Observing that awarding opportunity to other party for a personal hearing to put their case is neccessary, the Delhi High Court quahsed the assessment order under the Income Tax Act, 1961.
The Division Bench comprising of Justice Rajiv Shakdher and Justice Talwant Singh was adjudicating upon a writ petition against the assessment order issued under Section 143(3) read with Section 144B of the Income Tax Act, 1961 concerning assessment year 2018-19.
Inter-alia, challenge has also been laid to the notice of demand issued under Section 156 of the Income Tax Act, 1961, as well as notice issued for initiation of penalty proceedings under Section 270A of the Income Tax Act, 1961.
The legal question raised in the petition for the Court to settle was whether or not the principles of natural justice have been followed as required under Section 144B of the Income Tax Act?
The Court after considering the facts, stated that it is pertinent to note that the petitioner responded to the subject notice and while furnishing the necessary information, the petitioner also sought an opportunity for being heard in-person.
Concededly, the AO passed the impugned assessment order without granting an opportunity to the petitioner of a personal hearing in the matter, it added.
The Court observed that the provisions of Section 144B(7)(vii) of the Act would apply in this case and accodingly the notice of demand issued under Section 156 of the Act, and the notice issued for initiation of penalty proceedings under Section 270A of the Act, of even date, were set aside.
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