Delhi High Court rejects pre-consultation IT notice in absence of assessees' response

Delhi High Court rejects pre-consultation IT notice in absence of assessees' response

The matter was remanded back to the revenue department for fresh consideration

A division bench of the Delhi High Court has quashed a pre-consultation notice issued under the Income Tax Act, 1961, stating that it was passed without considering the detailed reply of the assessee.

A bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora was considering a petition filed by Rise Projects Private Limited.

The petitioner contended that the purchase of the property was already assessed during the original scrutiny for the Assessment Year 2016-2017. The transactions were accepted by the respondents vide the December 2018 order.

It further stated that the proceedings initiated under the IT Act were based on a mere change of opinion. This was not permissible in law, as there was no fresh tangible material before the respondents to take a contrary view to the one taken earlier. And that the order was passed without considering the detailed reply filed by the petitioner.

The revenue department admitted that the petitioner's contentions were not considered while passing the impugned order. It said that the assessing officer (AO) had no objection if the matter was remanded back for fresh consideration.

Thus, the court rejected the order. It held, "The assessing officer is directed to pass a fresh order under the IT Act in accordance with the law within eight weeks. The rights and contentions of all the parties are left open. With these directions, we dispose of the writ petition and application."