A division bench of the Delhi High Court has quashed an income tax notice and an assessment order on the ground that a personal hearing was not allowed to the assessee.
Before the High court, the assessee, an individual, challenged the assessment order dated 07.06.2021, issued under Section 143(3) read with Section 144B of the Income Tax Act, 1961making an addition of Rs.7,34,28,895/- treating the same as Other Income. The addition in the petitioner’s income was proposed on account of interest received by him from the Land Acquisition Collector (LAC) on enhanced compensation for acquisition of his land. The consequential penalties were also imposed by the department based on the assessment.
The assessee contended before the Court that an opportunity of personal hearing was not allowed to the assessee before passing the order.
The division bench comprising Justice Rajiv Shakdher and Justice Jasmeet Singh relied on the decision in RitnandBalved Education Foundation (Umbrella Organization of Amity Group of Institutions) v. National Faceless Assessment Centre &Ors, wherein it was held that since the statute itself makes the provision for grant of personal hearing, the department cannot veer away from the same.
Allowing relief to the assessee, the Court held that “The impugned assessment order dated 07.06.2021, as well as consequential notices i.e., 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, are set aside.”
OMKAR NATH vs NATIONAL FACELESS ASSESSMENT CENTRE DELHI (EARLIER NATIONAL E-ASSESSMENT CENTRE DELHI) & ANR.
CITATION: 2022 TAXSCAN (HC) 137
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