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TMI Blog2021 (12) TMI 1326X X X X Extracts X X X X X X X X Extracts X X X X ..... of natural justice cannot be cribbed or cabined in a straitjacket formula. The concept of natural justice depends on the context and the circumstances of each case. When the tax department of the Country is in a transition phase, with conventional and traditional notices being replaced by e-notices or intimations in the web portal, the technological inadequacies and incompetence of the litigants cannot be brushed aside lightly, especially when the prejudice to the litigant is enormous. As the tax department and the assessees are both passing through the transition phase and shifting to electronic modes, a rigid consideration and application of rules of natural justice do not augur well for the system. The principles of natural justice are flexible enough to adapt to situations like the present, to insist for an effective opportunity for the assessee. This Court is of the opinion that an effective opportunity of hearing could not be availed of by the petitioner in its full sense and therefore there has been a violation of the principles of natural justice while issuing Ext. P6 order of assessment. The fact that if a fresh opportunity is granted to the petitioner to reply to the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer pricing adjustment was even considered necessary. 4. In the meantime, petitioner was issued with notices for the subsequent assessment year 2018-19 also. Since nothing was heard as regards the assessment year 2017-18, petitioner alleges that it bonafide believed that the proceedings of the year 2017-18, had been concluded. 5. Much later, to the chagrin of the petitioner, it realised that the proceedings for the assessment years 2017-18 and 2018-19 progressed simultaneously under the Faceless Assessment Scheme. Though for the assessment year 2018-19, petitioner received a letter from the jurisdictional authority that the case was transferred to the faceless assessment scheme, such an intimation was absent for the assessment year 2017-18. Therefore, the petitioner contended that it was unaware of the completion of the proceedings relating to the assessment year 2017-18 under the faceless scheme. According to the petitioner, it realized about the order of assessment for 2017-18 only when the department enquired with the petitioner's consultant, about non-compliance of the demand. Subsequently, when petitioner accessed the web portal of the income tax department, it reali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings were going on simultaneously, petitioner was participating in one assessment year while not responding to the other. The learned counsel asserts that, the absence of participation in one assessment proceeding indicates absence of knowledge of the proceedings. The learned counsel further submitted that, the quantum involved in the present assessment year is also significant that, petitioner would never have purposefully avoided an opportunity to object to the same. It was also submitted that the technical issues with the web portal of the Income Tax Department were not alien and that contributed to the difficulty to various assessees. Apart from that, the technical challenges of online system faced by the professionals who deal with assessees accounts also contributed to the same, contends the learned counsel. 9. Sri. Christopher Abraham, learned Standing Counsel for the respondents filed a statement contending that the reasoning of the assessee is least convincing and even defies logic. Respondents further pleaded that it was obligatory upon the petitioner to bring to the notice of the Assessing Officer the change of e-mail id by updating the same in the web portal. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, there was no response from the petitioner. 13. The assessing officer again adjourned the case for further consideration to 07.04.2021. Since even by 12.04.2021 there was no response from the petitioner, the provisions of section 145(3) of the Act was invoked and the assessing officer rejected the books of accounts of the assessee, and computed the profits at 8% of the total turnover and calculated the profit at ₹ 1,32,19,88,372/-. A further addition of ₹ 92,89,62,279/- was also determined and the total income was rounded off to ₹ 223,41,88,410/-. Thereafter separate penalty proceedings have also been initiated under section 270A of the Act. 14. A perusal of the aforesaid details mentioned in the order of assessment reveals that the assessing officer tried his level best to elicit a response from the petitioner. However, for reasons best known to the assessee, there was no response. 15. While appreciating the contentions of the petitioner regarding the absence of knowledge about the notices issued to the petitioner, a significant circumstance is the participation of the petitioner in the assessment proceedings for 2018-19, at the same time. While participatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bligations of not only the assessee but also of the department arise, it is essential that such a platform is built upon strong foundations, especially when the amount involved is large. The burden of an assessment order issued without hearing the assessee will fall, not only upon the petitioner alone but even upon the system itself and may create further waste of resources. 19. It is relevant to bear in mind that the principles of natural justice cannot be cribbed or cabined in a straitjacket formula. The concept of natural justice depends on the context and the circumstances of each case. The principle of natural justice must be flexible enough to adapt to the myriad of circumstances where a person is subjected to prejudice due to lack of knowledge, which stems from bonafide or genuine reasons. The right of a man to have a fair opportunity of hearing is fundamental to any civilised legal system as Lord Diplock observed in O'Reilly v. Mackman (1983 2 AC 237 at Pg. 276). 20. The rules of natural justice must depend on the circumstances of each case, the set of facts that surround each situation, the nature of the inquiry, the rules that govern the procedure and even the subje ..... X X X X Extracts X X X X X X X X Extracts X X X X
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