Facts of the Case

The petitioner, Ghanshyam Das Gupta, filed multiple writ petitions challenging assessment orders passed under Sections 153A and 143(3) of the Income Tax Act, 1961, along with consequential notices of demand under Section 156 and penalty notices under Section 274 read with Section 271(1)(c).

The impugned orders were issued in June 2021 for Assessment Years 2013–14 to 2019–20. The petitioner contended that he did not receive a proper opportunity to respond to notices dated 21 April 2021 due to confusion arising from an email communication suggesting an extension of time during the COVID-19 lockdown in Delhi.

It was argued that the lockdown (April–June 2021) prevented effective compliance and submission of relevant documents.

Issues Involved

  1. Whether the assessment orders were passed in violation of principles of natural justice.
  2. Whether sufficient opportunity of hearing was granted to the petitioner before passing assessment orders.
  3. Whether ambiguity in communication by the Income Tax Department regarding extension of time prejudiced the petitioner.

Petitioner’s Arguments

  • The assessment orders were passed without granting an effective opportunity of hearing.
  • The petitioner relied on an email communication dated 21 April 2021 indicating extension of time without specifying a deadline.
  • Due to the COVID-19 lockdown in Delhi, the petitioner could not file responses or produce documents.
  • The denial of opportunity caused serious prejudice, including substantial tax demands and penalty proceedings.
  • The petitioner had relevant documents which could have clarified the issues raised by the Assessing Officer.

Respondent’s Arguments

  • The Revenue contended that valid notices dated 21 April 2021 had been issued.
  • It was argued that the subsequent email suggesting extension was not issued by the respondent authority.
  • According to the respondent, compliance with principles of natural justice was sufficient if original notices were considered.

Court’s Findings

  • The Court observed that even if the respondent’s version was accepted, the petitioner did not get sufficient opportunity to respond.
  • The COVID-19 lockdown period and ambiguity in communication were significant factors affecting compliance.
  • The Court held that principles of natural justice were not adequately complied with.
  • The petitioner was deprived of a fair chance to present documents and explanations before the Assessing Officer.

Court Order / Final Decision

  • The impugned assessment orders dated 09 June 2021 and 10 June 2021 were set aside.
  • The matter was remanded back to the Assessing Officer for fresh assessment.
  • Directions issued:
    • Petitioner to file responses within two weeks.
    • Assessing Officer to pass a reasoned order after granting proper hearing.
    • Petitioner to appear before the authority on the specified date.
  • All writ petitions were disposed of accordingly.

Important Clarification by the Court

  • Even procedural compliance is insufficient if effective opportunity is not provided.
  • Lockdown conditions and administrative ambiguity must be considered while evaluating compliance.
  • Natural justice requires real and meaningful hearing, not merely issuance of notices.

Sections Involved

  • Section 153A – Assessment in case of search or requisition
  • Section 143(3) – Regular assessment
  • Section 156 – Notice of demand
  • Section 274 read with Section 271(1)(c) – Penalty proceedings
  • Section 142(1) – Inquiry before assessment

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2021:DHC:2014-DB/MMH09072021CW62782021_093041.pdf

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