2022 (10) TMI 358 - HC - Income Tax

Validity of order of assessment passed u/s 147 r/w Section 144B - time given to the Petitioner for fling the reply to the show cause notice was not sufficient - argument of gross violation of principles of natural justice - HELD THAT - When the Petitioner tried to upload the reply to the show cause notice, it was found that the submit button on the e-Filing Portal had been disabled. Petitioner also placed reliance upon a screen shot of the e-Filing Portal to suggest that at 22 18 hrs., the submit button shaded in gray had been disabled. It was also stated that the Petitioner immediately thereafter registered her grievance on the e- Filing Portal in this regard on 29th March, 2022 itself, a copy whereof has also been placed on record. Not only this, the Respondents also stood informed via email on the same date regarding the said fact. A copy of the email is also a part of the record. We are satisfied that the order impugned and notice of demand are not sustainable on account of violation of principles of natural justice. Be that as it may, impugned order and notice of demand are set aside. Petitioner is granted three weeks time to file her reply to the show cause notice with the National Faceless Assessment Centre, Delhi. The Respondents shall be at liberty to pass appropriate orders within ten weeks thereafter in accordance with law.

Summary

Issues:
Challenge to assessment order under Income Tax Act based on violation of principles of natural justice.

Analysis:
The petition challenged the assessment order dated 30th March, 2022, passed under Section 147 r/w Section 144B of the Income Tax Act, 1961, and the consequent Notice of Demand on the grounds of gross violation of principles of natural justice. The petitioner claimed that the show cause notice issued on 27th March, 2022, required a reply by 29th March, 2022, but when attempting to upload the reply, the 'submit button' on the e-Filing Portal was disabled. Evidence was presented, including a screenshot and a registered grievance on the portal, along with informing the Respondents via email. The court found merit in the petitioner's contentions and concluded that the impugned order and notice of demand were not sustainable due to the violation of principles of natural justice.

The court set aside the impugned order and notice of demand, granting the petitioner three weeks to file a reply to the show cause notice dated 27th March, 2022, with the National Faceless Assessment Centre, Delhi. The Respondents were given the liberty to pass appropriate orders within ten weeks thereafter in accordance with the law. The writ petition was disposed of accordingly, ensuring that the petitioner's right to be heard and respond to the show cause notice was upheld, emphasizing the importance of adherence to principles of natural justice in administrative actions, especially in matters of tax assessments under the Income Tax Act, 1961.