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SUPREME COURT OF INDIA
M.R. Shah, C.T. Ravikumar, JJ.
The National Faceless Assessment Centre & Ors. - Appellants
Vs.
Automotive Manufacturers Private Limited - Respondents
CIVIL APPEAL NO. 1829 OF 2023 (Arising out of SLP (C) No. 1857 of 2023)
Decided On : 21-03-2023
| Table of Content |
|---|
| 1. appeal disposed of with order to correct procedural deficiencies. (Para 1) |
| 2. high court set aside assessment order due to procedural error. (Para 2) |
| 3. revenue argues against the writ petition under article 226. (Para 3) |
| 4. court acknowledges procedural requirement under section 144b. (Para 4) |
| 5. court remands matter to assessing officer for fresh assessment. (Para 5) |
ORDER :
1. Leave granted.
2. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Judicature at Bombay in Writ Petition (L) No. 16281/2021, by which the High Court in exercise of powers under Article 226 of the Constitution of India has set aside the Assessment Order declaring it as non est as the mandatory requirement under Section 144B of the INCOME TAX ACT , 1961 (for short “the Act”), namely, the show cause notice with a draft Assessment Order was not issued and served upon the assessee.
3. Shri Balbir Singh, learned ASG, appearing for the Revenue has submitted that, as such, the High Court ought not to have entertained the writ Petition under Article 226 of the Constitution of India challenging the order of assessment. It is submitted that, even otherwise, if the Hon’ble Court was of the opinion that the assessment proceedings were in breach of principles of natural justice inasmuch as the show cause notice with draft Assessment Order was not served in that case, the matter ought to have remanded to the Assessing Officer and with liberty in favour of the Assessing Officer to pass a fresh order in accordance with law and after following due procedure as required under Section 144B of the Act.
4. Having heard Shri Balbir Singh, learned ASG, appearing of the Revenue and Shri Dharan Gandhi, learned counsel appearing for the respondent-assessee and having gone through the impugned judgment and order passed by the High Court and considering the fact that the Assessment Order was passed without issuing a show cause notice with a draft Assessment Order, as was mandatorily required, under Section 144B of the Act, as such, it cannot be said that the High Court has committed any error. However, at the same time, considering the fact that the Faceless Assessment Scheme has been introduced recently and therefore, the Revenue ought to have been given some leverage to correct themselves and take corrective measures and therefore the High Court ought to have remanded the matter to the Assessment Officer to pass a fresh order in accordance with law, after following the due procedure, as required under the law, namely, more particularly, under Section 144B of the Act.
5. In view of the above for the reasons stated above, we modify the impugned judgment and order passed by the High Court and remand the matter to the Assessment Officer to pass a fresh Assessment Order, after following due procedure, in accordance with law under Section 144B of the Act.
All the contentions/defences which are available to the assessee on merits are kept open to be considered by the Assessing Officer in accordance with law and on its own merits.
With this, the present Appeal stands disposed of.
The court held that an assessment order is invalid if not preceded by a show cause notice, as required by Section 144B of the Income Tax Act.
Assessment orders issued without mandatory show-cause notice violate principles of natural justice, making them non est, despite the availability of an appellate remedy.
Mandatory procedures under the Income Tax Act for show cause notices and draft assessments must be followed to ensure natural justice; failure to comply renders the assessment order invalid.
Taxation - Show cause notice - Faceless assessment - No prior show cause notice as well as draft assessment order have been issued, there is a violation of principles of natural justice as well as ma....
A writ petition is maintainable in cases of violation of natural justice, even when an appeal exists, especially concerning mandatory procedures outlined in statutory law.
Violation of the principle of natural justice and mandatory procedure under the 'Faceless assessment Scheme' and Section 144B of the Income Tax Act, 1961 renders the assessment order, demand notice, ....
The mandatory nature of the provisions under Section 144B(1)(xvi)(b) and 144B(9) of the Income-tax Act, emphasizing the consequences of non-compliance with the procedural requirements.
The central legal point established in the judgment is the mandatory requirement of issuing a prior show cause notice and draft assessment order under the Faceless Assessment Scheme as stipulated in ....
Assessment orders under the Income Tax Act must comply with mandatory procedural requirements, including issuing a show-cause notice and draft assessment order, to uphold principles of natural justic....
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