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TMI Blog2023 (10) TMI 1324X X X X Extracts X X X X X X X X Extracts X X X X ..... equirement to follow fair procedure before taking a decision must be read into the statute, unless the statute provides otherwise. The principles of natural justice operate in areas not covered by any law. They do not supplant the law of the land but only supplement it. They are not embodied rules and their aim is to secure justice or to prevent miscarriage of justice. The principles of natural justice need to be adhered in each and every case. It is a settled law that it is not permissible for any authority to jump over the compliance of natural justice on the ground that even if opportunity of hearing had been afforded, it would have served no fruitful purpose. As decided in VASUPUJYA INFRASTRUCTURES LLP [ 2022 (8) TMI 1455 - GUJARAT HIGH COURT] it is not in dispute that in facts of the case no draft assessment along with show cause notice as required under section 144B(1) and section 144B(7) is given to the petitioner so as to enable the petitioner to give explanation for proposed addition during the hearing before the National Faceless Assessment Centre. Section 144B(1)(xii) provides that on receipt of show cause notice, assessee may furnish his response to the Natio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness of real estate and hospitality. The petitioner filed return of income for the Assessment Year 2018-19-the year under consideration on 20.08.18 declaring total income at Rs. 1,37,84,110/-. During the year under consideration, short term borrowings reduced from Rs. 22,52,69,060/- as at 31.03.17 to Rs. 2,46,13,850/- as at 31.03.18. The case of the petitioner for the year under consideration was selected for scrutiny assessment. Various details were called for by the department and the same were duly furnished by the petitioner from time to time. Eventually, the Respondent herein prepared a draft assessment order determining total income of Petitioner at Rs. 20,06,55,210/- after proposing sizable addition and sent the same through show cause notice dated 23.09.21 calling upon the Petitioner to show cause as to why assessment should not be completed as per draft assessment order. The respondent also stated in Paragraph 3 of the show cause notice that response should be submitted through the registered e-filing account by 23:59 hours of 27.09.21. The respondent further stated therein that if required, the petitioner may request for personal hearing so as to make oral submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to generate a new VC link and password. The authority replied that it was not possible since assessment was getting time barred on 30.09.21 and it further stated that the petitioner may upload further details, if need be. The petitioner replied that details have been uploaded and that the basic difference was that income was proposed to be assessed on the basis of repayment of loans accounted in the audited books of accounts. The petitioner further stated that receipt during the year and the fact that the repayment amount determined was erroneous was explained. The authority responded that the same will be examined and considered accordingly. Thereafter, the authority asked the petitioner if anything else was to be submitted, the petitioner stated that it was unfortunate that the opportunity of hearing was practically not granted. The petitioner further stated that it was happening so repeatedly in other cases as well. The authority, thereafter, asked the petitioner whether the VC be concluded. The petitioner requested for another time slot and link to which, the authority replied that it was not possible at the fag end. The petitioner, therefore, requested to consider the submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 29.09.21 VC rescheduled on 29.09.21 at 12.30 PM could not be conducted since neither the assessee nor the authority were audible; 29.09.21 VC rescheduled on 29.09.21 at 02.00 PM started but the communication was merely through chat box; The Petitioner did not get an effective opportunity to explain the case orally owing to technical glitches; 30.09.21 Impugned Assessment Order was passed by the Respondent; 5.3 Mr. Hemani would further submit that issuing of a show cause notice and personal hearing is necessary before passing any adverse order against a person. It is a trite law that when the statute is silent, with no positive words in the Act or the Rules spelling out the need to hear the party whose rights or interests are likely to be affected, requirement to follow fair procedure before taking a decision must be read into the statute, unless the statute provides otherwise. The principles of natural justice operate in areas not covered by any law. They do not supplant the law of the land but only supplement it. They are not embodied rules and their aim is to secure justice or to prevent miscarriage of justice. The principles of natural justice need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act held as under: 8. We have heard learned advocates appearing for the respective parties and perused the impugned order as well as gone through relevant provisions of law. In order to adjudicate the issue involved with regard to providing opportunity of hearing, it would be germane to refer to the relevant provisions of section 144B of the Act, 1961 which reads as under : 144B. (1) Notwithstanding anything to the contrary contained in any other provisions of this Act, the assessment under sub-section (3) of section 143 or under section 144, in the cases referred to in sub-section (2), shall be made in a faceless manner as per the following procedure, namely: xxx (xiv) the assessment unit shall, after taking into account all the relevant material available on the record make in writing, a draft assessment order or, in a case where intimation referred to in clause (xiii) is received from the National Faceless Assessment Centre, make in writing, a draft assessment order to the best of its judgment, either accepting the income or sum payable by, or sum refundable to, the assessee as per his return or making variation to the said income or sum, and sen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the request for personal hearing referred to in clause (vii) if he is of the opinion that the request is covered by the circumstances referred to in subclause (h) of clause (xii); (ix) where the request for personal hearing has been approved by the Chief Commissioner or the Director General, in charge of the Regional Faceless Assessment Centre, such hearing shall be conducted exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, in accordance with the procedure laid down by the Board; 9. Section 144B of the Act, 1961 provides detailed procedure for Faceless Assessment introduced by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 with effect from 1st April, 2021. Section 144B(1) starts with a non-obstante clause i.e. notwithstanding anything to the contrary contained in any other provisions of this Act, the assessment under sub-section (3) of section 143 or under section 144, in the cases referred to in subsection (2), shall be made in a faceless manner... as per the procedure prescribed therein. 10. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible under the law after issuance of show cause notice-cum-draft assessment order so as to provide an opportunity of hearing to the petitioner. The petitioner shall be given an opportunity of hearing as per the provisions of section 144B of the Act, 1961. Such exercise shall be completed within 12 weeks from the date of receipt of copy of this order. 9. In view of above, it can be safely said that the impugned order was passed by the respondent in violation of principles of natural justice and affording an opportunity of personal hearing by not following the prescribed procedure laid down as per the provisions of section 144B of the Act 1961, for Faceless assessment. 10. In the result, this petition succeeds and is accordingly allowed. The impugned order of assessment passed by the respondent under Section 147 read with Section 144B of the Income Tax Act 1961, dated 30.09.2021 and demand notice dated 30.09.2021 for the assessment year 2018-19 under section 156 of the Act are quashed and set aside. The respondent/Revenue will be at liberty to proceed with assessment under the provisions of section 144B of the Act, 1961, as permissible under the law after issuance of show c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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