Delhi High Court
D.B Engineering Pvt. Ltd. vs National Faceless Assessment ... on 9 November, 2022
NEUTRAL CITATION NO : 2022/DHC/004895
$~18
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Decision delivered on: 09.11.2022
+ W.P.(C) 11754/2021
D.B ENGINEERING PVT. LTD. ......Petitioner
Through: Mr Jayant K. Mehta, Sr. Adv. with
Mr Samar Kachwaha, Mr
Raghavendra M. Bajaj, Mr Agnish
Aditya, Ms Shivangi Nanda, Ms
Kavita Vinayak, Mr Shagun Agarwal
and Ms Rini Mehra, Advs.
versus
NATIONAL FACELESS ASSESSMENT
CENTRE, DELHI & ANR. ......Respondents
Through: Mr Sanjay Kumar, Adv.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MS. JUSTICE TARA VITASTA GANJU
[Physical Hearing/Hybrid Hearing (as per request)]
RAJIV SHAKDHER, J. (ORAL):
1. The record shows, that on 22.10.2021, this matter was heard by one of
us [i.e., Rajiv Shakdher, J.] sitting with Hon'ble Mr Justice Talwant Singh.
1.1 On that date, the broad contours of the controversy arising in the
matter were etched out. For the sake of convenience, the relevant part of the
said order is extracted hereafter:
"3. Via this writ petition, in effect, challenge is laid to the
assessment order dated 28.09.2021, for the assessment year (AY)
2017-18.
3.1. Mr. Jayant Mehta, learned senior counsel, who appears for
the petitioner, has drawn our attention, inter alia, to paragraph
Signature Not Verified
Digitally Signed By:ATUL
Signing Date:16.11.2022
19:50:45
NEUTRAL CITATION NO : 2022/DHC/004895
nos. 8 and 8.1 of the impugned order.
3.2. For the sake of convenience, the said paragraphs of the
impugned assessment order, are extracted hereafter:-
"8. A showcause notice was issued to the assessee on
22/09/2021 along with Draft Assessment Order for
compliance on 24/09/2021. The assessee has given the reply
to showcause notice on 23/09/2021 along with Statement of
Sales partywise above 5 Lakhs with address and TIN
Number, Statement of partywise purchases above 5 Lacs
with address and PAN/TAN No., List of Debtors, Form
26AS, screen shot from website, List of Creditors, Purchase
of raw material partywise and (i) reply letter dated
16/08/2021 to Notice u/s. 142(1), dated 14/08/2021, (ii)
reply letter dated 23/09/2021 to showcause notice, dated
22/09/2021 & (iii) reply letter dated 5/09/2021 to Notice
u/s. 142(1) dated 3/9/21. The assessee's representative Ankit
P. Jain & Co., CAs vide letter dated 22/09/2021 in reply to
showcause notice has given the statement of opening and
closing stock for the last three year and further stated that,
"It is requested to allow video conferencing for some
crucial discussion in the matter and allow some time to
arrange more documents as asked in the letter. It is also
requested to keep the provisional Assessment under
abeyance and do not add any income till the Assessment is
complete and also requested to complete regular
Assessment as being undertaken by you as the Income Tax
Portal is not working Properly. "
8.1 The above request of the assessee could not be
granted due to paucity of time as the time barring date is
30/09/2021. The assessee was accorded various
opportunities to give the submissions but the assessee has
not given any reply. The onus was on the assessee to give
valid proof against the reopening proceedings to prove that
the discrepancies pointed out by the complainant in his
books of accounts are not correct. The assessee would have
given his submission and supporting documents well in
Signature Not Verified
Digitally Signed By:ATUL
Signing Date:16.11.2022
19:50:45
NEUTRAL CITATION NO : 2022/DHC/004895
advance after first Notice u/s. 142(1) was issued to the
assessee on 29/01/2021 and also, the assessee would have
given his reply with the supporting documents on
13/02/2021 when the assessee company has given part
reply."
3.3. A perusal of the aforementioned extract from the impugned
assessment order shows that, although, personal hearing was
sought, the same was declined only on account of paucity of time,
as the end date for passing the assessment order was expiring, on
30.09.2021.
4. Given the foregoing, prima facie, we are of the view that,
there is a case for interference, as there has been a breach of the
principles of natural justice.
5. Issue notice.
5.1 Ms. Easha Kadian, Advocate, who appears for Mr. Sanjay
Kumar, learned standing counsel, accepts notice on behalf of
respondents/revenue.
5.2. Counter-affidavit will be filed within four weeks from today.
5.3. Rejoinder thereto, if any, will be filed before the next date of
hearing.
6. Although, there is no separate application for grant of
interim relief, the prayer, to that effect, has been made in prayer
clause (f).
6.1. Accordingly, till the next date of hearing, the operation of
the assessment order dated 28.09.2021 as well as consequential
notices i.e., the demand notice and notice for penalty of even date,
shall remain stayed.
7. List the matter on 12.01.2022."
2. Since then, a counter-affidavit has been filed on behalf of the
respondents/revenue.
3. Mr Sanjay Kumar, who appears on behalf of the respondents/revenue,
says that there is no dispute about the fact, that although a personal hearing
was sought by the petitioner, the same was not granted, on account of
Signature Not Verified
Digitally Signed By:ATUL
Signing Date:16.11.2022
19:50:45
NEUTRAL CITATION NO : 2022/DHC/004895
paucity of time.
3.1 This aspect has been recorded in the impugned order, which, as would
be obvious, stands extracted in our order dated 22.10.2021.
4. Clearly, the denial of personal hearing is violative of the provisions of
Section 144B(6)(vii) of the Income Tax Act, 1962. For the sake of
convenience, the same is extracted hereafter:
"144B. Faceless assessment.
xxx xxx xxx
(6) For the purposes of faceless assessment-
xxx xxx xxx
(vii) in a case where a variation is proposed in the income or
loss determination proposal or the draft order, and an opportunity
is provided to the assessee by serving a notice calling upon him to
show cause as to why the assessment should not be completed as
per such income or loss determination proposal, the assessee or
his authorized representative, as the case may be, may request for
personal hearing so as to make his oral submissions or present his
case before the income-tax authority of the relevant unit."
5. The proposition, that personal hearing, if sought, is required to be
granted to the assessee, is no longer res integra, wherever variation is
proposed in the income or loss determination proposal or the draft order. In
the instant matter, the case concerns variation of income.
5.1 This covered by several judgments of this Court, including a
judgment rendered on 19.05.2021 in W.P.(C) No.5235/2021 titled Renew
Power Pvt. Ltd. v. National E-Assessment Centre, Delhi.
6. Mr Kumar fairly concedes, that this view has been reiterated in the
following judgments as well:
(i) Bharat Aluminium Company Ltd. v. Union of India, [2022] 134
taxmann.com 187 (Delhi).
Signature Not Verified
Digitally Signed By:ATUL
Signing Date:16.11.2022
19:50:45
NEUTRAL CITATION NO : 2022/DHC/004895
(ii) Sanjay Aggarwal v. National Faceless Assessment Centre Delhi
(2021) 436 ITR 180
7. In these circumstances, the impugned assessment order is set aside.
8. Liberty is, however, given to the respondents/revenue to take next
steps in the matter, albeit, as per law.
9. The writ petition is disposed of in the aforesaid terms.
RAJIV SHAKDHER, J
TARA VITASTA GANJU, J
NOVEMBER 9, 2022
aj
Click here to check corrigendum, if any
Signature Not Verified
Digitally Signed By:ATUL
Signing Date:16.11.2022
19:50:45
