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MANMOHAN, NAVIN CHAWLA
MakaIndustries Pvt. Ltd. – Appellant
Versus
Assist Commissioner Of Income Tax Central Circle 29 – Respondent
JUDGMENT
Manmohan, J. - The petition has been heard by way of video conferencing.
2. Present writ petition has been filed challenging the Assessment order dated 15th June, 2021 passed under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') in case of the petitioner for the assessment years 2018-19 on the ground that the regular assessment proceeding in the case of the petitioner had already stood concluded vide assessment order dated 26th November, 2019 and the respondent Assessing Officer had become functus officio.
3. The learned Predecessor Division Bench while issuing notice on 07th July, 2021 had stayed the operation of the impugned Assessment Order dated 15th June, 2021. The order dated 07th July 2021 is reproduced hereinbelow:
"W.P.(C) 6155/2021 & CM No.19527/2021 [Application filed on behalf of the petitioner seeking stay on the operation of the impugned assessment order dated 15.06.2021 and consequential actions]
2. Via this writ petition, inter alia, challenge is laid to the assessment order dated 15.06.2021 passed under Section 143(3) of the Income Tax Act, 1961 (in short "the Act"), concerning the assessment year (AY) 2018-2019.
2.1. Mr. Salil
The court emphasized the importance of jurisdiction and the inadvertent issuance of conflicting assessment orders, leading to the quashing of the impugned assessment order dated 15th June, 2021.
The court held that an assessment officer cannot re-initiate proceedings after a case has been concluded, as it renders the officer functus officio.
Violation of principles of natural justice due to failure to provide a reasonable opportunity to file a reply to the Show Cause Notice and draft assessment order.
Assessment orders must uphold principles of natural justice, ensuring affected parties have a reasonable opportunity to respond, particularly in cases involving technical barriers to communication.
The assessment order was invalid post 1st April 2021 due to non-compliance with mandatory provisions under the Income Tax Act and principles of natural justice.
Mandatory procedures must be followed in tax assessments, ensuring that parties are given prior notice and opportunity for a hearing to uphold principles of natural justice.
An assessment order can be challenged through a writ petition on jurisdictional grounds even if an appeal has been filed, especially where the order is invalid due to procedural changes.
Assessment orders must respect natural justice, providing parties an effective opportunity to respond, especially during extraordinary situations like a pandemic.
The obligation of the revenue to consider the request for a personal hearing and the absence of framed standards, procedures, and processes for dealing with such requests.
The assessment order is to be passed only after considering the reply of the assessee as per Section 144B(1)(xxiv) of the Income Tax Act, and failure to do so constitutes a violation of the mandatory....
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