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Delhi High Court Nullifies Assessment Order Preceding Deadline for Response to Show Cause Notice

Last Updated on October 31, 2023 by News Desk

Issue: The Delhi High Court has overturned an assessment ruling that was issued before the petitioner’s deadline to reply to a show cause notice had expired.

Facts of the Case: The show cause notice was given on March 31, 2023, giving the petitioner (assessee) until May 5, 2023 to file their answer. Unexpectedly the evaluation order was given on April 13, 2023, far ahead of the date.

Arguments: WONDER BRICKS, the petitioner, challenged the assessment order, claiming that it was issued prematurely and thereby violated due process. They emphasized the evident inconsistency between the reply deadline and the assessment order date.

The respondent (the department) was given the chance to provide instructions and file a counter-affidavit. The respondent, however, neglected to file a counter-affidavit, keeping the petitioner’s allegations uncontested.

Reasoning: Because of the lack of a counter-affidavit submitted by the respondent, the petitioner’s argument went unquestioned, and the court approved their plea. The evaluation order was clearly issued before the given response time, breaching the norms of procedural equity and natural justice.

Judgement: The assessment ruling dated April 13, 2023 was annulled by the Delhi High Court in the matter of WONDER BRICKS against PCIT. The court ordered the assessee to respond to the show cause notice given on March 31, 2023, inside four weeks of obtaining a copy of the court’s ruling, restoring due process and according to the set timetables.

This ruling emphasises the significance of fairness in the process in the evaluation of tax problems and requires authorities to adhere to the timeframes they set in provide explanation notifications.


Written By: Nikita Shankar @nikitaashankar

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