High Court of Delhi Sets Aside Impugned Assessment Order and Remands Matter to Assessing Officer

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Case Name:

Lemon Tree Hotels Limited vs. National Faceless Assessment Centre Delhi & Anr.(High Court of Delhi)

W.P.(C) 5427/2021 & CM APPL. 16831/2021

Date: 18th August 2021

Key Takeaways:

1. The High Court set aside the impugned assessment order, notice of demand, and notice for initiation of penalty proceedings dated 22nd April 2021.

2. The matter was remanded back to the Assessing Officer for passing a fresh order after following due procedure.

3. The Assessing Officer was directed to grant an opportunity of hearing to the petitioner and thereafter pass a reasoned order in accordance with the law.

The case of Lemon Tree Hotels Limited vs. National Faceless Assessment Centre Delhi & Anr. was heard in the High Court of Delhi at New Delhi, and the judgment was delivered on August 18, 2021. The petitioner, Lemon Tree Hotels Limited, was represented by Mr. Rohit Jain, Advocate, along with Mr. Aniket D. Agrawal and Ms. Manisha Sharma, Advocates. The respondents, National Faceless Assessment Centre Delhi (earlier National e-Assessment Centre Delhi) & Anr., were represented by Ms. Vibhooti Malhotra, Advocate, along with Mr. Shailendra Singh and Mr. Udit Sharma, Advocates.

The petition challenged the impugned assessment order, notice of demand, and notice for initiation of penalty proceedings dated 22nd April 2021, issued under Section 143(3) (of Income Tax Act, 1961) read with Section 144B (of Income Tax Act, 1961), Section 156 (of Income Tax Act, 1961), and Section 274 (of Income Tax Act, 1961) read with Section 270A (of Income Tax Act, 1961) for the assessment year 2018-2019.

The petitioner contended that the impugned assessment order was passed in breach of the principles of natural justice, as a request for a personal hearing was made to respondent No. 1, via its designated e-portal, on 27th March 2021. It was argued that since the matter was complex in terms of facts and law, respondent No. 1 had an obligation to grant a personal hearing to the petitioner in terms of Section 144B(7)(vii) (of Income Tax Act, 1961). As the personal hearing was sought and not granted before passing the impugned assessment order, it was considered contrary to the law.

Ms. Vibhooti Malhotra, learned counsel for the respondents, stated that the respondents had no objection if the Court were to set aside the impugned order and remand the matter back to the Assessing Officer for passing a fresh order after following due procedure.

In light of the above, the High Court set aside the impugned assessment order, notice of demand, and notice for initiation of penalty proceedings dated 22nd April 2021, and remanded the matter back to the Assessing Officer. The Assessing Officer was directed to grant an opportunity of hearing to the petitioner and thereafter pass a reasoned order in accordance with the law.

The judgment was delivered by Hon’ble Mr. Justice Manmohan and Hon’ble Mr. Justice Navin Chawla.

FAQ:

Q1: What was the petition challenging?

A1: The petition challenged the impugned assessment order, notice of demand, and notice for initiation of penalty proceedings dated 22nd April 2021, issued under the Income Tax Act, 1961 for the assessment year 2018-2019.

Q2: What was the petitioner’s contention?

A2: The petitioner contended that the impugned assessment order was passed in breach of the principles of natural justice, as a request for a personal hearing was not granted before the order was passed.

Q3: What was the outcome of the case?

A3: The High Court set aside the impugned assessment order, notice of demand, and notice for initiation of penalty proceedings dated 22nd April 2021, and remanded the matter back to the Assessing Officer for a fresh order.

1. The petition has been heard by way of video conferencing.

2. Present writ petition has been filed challenging the impugned assessment order, notice of demand and notice for initiation of penalty proceedings dated 22nd April 2021, issued under Section 143(3) (of Income Tax Act, 1961) read with Section 144B (of Income Tax Act, 1961), Section 156 (of Income Tax Act, 1961) and Section 274 (of Income Tax Act, 1961) read with Section 270A (of Income Tax Act, 1961) [the Act] for the assessment year [AY] 2018-2019.

3. Learned counsel for the Petitioner states that the impugned Assessment order has been passed in breach of the principles of natural justice. He states that since the matter was complex in terms of facts and law, a request for personal hearing was made to respondent No. l, via its designated e-portal, on 27th.

4. He contends that Respondent no. l had an obligation to grant a personal hearing to the petitioner in terms of Section 144B(7)(vii) (of Income Tax Act, 1961) and since personal hearing was sought and was not granted by respondent no. l before passing the impugned assessment order, the same is contrary to law. March 2021.

5. Ms. Vibhooti Malhotra, learned counsel for the respondents, states that the respondents have no objection if this Court were to set aside the impugned order and remand back the matter to the Assessing Officer for

passing a fresh order after following the due procedure.

6. Keeping in view the aforesaid, the impugned assessment order, notice

of demand and notice for initiation of penalty proceedings dated 22nd April

2021, issued under Section 143(3) (of Income Tax Act, 1961) read with Section 144B (of Income Tax Act, 1961), Section 156 (of Income Tax Act, 1961) and

Section 274 (of Income Tax Act, 1961) read with Section 270A (of Income Tax Act, 1961) for the assessment year [AY]

2018-2019 are set aside and the matter is remanded back to the Assessing

Officer who shall grant an opportunity of hearing to the petitioner and

thereafter pass a reasoned order in accordance with law. With the aforesaid

direction, the present writ petition and pending application stand disposed

of.

7. The order be uploaded on the website forthwith. Copy of the order be

also forwarded to the learned counsel through e-mail

MANMOHAN, J

NAVIN CHAWLA, J

AUGUST 18, 2021