The Delhi High Court in the case Aphv India Investco. Private Limited Versus ACITobserved and has quashed the orders of draft assessment, the final assessment orders, and consequential demand on the grounds that the assessing officer inadvertently overlooked the email reply of the assessee, in which the assessee disclosed the vital facts which pertains to the said case.
The bench comprising of Justice Rajiv Shakdher and Justice Girish Kathpalia in the case obserevd and has stated that the denial of sufficient time to respond was not just an abrogation of jus naturale but also infringed clause B(1) of the Standard Operating Procedure dated 19.11.2020 of the CBDT, according to which normally a response time of 15 days has to be given to the assessee in order to respond to the notice issued under Section 142 of the Income Tax Act.
Itahs also been submitted by the respondent or department that several notices issued under Section 148 and Section 142(1), as well as a show cause notice before making a best judgment assessment were being issued to the petitioner.
It has been before the court that as per the petitioner or assessee, none of the notices except the notice dated 12.07.2022, issued under Section 142(1) were received by it.
Therefore, the petitioner also explained that the brief reply to the notice dated 12.07.2022 was being sent wherein it requested an extension of time till 05.08.2022 for filing a detailed reply, clarifying that none of the earlier notices had been received.
The Assessing Officer in the case had already passed the order of draft notice based on best judgment, which did not acknowledge the brief reply filed on behalf of the petitioner. On the lines of the draft assessment order.
The court while considering the facts and circumstances of the case stated that the assessment orders, the draft assessment orders, and the consequential demand notices are clearly afflicted by two vices:
Firstly, the assessing officer inadvertently overlooked the email reply dated 20.07.2022 from the petitioner. Secondly, the Assessing Officer denied the assessee sufficient time to respond. The counsel, Kamal Sawhney appeared for the petitioner. The counsel, Ruchir Bhatia represented the respondent.