2024 (1) TMI 1195 - HC - Income Tax

Validity of final assessment order u/s 144B - petitioner request for adjournment was ignored - HELD THAT -The issue is squarely covered by the decision of this Court in case of Verichand Bawandas HUF Karta of HUF Pawankumar Virdhichand Agrawal vs. National E-Assessment Centre 2022 (8) TMI 91 - GUJARAT HIGH COURT Assessee congenial approach should be reflected not only in the application of taxation laws but also in the procedural mechanism to be applied towards assessee in treating him for the purpose of tax. It hardly stood to reason that the department refused the request of the assessee for grant of time to file his response to the draft assessment order. There was sufficient time available for the final assessment to be made. As it was pandemic time when the department should have adopted liberal approach in refusing the request for time for filing objection to the draft assessment order and finally passing the assessment order. The department acted thick skinned.Thus petitioner deserves to be granted a relief. The assessment order dated under Section 143(3) read with Section 144B are hereby set aside. In view of the above dictum of law in the aforesaid case, the petition is required to be allowed and is accordingly allowed. Matter is remanded back to the Assessing Officer to decide the same afresh from the stage of the draft assessment order.

Summary

Issues involved:
The petition under Article 226 of the Constitution of India seeks to quash and set aside the Assessment Order and demand notice for the Assessment Year 2018-19. The petitioner also requests a stay on the implementation of the Assessment Order, along with any other relief deemed just and proper.

Details of the Judgment:

Issue 1: Assessment Proceedings
The petitioner, engaged in manufacturing and trading, filed a return of income for the year declaring total income. The return was assessed under section 143(3) of the Income Tax Act, and a draft assessment order was sent to the petitioner. Due to the Covid-19 pandemic, the final assessment order was passed without the petitioner's response, leading to the present petition.

Issue 2: Breach of Natural Justice
The petitioner argued that the assessment proceedings violated natural justice principles, citing a previous case where the court set aside an assessment order due to a similar breach. The court agreed that the right of the assessee to reply and present objections before the final assessment order was a statutory requirement, which was not fulfilled in this case.

Issue 3: Remedy and Directions
In light of the breach of natural justice, the court allowed the petition, quashing the impugned order and notice. The matter was remanded back to the Assessing Officer to decide afresh from the stage of the draft assessment order, ensuring the petitioner is given an opportunity to file a reply. The Assessing Officer was directed to complete the assessment proceedings within twelve weeks from the date of receipt of the order.

Conclusion:
The petition was allowed, and the notice and impugned order were quashed without delving into the merits of the case. The Assessing Officer was instructed to reevaluate the matter, providing the petitioner with an opportunity to respond within a specified timeframe. The petition was disposed of accordingly, with the rule made absolute in favor of the petitioner.