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DELHI HIGH COURT
RAJIV SHAKDHER, TALWANT SINGH
Modicare Foundation – Appellant
Versus
National Faceless Assessment Centre Delhi – Respondent
| Table of Content |
|---|
| 1. writ petition against assessment order. (Para 1) |
| 2. stay on operation of assessment order. (Para 2) |
| 3. variation of taxable income without notice. (Para 3) |
| 4. assessment order set aside; revenue to proceed legally. (Para 4 , 5) |
JUDGMENT
Rajiv Shakdher, J. (ORAL):
[Court hearing convened via video-conferencing on account of COVID-19]
1. This writ petition is directed against the assessment order dated 15.04.2021, passed under Section 143(3) read with Section 144B of the Income Tax Act 1961 (in short "the Act"), concerning assessment year (AY) 2018-2019.
1.1. Besides this, the assessee has also assailed the notice of demand, issued under Section 156 of the Act and the notice issued for initiating penalty proceedings, under Section 270A of the Act, dated 15.04.2021.
2. Notice in this writ petition was issued on 28.05.2021, when operation of the impugned assessment order, dated 15.04.2021, was stayed.
2.1. The principal grievance, which is articulated before us, on behalf of the petitioner, is that, although, the impugned assessment order has varied the taxable income to the detriment of the petitioner, no show cause notice- cum-draft assessment order was issued, a
The absence of a show cause notice in tax assessments violates natural justice, requiring annulment of any adverse variations to taxable income.
Mandatory issuance of show-cause notice under Section 144B of the Income Tax Act is essential in assessment proceedings; failure to do so invalidates the assessment order.
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.
A breach of natural justice occurs when an assessment order is finalized before the noticee's response deadline, invalidating the order.
Tax assessments must adhere to statutory procedures to uphold principles of natural justice, specifically the requirement for a draft assessment order as per Section 144B of the Income Tax Act.
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.
Assessment orders must be issued in compliance with procedural requirements, including mandatory draft orders and show cause notices to uphold principles of natural justice.
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.
Violation of Section 144B of the Income Tax Act and principles of natural justice.
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.
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