.
  • Notice under Section 143(2)/147 had a blank annexure, making compliance impossible.
  • Detailed objections were ignored before passing the assessment order.
  • Show cause notice allowed extremely limited response time and was not properly communicated.
  • Entire process violated principles of natural justice.

Respondent’s Arguments

  • Multiple opportunities were granted to the petitioner.
  • The petitioner responded only at the last moment.
  • Proceedings were conducted within statutory timelines.

Court’s Findings / Order

  • The Court held:
    • The reassessment proceedings were within limitation, hence not covered under Mon Mohan Kohli.
    • However, there was a clear violation of principles of natural justice:
      • Objections dated 14 March 2022 were not decided before issuing draft order.
      • Inadequate opportunity was provided to respond.
  • Order:
    • Assessment order and demand notice dated 31 March 2022 were set aside.
    • Matter remanded back to NFAC for fresh consideration of objections.
    • Authorities directed to proceed in accordance with law thereafter.

Important Clarification by Court

  • The Court expressly stated:
    • It has not adjudicated on the merits of the case.
    • All rights and contentions of parties are kept open.

Sections Involved

  • Section 148, Income Tax Act, 1961
  • Section 147, Income Tax Act, 1961
  • Section 143(2), Income Tax Act, 1961
  • Principles of Natural Justice

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:1427-DB/MMH20042022CW62592022_213353.pdf


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