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DELHI HIGH COURT
RAJIV SHAKDHER, TALWANT SINGH
Smart Vishwas Society – Appellant
Versus
National Faceless Assessment Centre Delhi – Respondent
| Table of Content |
|---|
| 1. violation of section 144b of the act. (Para 4) |
| 2. assessment order set aside for legal non-compliance. (Para 5 , 6) |
| 3. permission for fresh assessment with rights preserved. (Para 7 , 8) |
JUDGMENT
[Court hearing convened via video-conferencing on account of COVID-19]
Rajiv Shakdher, J. (Oral)--On the previous date, i.e., 18.05.2021, we have recorded the following: -
"3. Via this writ petition, a challenge is laid to the assessment order dated 15.04.2021 and consequential orders passed by respondent no. 1 in view of the fact that although the petitioner's declared income was varied, no show-cause notice cum draft assessment order was issued, as mandated under Section 144(B) [sic: Section 144B] of the INCOME TAX ACT , 1961 (in short `the Act').
4. Accordingly, issue notice.
4.1 Mr. Ruchir Bhatia, who appears on behalf of the respondent/revenue, accepts notice.
4.2 Mr. Bhatia says that he will revert with instructions. In case instructions are received to resist the petition, a counter-affidavit will be filed before the next date of hearing.
5. List the matter on 02.06.2021.
6. In the meanwhile, there shall be a stay on the operation of the assessment order dated 15.04.
The absence of a show cause notice in tax assessments violates natural justice, requiring annulment of any adverse variations to taxable income.
Procedural safeguards mandated under the Income Tax Act must be adhered to, including issuing a show cause notice to the assessee before passing an assessment order.
The court established that a draft assessment order under the Income Tax Act should be treated as a show cause notice, ensuring procedural fairness.
The assessment order was set aside due to breach of natural justice, specifically failure to consider the petitioner's objections filed before the order was made.
A breach of natural justice occurs when an assessment order is finalized before the noticee's response deadline, invalidating the order.
Failure to issue a draft assessment order and show cause notice in tax assessments is a violation of statutory procedures and natural justice, justifying the annulment of the assessment order.
The failure to consider the petitioner's reply and grant a hearing led to the setting aside of the assessment order and the direction for a fair hearing and speaking order by the Assessing Officer.
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.
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.
The court reaffirmed that assessments must comply with statutory procedures to ensure natural justice, nullifying orders that do not adhere to the stipulated process outlined in Section 144B of the I....
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