Assessee can’t claim denial of hearing opportunity if she elected not to furnish info. as required by AO: HC

Case Details: Saroj Chandna v. ITO - [2023] 146 taxmann.com 30 (Delhi)

Judiciary and Counsel Details

• • Manmohan & Ms Manmeet Pritam Singh Arora, JJ.
  • C.S. Aggarwal, Sr. Adv., Ravi Pratap Mall, Uma Shankar & Mahir Aggarwal, Advs. for the Petitioner.
  • Ruchir Bhatia, Sr. Standing Counsel & Ms Mansie Jain, Adv. for the Respondent.

Facts of the Case

The assessee was served with a reopening notice furnishing information and material relied upon by the Assessing Officer (AO). The assessee submitted response that the information and material provided in the notice did not pertain to her.

AO issued a second reopening notice with new information and asked for an explanation of a specific transaction, ultimately concluding it was an unreported amount and making an addition to the reassessment order.

The assessee filed a writ petition and argued that she was not given a fair hearing before the reassessment order was made and therefore it should be set aside.

High Court Held

The Delhi High Court held that to give effect to the objective of the scheme of section 148A, AO must provide specific material and information to the assessee at the stage of section 148A(b) so that the assessee can provide a meaningful response at the stage of inquiry under section 148A proceedings.

The argument that the assessee did not have the opportunity to respond to the allegations in the notice is not valid. Assessee chose not to provide any explanation or evidence for the transaction with Subhshree Financial Management Pvt. Ltd (SFML) as required by AO.

Since the assessee voluntarily chose not to furnish this information, she cannot claim that she was denied an opportunity to be heard. Thus, there was no error in the impugned order issued by the AO.

List of Cases Referred to

• • Mon Mohan Kohli v. Asstt. CIT [2021] 133 taxmann.com 166/[2022] 441 ITR 207 (Delhi) (para 3)
  • Union of India v. Ashish Agarwal [2022] 138 taxmann.com 64/289 Taxman 183/444 ITR 1 (SC) (para 4)
  • Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC) (para 11)
  • CIT v. Ms Mayawati [2011] 12 taxmann.com 306/201 Taxman 1/338 ITR 563/243 ITR 9 (Delhi) (para 11)
  • CIT v. Bhaichand N. Gandhi [1982] 11 Taxman 59/[1983] 141 ITR 67 (Bom.) (para 11)
  • Divya Capital One (P.) Ltd. v. Asstt. CIT [2022] 139 taxmann.com 461/445 ITR 436/2022 SCC Online Delhi 1461 (para 20).