The Bombay High Court has held that proper opportunity shall be given to the assessee to pass an order and direct the Assessing Officer to consider the income tax faceless assessment.
The petitioner, Pankaj filed a Writ Petition against the assessment order pursuant to the scrutiny assessment under E-Assessment Scheme-2019. The principal ground of challenge as raised to the assessment order is based on the breach and non-compliance of the principles of natural justice inasmuch as there was no proper and sufficient opportunity granted to the petitioner to respond to the show-cause notice issued by the AO.
Under Section 143(3) read with Section 144-B of the Income Tax Act, 1961 by which the income of the assessee stands assessed. Consequent thereupon on 10-4-2021 a show-cause notice has been issued on the same day to the petitioner seeking his response as to why the assessment should not be completed as per the draft assessment order. The petitioner was called upon to respond to the said show-cause notice by 4.00 p.m. of 13.04.2021 which is within a period of three days from the receipt of that notice. In response thereto, the petitioner on 12.04.2021 made a request for adjournment on medical grounds and prayed that such adjournment is granted till 21.04.2021. The petitioner also indicated on the same day that the matter would require explanation due to the complexity of facts and hence requested for personal hearing through video conference. It is the further case of the petitioner that on 21.04.2021 a detailed reply to the show causes notice was submitted by the petitioner. The AO however on 14.05.2021 issued the assessment order in question but without considering the reply as furnished by the petitioner.
It is submitted by the learned counsel for the petitioner that the aspect of non-consideration of reply is sought to be indicated by referring to the contents of the assessment order wherein it was stated that the assessee had not submitted any proper explanation till 20.04.2021. Though the petitioner responded to the show cause notice on 21.04.2021 and the assessment order was passed much later on 14.05.2021, the petitioner’s explanation has not been taken into consideration. This has resulted in denial of a proper opportunity to the petitioner and failure to take into consideration his response to the show-cause notice. In other words, despite seeking adjournment on 12.04.2021 till 21.04.2021 and thereafter filing reply on 21.04.2021, the same has not been considered by the AO while issuing the assessment order.
The division bench of Justice A.S.Chandurkar and Justice Pushpa V. Ganediwala, held that “thus, despite the petitioner responding to the show cause notice much prior to issuance of the assessment order, there is no consideration of the reply given by the petitioner to the show cause notice. A mere statement now in the affidavit in reply that the petitioner’s response to the show cause notice did not contain any new or material fact cannot be accepted as such reason/consideration is not found in the impugned assessment order. The validity of the impugned assessment order would have to be judged from its contents and the same cannot be supported by extraneous material in the form of an affidavit in reply. Hence for this reason the challenge to the assessment order dated 14.05.2021 is liable to succeed and the proceedings are remanded to the AO for fresh consideration in accordance with law after giving due opportunity of hearing to the petitioner”. Further held by the court that “it is true that an alternate remedy, by way of statutory appeal is available to the petitioner. However, in view of the fact that it is apparent that the assessment order has been issued without granting the due and proper opportunity to the petitioner, we are not inclined to relegate the petitioner to avail that statutory remedy”.
Pankaj s/o Roshan Dhawan vs National e-Assessment Centre
CITATION: 2022 TAXSCAN (HC) 215
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