2022 (10) TMI 769 - HC - Income Tax

Faceless Assessment Scheme - As argued principles of natural justice have not been adhered to in the present case - HELD THAT - The notice was itself only uploaded in the portal and no intimation appears to have been sent to the petitioner by way of message or otherwise and thus the submission of the petitioner that it was entirely unaware of the show cause notice or the hearing fixed is credible and is accepted. The impugned order of assessment has come to be passed on the very next day, i.e., 29.12.2019, for the reason, evidently, that it is a time barring assessment, that has to be completed by 31.12.2019. However, this does not justify the callous approach of the respondent in entirely bypassing the requirement of providing an effective opportunity of hearing. The show cause notice ought to have been issued well in time affording sufficient opportunity to the petitioner to prepare and submit its defence as well as to appear for personal hearing. For the aforesaid reasons, the impugned order is set aside. Since the show cause notice has been served, the petitioner shall file its response to the same, for which purpose, the respondents shall open/enable the portal.

Summary

Issues:
Challenge to assessment order under Income Tax Act, 1961 for assessment year 2017-18. Adherence to principles of natural justice under Faceless Assessment Scheme.

Analysis:
The petitioner challenged the assessment order dated 29.12.2019 for the assessment year 2017-18 under the Income Tax Act, 1961. The court noted that the Faceless Assessment Scheme's procedures concerning natural justice were not followed in this case. While the petitioner was given an opportunity to submit an explanation in response to the show cause notice, there were discrepancies in the procedure followed. The show cause notice was issued on 28.12.2019, signed on the same day at 3.39 p.m., and required the petitioner's attendance at a hearing on the same day at 7.00 p.m., allowing only a mere 3 hours for preparation. Additionally, the notice was only uploaded on the portal without any intimation sent to the petitioner directly, leading to the petitioner being unaware of the notice and hearing. The court found the approach of the assessing authority to be callous in bypassing the requirement of providing an effective opportunity for a hearing.

The impugned assessment order was set aside by the court due to the procedural irregularities. The court directed the petitioner to file a response to the show cause notice, with the respondents required to open/enable the portal for this purpose. Once the reply was received, a link for a personal hearing would be provided to the petitioner, and the assessment orders would be passed afresh. The court mandated that the entire process, from opening the portal to passing the assessment orders, must be completed within twelve weeks from the date of receipt of the court's order. The writ petition was allowed with no costs, and connected miscellaneous petitions were closed.