Delhi High Court Quashes Reassessment Order Issued Without Considering The Reply Filed By The Assessee

The petitioner/assessee stated that the reassessment proceedings initiated by the department were void ab initio. The proceedings were initiated in the name of "Damian Estate Developers Private Limited", which was a non-existent entity as it had amalgamated with the petitioner company with effect from April 1st, 2016.

The petitioner relied on the decision of the Supreme Court in Pr. Commissioner of Income Tax v. Maruti Suzuki India Limited, in which it was held that the issuance of a notice to a non-existent company is a substantive illegality and not a procedural violation.

The petitioner contended that there was no information in respect of the escapement of income of the petitioner, which was an essential condition for taking an action under Section 148 of the Income Tax Act. Each and every amount/transaction mentioned in the show cause notice was appropriately disclosed and offered to tax while computing the taxable income of the petitioner in Assessment Year 2018-19. The order has been passed in violation of principles of natural justice without taking into consideration the reply filed by the petitioner.

The department submitted that the petitioner's reply was not taken into consideration while passing the impugned order under Section 148A (d) of the Income Tax Act.

The court directed the assessing officer to pass a fresh reasoned order in accordance with the law after considering the reply filed by the petitioner within eight weeks.

Case Title: Karida Real Estates Private Limited Versus ACIT

Citation: 2022 LiveLaw (Del) 546

Dated: 2.06.2022

Counsel For Appellant: Advocate Kavita Jha

Counsel For Respondent: Advocate Zoheb Hossain

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