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2021 (9) TMI 1236 - HC - Income TaxFaceless assessment u/s 144B - violation of principle of natural justice - HELD THAT - As in the present case, there has been a violation of principle of natural justice as well as Section 144B(1)(xvi)(b) of the Act inasmuch as the impugned draft assessment order under Section 144C(1) of the Act has been passed five days prior to the last date for filing of the reply/objections to the Show Cause notice by the petitioner. Consequently, the draft assessment order dated 29th August, 2021 passed by respondent u/s 144C(1) of the Act is hereby quashed - This Court directs that the Petitioner shall file its reply/objections to the Show Cause Notice dated 27th August, 2021 on or before 24th September, 2021 and the Assessing Officer shall pass a fresh draft assessment order in terms of Section 144C(1) of the Act on or before 30th September, 2021. To facilitate the filing of the reply/objections by the petitioner, the Assessing Officer is directed to open functionality on the online portal. The Petitioner is also directed to file its reply/objections to the Show Cause Notice by email.
Issues:
Challenge to draft assessment order and show cause notice under Section 144C(1) of the Income Tax Act, 1961 for non-compliance with Section 144B and violation of natural justice. Analysis: The petitioner challenged the draft assessment order and show cause notice issued by the Respondents under Section 144C(1) of the Income Tax Act, 1961. The petitioner contended that the Respondents failed to comply with the mandatory provision of Section 144B and violated the principles of natural justice. The Respondents proposed to assess the petitioner's income at a significantly higher amount than the declared loss. The petitioner was given until a specific date to respond to the show cause notice, but the draft assessment order was passed five days before the deadline for filing objections. The Respondents accepted notice, and the deadline for issuing the draft assessment order was noted to be 30th September, 2021. The Respondents waived their right to file a reply considering the limited time available. The Respondents stated that the petitioner would not seek a personal hearing in the proceedings due to time constraints. The Court found a violation of the principle of natural justice and Section 144B(1)(xvi)(b) of the Act since the draft assessment order was passed before the deadline for filing objections to the show cause notice. Consequently, the Court quashed the draft assessment order dated 29th August, 2021. The Court directed the petitioner to file its reply/objections to the show cause notice by 24th September, 2021. The Assessing Officer was instructed to pass a fresh draft assessment order by 30th September, 2021. To facilitate the filing of the reply/objections, the Assessing Officer was directed to open functionality on the online portal, and the petitioner was instructed to submit its reply/objections via email. With these directions, the Court disposed of the writ petition and pending applications.
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