Delhi High Court rejects IT notice for lack of personal hearing

Delhi High Court rejects IT notice for lack of personal hearing

The petitioner was charged an additional amount treating it as 'Other Income'

A division bench of the Delhi High Court has quashed the notice and the assessment order issued by the Income Tax authorities. It maintained that the assessee had not been allowed the opportunity of a personal hearing.

The assessee, an individual, had approached the high court challenging the June 2021 assessment order issued under Sections of the Income Tax Act, 1961, He was charged an addition of Rs.7,34,28,895, which was treated as 'Other Income.'

The income was, in fact, proposed on account of the interest received by him from the Land Acquisition Collector (LAC) on enhanced compensation for the acquisition of the land. Based on the assessment, the IT department also imposed a penalty on the petitioner. The orders were passed without giving him the chance for clarifications.

The division bench comprising Justice Rajiv Shakdher and Justice Jasmeet Singh relied on an earlier decision, wherein it was held that the IT department cannot deviate from its own statute of granting a personal hearing.

The court, thus, ruled, "The impugned assessment order as well as the consequential notice issued under Section 156 and the notice issued for initiation of penalty proceedings under Section 270A of the IT Act, are set aside."