Delhi High Court quashes Faceless Assessment Order as Time Specified in SCN was not provided by Authority [Read Order]

The Delhi High Court quashed the Faceless Assessment Order as the time Specified in SCN was not provided by Authority to respond.

The petitioner, Blue Square Infrastructure LLP  has challenged the assessment order passed by the respondent authority under Section 143(3) read with Section 144B of the Income Tax Act, 1961. The impugned assessment order concerns the assessment year 2018-2019. Besides this, the challenge is also laid by the petitioner, to the notice of demand, issued under Section 156 of the Act, and the notice for initiation of penalty proceedings issued under Section 274 read with Section 271 AAC (1) of the Act. These orders are also of the even date, i.e., March 23, 2021.

Advocate Rohit Jain, who appears on behalf of the petitioner, urged that apart from anything else, the show cause notice-cum-draft assessment order dated March 20, 2021, required the petitioner to file its response by 23:59 hours on April 23, 2021.

Mr. Jain submitted that respondent authority proceeded to pass the impugned assessment order without dealing with the request for adjournment and without waiting for the timeframe given in the show cause notice-cum-draft assessment order, to expire.

It was urged on behalf of the petitioner that there has been a breach of the principles of natural justice, inasmuch as respondent authority failed to deal with the petitioner’s request for a short adjournment. The petitioner has pointed out that there has been undue haste by the respondent in passing the impugned assessment order, as he did not even wait for the completion of the timeframe given in the show cause notice-cum-draft assessment order, dated April 20, 2021, to file a response.

The division bench of Justice Rajiv Shakdher and Talwant Singh while setting aside the Faceless Assessment Order took judicial notice of the fact that the Central Board of Direct Taxes has issued a notification dated April 24.04.2021, whereby the timeframe for completion of assessment has been extended till June 30, 2021.

The Bench directed the Respondent authority to issue a notice, via e-mail to the petitioner, fixing the date and time for according a personal and Respondent shall accord personal hearing to the authorized representative of the petitioner, via video-conferencing. Lastly, Respondent will, thereafter, proceed to pass an assessment order, albeit, as per law

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