In a major relief to Indus Towers, the Delhi High Court quashed assessment order under the Income Tax Act, 1961 on non compliance of natural justice.
The grievance of the petitioner is that contrary to the proposal, via the impugned order dated 01.09.2023, the respondents/revenue have adjusted demands not only for AY 2018-19, which was one of the proposals, but also for AY 2017-18.
In sum, it is the petitioner’s case that there has been a breach of principles of natural justice inasmuch as the respondents/revenue have moved away from what was proposed in the two emails.
Rohit Jain, learned counsel, who appears on behalf of the petitioner/assessee, says that the proposal communicated to the petitioner which is contained in two emails of even date i.e., 28.08.2023 indicated that the refund due to the petitioner for Assessment Year (AY) 2022-23 be adjusted against demands raised in AY 2021-22 and AY 2018-19.
A Division Bench of Justice Rajiv Shakdher and Justice Girish Kathpalia observed that “The infraction of principles of natural justice is also sought to be buttressed by emphasising the point that although the petitioner was given twenty-one (21) days to respond to the first of the above-captioned emails concerning adjustment qua demand concerning AY 2021-22, the impugned order was passed within four (4) days.”
“There are several other issues as well, which Mr Jain has raised before us, including the fact that the demand for AY 2022-23 has been stayed by this court vide order dated 21.08.2023 passed in W.P.(C) 11037/2023. Therefore, in our view, the best way forward would be to set aside the impugned order dated 01.09.2023, with liberty given to the concerned officer to take the next steps in the matter, albeit, as per law” the Court noted.
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