Case Law Details
Wonder Bricks Vs PCIT (Delhi High Court)
Introduction: In a recent ruling, the Delhi High Court addressed a case related to the Income Tax Act, specifically concerning Assessment Year (AY) 2014-15. The petitioner raised concerns about the timing of the assessment order and the show cause notice, leading to a significant legal battle. This article provides a detailed analysis of the court’s decision and its implications for the parties involved.
Detailed Analysis: The dispute revolves around the petitioner’s claim that the assessment order dated 13.04.2023 was passed before the expiration of the time allocated to file a reply to the show cause notice, which was dated 31.03.2023. The notice had given the petitioner until 05.05.2023 at 15:49 hours to submit their response.
During the proceedings, Mr. Sanjeev Menon, the learned standing counsel representing the revenue, mentioned that he had not received a copy of the case papers. The court instructed the petitioner’s counsel to provide Mr. Menon with a copy of the case papers via email.
Mr. Menon indicated that he would return with instructions and, if necessary, a counter-affidavit to resist the petition. However, no counter-affidavit was filed by the revenue, leaving the petitioner’s claims unopposed.
As a result, the court accepted the petitioner’s assertions and determined that the assessment order had indeed been passed prematurely, as the record clearly showed. This verdict led to the court’s decision to set aside the assessment order.
The court granted liberty to the Assessing Officer (AO) to pass a fresh assessment order, but strictly in compliance with the law. To expedite the process, the petitioner was directed to file a reply to the show cause notice dated 31.03.2023 within four weeks of receiving the copy of the order passed by the court.
Conclusion: The Delhi High Court’s decision to quash the premature assessment order under the Income Tax Act for AY 2014-15 underscores the importance of procedural fairness and adherence to timelines in such cases. This ruling reaffirms the principle that tax assessments must follow due process and be executed within the boundaries of the law. It provides a valuable precedent for taxpayers and tax authorities to ensure that assessments are conducted fairly and in accordance with legal requirements.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. On 04.09.2023, we had heard the matter at some length and etched out, broadly, the grievance articulated on behalf of the petitioner. For convenience, the relevant parts of the order dated 04.09.2023 are set forth hereafter:
“2. This petition concerns Assessment Year (AY) 2014-15.
2.1 The preliminary ground on which the petitioner seeks to assail the assessment order dated 13.04.2023 is that although the show cause notice dated 31.03.2023 gave time to the petitioner/assessee to file a reply by 05.05.2023 15:49 hours, the impugned assessment order has been passed before that date.
3. Mr Sanjeev Menon, learned standing counsel, who appears on behalf of the respondent/revenue, says that he has not been served with a copy of the case papers.
4. Counsel for the petitioner will furnish a copy of the case papers to Mr Menon via email, in the course of the day.
5. Mr Menon says that he will return with instructions. If the instructions are received to resist the petition, a counter-affidavit will be filed before the next date of hearing.
6. List the matter on 03.10.2023.
7. Meanwhile, no precipitate action will be taken against the petitioner/assessee.”
2. As would be evident, we had granted Mr Sanjeev Menon, learned standing counsel, who appears on behalf of the respondent /revenue, time to return with instructions. It was made clear that if instructions are received to resist the writ petition, a counter-affidavit will be filed in the matter.
3. A counter-affidavit has not been filed. Therefore, the assertions made by the petitioner remain unrebutted.
4. Given the circumstances, the assertions made by the petitioner have to be accepted.
5. Clearly, the record shows that the impugned assessment order was passed before the time to file a reply to the show cause notice expired. The show cause notice was issued on 31.03.2023, giving time to the petitioner/assessee to file its reply by 05.05.2023 (15:49 hours), as noted on 04.09.2023. The impugned order was passed on 13.04.2023.
6. In these circumstances, we believe that the best way forward would be to set aside the assessment order.
7. It is ordered accordingly.
8. Liberty is, however, given to the Assessing Officer (AO) to pass a fresh assessment order, albeit, in accordance with the law.
9. To hasten the proceedings, the petitioner/assessee will file a reply to the show cause notice dated 31.03.2023 within four (4) weeks of receipt of the copy of the order passed today.
10. The present writ petition is disposed of in aforesaid terms.
11. Interim order dated 04.09.2023 shall stand vacated.
12. Consequently, CM No. 45616/2023 is closed.
13. Parties will act based on the digitally signed copy of the order.
