Lokesh Food Private Limited v. National Faceless Assessment Centre, Delhi

1. Allowed, subject to just exceptions. W.P.(C) 6903/2023 & CM APPL. 26913/2023 [Application filed on behalf of the petitioner seeking interim relief]

2. Issue notice. 2.[1] Mr Shlok Chandra, learned senior standing counsel who appears on behalf of the respondent/revenue accepts notice.

3. In view of the directions that we propose to pass, Mr Chandra 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. 3.[1] Therefore, with the consent of learned counsel for the parties, the writ petition is taken up for hearing and final disposal, at this stage itself.

4. This writ petition concerns Assessment Year (AY) 2013-14. W.P.(C) 6903/2023 Pg. 2 of 3

5. The record shows, that the petitioner was subjected to scrutiny assessment, and an order dated 09.03.2016 was passed under Section 143(3) of the Income Tax Act, 1961 [in short, “Act”].

6. The reassessment proceedings, however, were triggered qua the petitioner via notice dated 30.06.2021 issued under Section 148 of the Act.

7. Pursuant to judgment rendered by the Supreme Court in Union of India vs Ashish Agarwal, [2022] 138 taxmann.com 64 (SC) the respondent/ revenue took recourse to the new regime, as provided under Section 148A of the Act. Accordingly, the notice dated 18.05.2022 was issued to the petitioner under Section 148A(b) of the Act. The petitioner filed a response to the same. The petitioner’s reply is dated 02.06.2022.

8. The principal allegation against the petitioner is, that it is a beneficiary of bogus accommodation entries. The respondent/revenue has, thus, concluded that income amounting to Rs. 1,95,82,454/- which remains unexplained, has escaped assessment.

9. We may note, that the petitioner has taken the stand, that these very aspects were examined in the Section 143(3) proceedings. The record shows, that the petitioner was issued a notice on 04.03.2023, proposing variation in income disclosed by it. For this purpose, the petitioner was granted time to file a response by 12:11 hours of 08.03.2023.

10. Evidently, the petitioner, on that very date i.e., 04.03.2023 lodged a request for hearing via video-conferencing (VC); as according to it, the issue raised required explanation.

11. The Assessing Officer (AO), however, appears to have disregarded the request, and proceeded to pass the impugned assessment order dated 25.03.2023 under Section 147 read with Section 144B of the Act.

12. Mr Mudit Bansal, counsel for the petitioner says, that there has been a breach of principles of natural justice. It is contended, that petitioner had specifically asked for a hearing albeit via VC, on the day when the show-cause notice was issued i.e., on 04.03.2023.

13. This position cannot but be accepted by Mr Chandra, in view of the record that has been placed before the Court. Thus, having regard to the aforesaid position, the W.P.(C) 6903/2023 Pg. 3 of 3 impugned assessment order dated 25.03.2023 is set aside. Consequently, the order passed under Section 148A(d), as also the consequential notice issued under Section 148 will collapse.

14. Liberty is, however, given to AO to pass a fresh order. However, before the AO proceeds to do so, he will issue a notice, indicating the date and time when hearing will be held, albeit via VC.

15. Needless to add, the AO will pass a speaking order; a copy of which will be furnished to the petitioner.