Delhi High Court Sets Aside Assessment Order And Penal Offences By Legal Era

Delhi High Court Sets Aside Assessment Order And Penal Offences By Legal Era

The Court said that an assessee cannot be penalised due to a system effort on the e-filing website, a notice of demand was passed in violation of the principle of natural justice

The Delhi High Court has set aside the assessment order passed by the Assistant Commissioner as it was passed in violation of the principle of natural justice due to a systems error, which generated an automated acknowledgement of Petitioner's adjournment application.

A Division Bench of the High Court of Delhi, comprising of Justices Manmohan and Navin Chawla, dealt with this matter titled Three C Homes Pvt Ltd v Assistant Commissioner of Income Tax Central Circle 6, New Delhi.

The factual background of this petition is that the Petitioner – Assessee had challenged the assessment order passed by the Respondent – Assistant Commissioner on the ground that an application for adjournment was filed by the Petitioner on 31 May 2021 on the e-filing website, which generated an acknowledgement confirming its submission. The Central Bureau of Investigation was directed to enquire as to whether the email dated 31 May 2021 was issued to the Petitioner or not by the Respondent.

The Respondent admitted that the email received by the Petitioner from 'donotreply@incometaxindiaefiling.gov.in', confirming the acknowledgement of Petitioner's adjournment application, was a genuine email from the Department. However, the Respondent submitted that it was triggered due to a systems error when the Petitioner made an application for adjournment on 31 May 2021 on the e-filing website, which generated an automated acknowledgement confirming submission of the same, as per the standard protocol. The Respondent further submitted he was under a bona fide belief that any communication issued in response to Petitioner's request for adjournment would be issued with Respondent's express consent alone.

The Respondent further sought to withdraw/delete certain parts/paras from the counter affidavit wherein it had been alleged that the Petitioner had prima facie committed penal offences under Sections 191, 192 and 196 of the Indian Penal Code (IPC). The Respondent also acknowledged that the allegation of perjury, without verification of facts, should not have been made and expressed his regrets for the same. Due to the aforesaid mistake, the Respondent further admitted that the assessment order and notice of demand was passed in violation of the principle of natural justice

The Court accepted the unconditional apology of the Respondent and deleted all the allegations against the Petitioner that he had had prima facie committed penal offences under Sections 191, 192 and 196 of the IPC.

The Court, therefore, set aside the assessment order and notice of demand as they were passed in violation of the principle of natural justice due to a systems error.