2021 (10) TMI 285 - HC - Income Tax

Validity of faceless assessment u/s 144B - no opportunity to show cause qua variation has not been given to the writ petitioner - HELD THAT - From 'opportunity to show cause' qua variation being ingrained in the very provision (albeit read with Section 143(3) of IT Act) under which impugned assessment order has been made, it is clear as daylight that in the case on hand there is a breach of the aforementioned provisions Therefore, the Impugned order is set aside solely on the ground that opportunity to show cause qua variation has not been given to the writ petitioner though SCN has been issued. The writ petitioner shall send its objections/ explanation as expeditiously as possible and in any event within a fortnight from today i.e., by 20.09.2021.

Summary

Issues:
Challenge to Assessment Order under Section 143(3) read with Section 144B of the Income-tax Act, 1961 - Opportunity to show cause not provided - Breach of provisions - Disposal of the writ petition.

Analysis:
The writ petition challenged an Assessment Order made under Section 143(3) read with Section 144B of the Income-tax Act, 1961. The petitioner contended that despite receiving a show-cause notice dated 23.07.2021, the opportunity to show cause regarding the variation in the assessment was not granted before the Assessment Order was passed on 03.08.2021. The petitioner emphasized the importance of the opportunity as provided in Section 144B of the Act. The Court noted the breach of provisions regarding the opportunity to show cause and set aside the Assessment Order solely on this ground.

The Court, in its disposal of the writ petition, ordered that the Assessment Order dated 03.08.2021 be set aside due to the failure to provide the opportunity to show cause regarding the variation in the assessment. The Court clarified that no opinion on the merits of the matter was expressed in this order. The petitioner was directed to submit objections/explanations within a fortnight from the date of the order. The assessment was to be completed expeditiously, within six weeks from the date of the order. The writ petition was disposed of with the above directives, and connected writ miscellaneous petitions were closed without any order as to costs.

In conclusion, the High Court of Madras, in the judgment delivered by Mr. Justice M. Sundar, emphasized the importance of providing the opportunity to show cause as mandated by Section 144B of the Income-tax Act, 1961. The Court set aside the Assessment Order due to the failure to grant this opportunity, ensuring that procedural fairness and compliance with statutory provisions were upheld in the assessment process.