The Delhi High Court has recently criticised the IT dept. for its delayed action in following the tax penalties after nine years. The court explained such long inaction as “difficult, nay impossible” to understand and thereafter annulled the notice given to APS Hydro Private Limited.
A division bench of Justice Dinesh Mehta and Justice Vinod Kumar was dealing with a writ petition against a notice on February 16, 2022, and a follow-up communication issued on May 12, 2022, by the Assistant Commissioner of Income Tax, which deemed the taxpayer to be in default under the Income Tax Act.
The petitioner, none of the orders related to the demand – whether for rectification, summary assessment, or penalty – were ever properly served. The petitioner stated that it only became aware of the alleged dues when the notice arrived in 2022.
On the other hand, the department asserted that the relevant notifications and orders had been sent via email. However, they did not specify any dates for when these communications were issued.
Also Read: Delhi HC Refuses to Quash IT Reassessment Notice U/S 148 as Factual Disputes Should Be Decided by AO
The court observed that the demands covered multiple assessment years, with the earliest dating back to February 9, 2013. The amounts in question totalled several lakh rupees, yet there seemed to be no recovery efforts made for years.
“In any case we would like to observe that it is difficult nay impossible to believe that despite having a huge pending demand against an assessee since 2013 the department will keep quiet and will get up from its slumber only after 9 years.”
It was further noted that, assuming service by email, it was against natural conduct for a taxpayer to take no remedial action in light of a substantial liability.
Subsequently, the court set aside the notice in challenge while citing that the department shall be allowed to initiate fresh proceedings within the law.
| Case Title | Aps Hydro Pvt. Ltd. Vs. Union of India |
| Citation | W.P.(C) 9132/2022 |
| Counsel For Appellant | Mr Prabhat Kumar |
| Counsel For Respondent | Mr Indruj Singh Rai, Mr Sanjeev Menon, Mr Rahul Singh, Mr Vijay Joshi, Mr Shubham Chaturvedi |
| Delhi High Court | Read Order |
