No Show-Cause Notice issued with Draft Assessment: Gujarat HC quashes Final Assessment Order [Read Order]

A division bench of the Gujarat High Court has quashed an assessment order framed under section 144B of the Income Tax Act, 1961 on the ground that a notice was not issued along with the draft assessment.

During the proceedings, the assessee, M/s Symphony Ltd has vide the letters dated 30.05.2021 and 01.07.2021 respectively brought to the notice of the respondent that it had already submitted its response against the notice dated 17.04.2021.

Before the High Court, the assessee contended that the impugned assessment order came to be passed without taking into consideration the reply filed by the writ applicant and also without affording any opportunity of video conferencing. It was also submitted that the impugned order passed under Section 143(3) read with Section 144B of the Act could be said to be passed in violation of the principles of natural justice.

While granting relief to the assessee, Mr. Justice J.B.Pardiwala and Ms. Justice Nisha M. Thakore held that it is by now well settled that the issuance of a show cause notice along with the draft assessment order is sine qua non before passing an order under Section 144B of the Act.

“Undisputedly, in the case on hand, no show cause notice came to be issued along with draft assessment order and in such circumstances, the final order of assessment could be said to be without jurisdiction. We are of the view that the matter should be remitted to the Assessing Officer for de novo proceedings,” the Court observed.

Concluding the order, the Court held that “In the result, this writ application succeeds and is hereby allowed. The impugned assessment order dated 30.07.2021 for the A.Y. 2018-19 is hereby quashed and set aside. The matter is remitted to the Assessing Officer. The Assessing Officer shall issue a show cause notice with the draft assessment order so that the writ applicant can respond to the same by an appropriate reply.”

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