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2023 (10) TMI 1199 - DELHI HIGH COURTReopening of assessment - principles of natural justice denied - tax evasion petition [“TEP”] filed by one Mr S.K. Srivastava as working with the revenue in a senior position - as per assessee sufficient time to assessee to respond objections of the assessee as rejected was not provided - undisclosed investment made in mutual funds and the interest earned thereupon and capital gains on investment made in a Joint Development Agreement (JDA) escaped assessment as no RoI had been filed by the petitioner/assessee. HELD THAT:- Having heard all we are in agreement to the extent that while exercising power under Article 226 of the Constitution, the court would neither examine the merits of the case not enter the quagmire concerning the inadequacy of the material available to the AO while triggering reassessment proceedings. Reassessment proceedings were triggered against the petitioner/assessee on account of the TEP filed - AO in framing the assessment order has accepted contents of the TEP as gospel truth, and has not subjected it to the usual rigoor of putting the material to the petitioner and eliciting his answers with regard to the same. The timeline alluded to hereinabove by us would show that the objection to the reopening were rejected on 13.10.2016 by the AO, who then within 10 to 12 days i.e., 25.10.2016, proceeded to pass the impugned assessment order. Substantial part of the addition is based on the complaint made by Mr S.K. Srivastava. Admittedly, this material was not put to the petitioner. The petitioner/assessee had no opportunity therefore to rebut the material and place his version before the AO. The objection taken by the petitioner that there ought to have been a hiatus of four (4) weeks between the date when the objection preferred by him were rejected and the assessment order was passed does not seem to have been appreciated by the AO. AO seems to have proceeded on the basis that at the relevant point in time, the judgments which, in essence, expanded the scope of principle enunciated in GKN Driveshafts (India) Ltd. [2002 (11) TMI 7 - SUPREME COURT] did not pertain to the jurisdictional High Court i.e. this court. Therefore, according to the AO, the period between 13.10.2016 (date when the objections preferred by the petitioner were rejected) and 25.10.2016 (when the impugned assessment order was passed) was sufficient. We may note that in a later judgment of Samsung India Electronics Pvt Ltd.[2013 (11) TMI 820 - DELHI HIGH COURT] this court categorically held that if objections of the assessee are rejected, then the AO should accord at least three weeks to the assessee to enable him to approach the court before taking up reassessment proceedings. We may however note that it is accepted by Mr Das and Ms Jha that the judgment rendered by this court in Samsung India Electronics’ case was perhaps not cited before the AO. But according to us that by itself would not be a sufficient cause to side step to principle of hiatus which was declared by the other High Courts, and judgments of those High Courts were concededly cited before the AO. Merely because the judgment in Samsung India Electronics’ case was not cited before the AO would not absolve him from adhering to the principles which was enunciated by other constitutional courts i.e.,in Allana Cold Storage Ltd.’s case [2006 (9) TMI 123 - BOMBAY HIGH COURT] and Asian Paints Limited’ s case [2007 (1) TMI 159 - BOMBAY HIGH COURT] as long as there was no conflicting judgement of the jurisdictional court, i.e., this court. We are of the view that the impugned assessment order cannot be sustained, as there has been a grave infarction of principles of natural justice. Decided in favour of assessee.
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