Ashok Jain vs Assessment Unit Income Tax Department New Delhi

Rajiv Shakdher, J

CM APPL. 27499/2023

Allowed, subject to just exceptions.

W.P.(C) 7079/2023 & CM No. 27498/2023 [Application filed on behalf of the petitioner seeking interim relief]

Issue notice.

Mr Gaurav Gupta, learned senior standing counsel, who appears on behalf of the respondent/revenue, accepts notice.

Given the direction that we propose to pass, Mr Gupta says that he does not wish to file a counter-affidavit in the matter, and he will argue the matter based on the record presently available with the court.

Therefore, with the consent of the counsel for parties, the writ petition is taken up for hearing and final disposal of the case, at this stage itself.

The record shows that the principal allegation against the petitioner is that he is involved in evasion of Value Added Tax (VAT), and that he has used bogus documents in this context.

According to the respondent/revenue, income amounting to Rs. 86,45,876/-, which was otherwise chargeable to tax, has escaped assessment. The petitioner, on the other hand, says that the allegation made against him does not relate to evasion of VAT, but VAT refund.

It is thus the assertion of the petitioner that VAT refund can never lead to escapement of income.

Be that as it may, record shows that a show cause notice dated 13.03.2023 was issued to the petitioner proposing variation in income. Evidently, petitioner sought extension of time, and made a request in that behalf, via communication dated 22.03.2023.

The petitioner sought accommodation on the ground that he would require time to gather and/or collate the relevant material.

As is evident, the Assessing Officer (AO), without dealing with the request of the petitioner for accommodation, has passed the impugned assessment order dated 12.04.2023, under Section 147 read with Section 144B of the Income Tax Act, 1961 [in short, “the Act”].

There was clearly a violation of principles of natural justice. The petitioner was entitled to know whether or not his request for accommodation was being entertained.

Having  regard  to the  aforesaid  circumstances, the impugned assessment order is set aside. The AO is, however, given liberty to pass a fresh order, if deemed necessary, albeit in accordance with the law.

The petitioner will file a reply to the notice issued under Section 148A(b) of the Act, within the four weeks of receipt of copy of the judgment.

Mr Gupta will ensure that access is given to the petitioner to upload the reply via the designated portal.

Needless to say since we have not examined the merits of the case, nothing stated hereinabove will impact the merits of the matter.

In view of the fact that the impugned assessment order has been set aside, all consequential notices, i.e., demand and penalty notice, will collapse.

The above captioned writ petition is disposed of, in the aforesaid terms.

Pending interlocutory application shall stand closed.

Parties will act based on the digitally signed copy of the order.