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2021 (12) TMI 411 - HC - Income TaxValidity of assessment u/s 144B - National Faceless Assessment - order passed without issuing a Show Cause Notice and a draft assessment order which is mandated under Section 144B(1)(xvi)(b) - HELD THAT -National Faceless Assessment Centre would introduce a system of alerts and checks to ensure that no final Assessment order is passed without prior issuance of a Show Cause Notice as well as draft assessment order and without considering reply by the Assessee and a request, if any, of the Assessee for an opportunity of hearing. As in view of Section 144B (9) of the Act that any assessment order not made in accordance with the procedure laid down in Section 144B of the Act would be non est, this Court directs the Principal Chief Commissioner to examine as to whether the National Faceless Assessment Centre would withdraw a final assessment order, passed in violation of principles of natural justice and/or without issuing Show Cause Notice and draft assessment order as well as without considering the reply and/or assessee s request for a personal hearing. She states that she would file an affidavit after discussing the aforesaid suggestions with CBDT and with her officers within three weeks. List on 24th December, 2021.
Issues: Challenge to final assessment order under Income Tax Act, 1961 for Assessment Year 2018-19 without issuance of Show Cause Notice and draft assessment order as mandated under Section 144B(1)(xvi)(b) of the Act.
Analysis: The petitioner, an advocate, filed a writ petition challenging the final assessment order dated 8th September, 2021, issued under Section 143(3) read with Section 144B of the Income Tax Act, 1961 for the Assessment Year 2018-19. The counsel for the petitioner contended that the impugned assessment order was passed without the mandatory issuance of a Show Cause Notice and a draft assessment order as required under Section 144B(1)(xvi)(b) of the Act, thereby violating the provisions of Section 144B. The respondent assessed the petitioner's income at ?25,85,92,670/- and raised a demand of ?49,67,050/- without following the prescribed procedure. The court noted that despite previous judgments setting aside similar assessment orders, the respondents continued to pass such orders, indicating a recurring issue. Consequently, the Principal Chief Commissioner of National Faceless Assessment Centre was directed to appear before the court to address the matter. Ms. Reena Sinha Puri, the Principal Chief Commissioner, assured the court that the National Faceless Assessment Centre would implement a system of alerts and checks to prevent the passing of final assessment orders without issuing a Show Cause Notice, draft assessment order, and considering the assessee's reply or request for a hearing. Considering the provisions of Section 144B(9) of the Act, which renders assessment orders not made in accordance with the prescribed procedure as non est, the court directed the Principal Chief Commissioner to assess whether any final assessment order passed in violation of natural justice principles, without issuing necessary notices, and without considering the assessee's response should be withdrawn. Ms. Reena Sinha Puri committed to discussing the suggestions with the Central Board of Direct Taxes (CBDT) and her officers, and to file an affidavit within three weeks. The matter was listed for further hearing on 24th December, 2021.
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