IMPORTANT POINT
The court established that failure to provide a personal hearing in tax assessments violates natural justice, necessitating the quashing of the assessment order.

JUDGMENT :

(Bhargav D. Karia, J.) :

1. Heard learned advocate Mr. B.S.Soparkar for the petitioner and learned Senior Standing Counsel Mr. Karan Sanghani for the respondents.

2. Rule returnable forthwith. Learned Senior Standing Counsel Mr. Karan Sanghani waives service of notice of rule for the respondents.

3. Having regard to the controversy in the narrow compass, with the consent of the learned advocates for the parties, the matter is taken up for hearing.

4. By this petition under Article 226 of the Constitution of India , the petitioner has challenged Assessment Order dated 18.03.2024 passed by the Assistant Commissioner of Income Tax, Rajkot, under section 143(3) read with section 263 of the Income Tax Act, 1961 (for short ’the Act’)for A.Y.2018-19.

5. Brief facts of the case are as under:

5.1 The Petitioner Company was incorporated on 12.04.2017 in the business of manufacturing of ceramic vitrified tiles. The Petitioner filed its return of income for the Assessment Year 2018-19 on 21.09.2018 declaring loss of Rs.4,33,27,151/-. Thereafter, the case of the Petitioner was selected for complete scrutiny for three issues including the issue of Share capital. Assessment order u/s 143(3) was passed by the Respondent no. 2 on 18.01.2021 accepting returned income.

5.2 Thereafter the case of the Petitioner was taken up for revision u/s 263 of the Act and the assessment order dated 18.01.2021 was set aside vide order dated 27.03.2023. The Petitioner has appealed against the order u/s 263 of the Act dated 27.03.2023 and the same is pending before the Income Tax Appellate Tribunal.

5.3 Meanwhile, the proceedings consequent to the order u/s 263 of the Act commenced and the following correspondence took place:

6. Learned advocate Mr. Soparkar submitted that the petitioners specifically asked for personal hearing in both the submissions dated 15.02.2024 and 08.03.2024 but the respondent No.1 passed impugned order on 18.03.2024 without providing opportunity of personal hearing in violation of principle of natural justice and passed the impugned assessment order, assessing total income at Rs. 12,59,28,000/- raising demand of Rs. 14,00,76,320/- under section 143(3) read with section 263 of the Act.

6.1 It was further submitted that the impugned assessment order is passed without jurisdiction as the initially case was with National Faceless Assessment Center. However, intimation dated 12.02.2023 for completion of the assessment in accordance with the procedure of section 144B(8) of the Act was issued for the year under consideration and thereafter the jurisdictional assessment officer issued a notice under section 142(1)of the Act on 29.11.2023. It was submitted that the petitioner has not received any notice regarding transfer of case under section 144B(8) of the Act. It was submitted that the assessment order also does not refer to any such transfer of case from National Faceless Assessment Center to that of jurisdictional Assessing Officer under section 144B(8) of the Act, after passing of the order dated 27.03.2023 by the PCIT, Rajkot under section 263 of the Act. It was therefore submitted that the jurisdictional Assessing Officer has wrongly assumed the jurisdiction to pass order in absence of transfer of case under section 144B(8) of the Act.

6