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Aten Capital Private Limited vs Assistant Commissioner Of Income Tax - (High Court of Delhi) (18 May 2022)

Before making an order under Section 148A(d) of the IT Act, Assessing Officer has to consider the reply of the Assessee in response to the notice

MANU/DE/1779/2022

Direct Taxation

Present writ petition has been filed challenging the order passed under Section 148A(d) and the notice issued under Section 148 of the Income Tax Act, 1961 (IT Act). Learned counsel for the Petitioner states that, the impugned order has been passed in complete violation of the principles of natural justice as well as the statutory mandate incorporated in Section 148A(c) and (d) of IT Act as the reply furnished by the Petitioner was not taken into consideration and an adverse inference was wrongly drawn against the Petitioner.

Present Court is of the view that even if the re-assessment was being done for verification in accordance with Explanation 1 to Section 148 of IT Act, nothing prevented the Assessing Officer from conducting an enquiry with respect to the said information in accordance with Section 148A(a) of the IT Act. In any event, it was all the more necessary in the present case for the Assessing Officer to thoroughly scrutinise the contentions and submissions advanced by the Petitioner-assessee before passing an order under Section 148A(d) of the ITAct.

In the present case, the Petitioner has placed on record an acknowledgement of the reply dated 4th April, 2022 received by him from the e-filing Portal of the Income Tax Department. From the said acknowledgment number, it is apparent that the Petitioner had filed its reply on 4th April, 2022.

Since the impugned order under Section 148A(d) has been passed on 5th April, 2022 i.e. after receipt of the detailed reply of the Petitioner dated 4th April, 2022, the Assessing Officer should have considered the same as it was available on record. By not considering the reply of the Petitioner, the mandate of Section 148A(c) of IT Act has been violated as it casts a duty on the Assessing Officer, by using the expression 'shall' to consider the reply of the petitioner/assessee in response to the notice under Section 148A(b) before making an order under Section 148A(d) of the IT Act.

In fact, this Court in Fena Pvt. Ltd. vs. ACIT Circle 7-1 & Anr., had quashed the order passed under Section 148A(d) of the Act in similar circumstances i.e. where Assessing Officer had not taken into consideration the replies along with the documents/evidences filed by the assessee before passing the order under Section 148A(d) of the IT Act. The impugned order under Section 148A(d) of IT Act and the notice issued under Section 148 of the Act both dated 5th April, 2022 are quashed and set aside. The matter is remanded back to the Assessing Officer to pass a reasoned order in accordance with law. Petition disposed off.

Tags : ASSESSMENT   NOTICE   REPLY THERETO  

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