2021 (7) TMI 1249 - HC - Income Tax

Validity of Draft assessment order passed u/s 143(3) read with Sections 144C - petitioner states that the impugned draft assessment order as been passed without issuance of a show cause notice, as mandated by Section 143(3A)/144B - HELD THAT - Mr.Sanjay Kumar, Advocate accepts notice. He states that he does not wish to file any formal reply to the present writ petition. He further states that he has no objection if the petition is allowed and the matter is remanded back to the Assessing Officer for passing a fresh assessment order under Section 143(3) read with Sections 144B and 144C. Learned counsel for the petitioner has no objection to the same. Consequently, the impugned draft assessment order dated 25th March 2021 passed under Section 143(3) read with Sections 144C of the Act and the impugned Assessment order dated 24th May, 2021 passed under Section 143(3) r/w Section 144C(3) read with Section 144B of the Act are set aside and the matter is remanded back to the Assessing Officer for passing a fresh assessment order under Section 143(3) read with Sections 144B and 144C of the Act after giving a show cause notice to the petitioner under Section 144B(1) (xvi) of the Act.

Summary

Issues: Challenge to draft assessment order under Income Tax Act, 1961 without show cause notice; Violation of natural justice in Faceless Assessment First Amendment Scheme 2021.

Analysis:
1. The petition challenged a draft assessment order dated 25th March, 2021, passed under Section 143(3) read with Sections 144C of the Income Tax Act, 1961, and a consequential assessment order dated 24th May, 2021, for the assessment year 2017-18.

2. The petitioner contended that the draft assessment order was issued without a show cause notice, as required by Section 143(3A)/144B of the Act, violating the principles of natural justice under the Faceless Assessment First Amendment Scheme 2021 and Section 144B of the Act.

3. Upon notice, the respondent's counsel did not contest the petition and expressed no objection to remanding the matter back to the Assessing Officer for a fresh assessment order under Section 143(3) read with Sections 144B and 144C of the Act.

4. Consequently, the High Court set aside the impugned draft assessment order and the consequential assessment order, remanding the matter to the Assessing Officer for a fresh assessment order after issuing a show cause notice to the petitioner under Section 144B(1)(xvi) of the Act within two weeks.

5. The court disposed of the writ petition and pending applications with these directions, instructing the order to be uploaded on the website immediately and a copy to be forwarded to the petitioner's counsel via email.