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2022 (5) TMI 300 - HC - Income TaxValidity of faceless assessment u/s 144B - On the last date of hearing petitioner had stated that the facts and figures mentioned in the impugned assessment order dated 30 th March, 2022 do not pertain to the petitioner - HELD THAT - Keeping in view the aforesaid concession as well as the fact that the facts and figures mentioned in the impugned order do not pertain to the petitioner, the present matter is allowed and the impugned Assessment Order as well as demand notice dated 30th March, 2022 are quashed. If the law permits the respondent-revenue to take further steps in the matter, it shall be at liberty to do so. Needless to state that if and when such steps are taken and if the petitioner has a grievance, it shall be at liberty to take its remedies in accordance with law. This Court is actually surprised that despite an elaborate mechanism of checks and balances and multiple authorities like (assessment units, verification units, technical units, review units, Regional Faceless Assessment Centres and National Faceless Assessment Centre) being set up u/s 144B of the Act, such glaring mistakes can happen. This Court is also of the view that faceless assessment does not mean that no responsibility can be fixed for passing such an erroneous order. PCIT, National Faceless Assessment Centre is directed to be more cautious while passing the Assessment Orders and the CBDT is directed to ensure that such glaring mistakes do not occur in the future.
Issues Involved:
Challenging assessment order under Section 147 of the Income Tax Act, 1961; Incorrect depreciation claim; Jurisdictional error in assessment order; Errors in assessment order; Remand for de novo assessment; Quashing of assessment order and demand notice; Responsibility in faceless assessment; Directions for caution in passing assessment orders. Challenging Assessment Order under Section 147: The petitioner filed a writ petition challenging the assessment order dated 30th March, 2022, passed by the National Faceless Assessment Center, Delhi under Section 147 of the Income Tax Act, 1961. The petitioner disputed the assessment order and demand notice, claiming that the facts and figures mentioned in the order did not pertain to them. Incorrect Depreciation Claim: The petitioner's counsel highlighted that the petitioner had only claimed depreciation of Rs.2,50,425/-, contrary to the Rs.13,42,354/- mentioned in the assessment order. The discrepancy in the depreciation claim raised concerns about the accuracy of the assessment and the demand raised based on incorrect information. Jurisdictional Error in Assessment Order: It was pointed out that despite the petitioner being assessed in Delhi, the assessment order and show cause notice mentioned the Principal Commissioner, Shillong, as having accorded approval, which was a jurisdictional error. This discrepancy raised questions about the validity of the assessment process. Errors in Assessment Order and Remand for De Novo Assessment: The respondent's counsel admitted to errors in the assessment order and requested a remand back to the Assessing Officer for a fresh assessment in accordance with the law. Considering the concession made and the mismatch of information, the Court allowed the petition and quashed the assessment order and demand notice dated 30th March, 2022. Responsibility in Faceless Assessment: The Court expressed surprise at the occurrence of glaring mistakes despite the existence of various authorities and mechanisms under Section 144B of the Act for faceless assessment. It emphasized that faceless assessment did not absolve the authorities from accountability for erroneous orders and directed the PCIT and CBDT to be more cautious to prevent such errors in the future. Directions for Caution in Passing Assessment Orders: The PCIT, National Faceless Assessment Centre was instructed to exercise more caution in passing assessment orders, and the CBDT was directed to ensure the prevention of glaring mistakes in the future. The respondent's counsel was directed to forward a copy of the order to the Chairman, CBDT, and the PCIT, National Faceless Assessment Centre for necessary action and compliance.
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