Delhi High Court quashes notice given to Standard Chartered Bank UK under IT Act

Delhi High Court quashes notice given to Standard Chartered Bank UK under IT Act

States that the assessing officer must consider the assessees’ reply irrespective of its merits

The Delhi High Court has set aside the notice issued to the Standard Chartered Bank UK under Section 148A of the Income Tax Act. It held that the assessing officer (AO) did not consider the petitioner's reply.

Standard Chartered, the petitioner, had challenged a 31 March 2023 notice under Section 148A(b), a 31 March 2023 order under Section 148A(d), and a consequential 31 May 2023 notice under Section 148. The actions were initiated, based on the premise that the petitioner received Rs.156,15,43,994 in the form of other income and/or fees for technical services from Vodafone Mobile Services Limited.

The bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia took note of two significant concerns raised by the petitioner.

First, the notice had been issued by an officer lacking jurisdiction. The assessment under Section 143(3) of the Act was conducted by the Assistant Commissioner of Income Tax (ACIT), International Taxation, Circle 4(2)(2), Mumbai, while the notice was issued by an officer in New Delhi.

Second, the petitioner was provided with the information and material on which the notice was based. The ACIT issued the May 2023 order under Section 148A(d) without considering the petitioner's response filed on 26 April.

The Judges noted that the AO should have properly considered the petitioner's response, regardless of its content. Since he failed to do so, the May 2023 order and the subsequent notice were set aside.