The central legal point established in the judgment is that the word 'may' in a notification should be interpreted in context, and in this case, it was held to be mandatory, requiring the authority to afford an effective opportunity of hearing prior to finalizing the assessment.

JUDGMENT

(Prayer: Writ Petitions filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari, to quash the assessment order bearing DIN: ITBA/AST/S/143(3)/2020-21/1031796367(1) dated 26.03.2021 passed by the respondent.)

1. Heard Mr.Anand Sashidharan, learned counsel for the petitioner and Mrs.Hema Muralikrishnan, learned Senior Standing Counsel for the respondent.

2. The challenge in this Writ Petition is to an order of assessment dated 26.03.2021 passed under Section 143(3) read with Sections 143(3A) and 143(3B) of the Income Tax Act, 1961 (in short 'Act'). The main challenge is on the ground of violation of principles of natural justice and lack of affording of personal hearing by the authority prior to finalising the assessment.

3. The impugned assessment relates to assessment year 2018-19. Show cause notice containing draft assessment proposals was issued on 04.02.2021, to which, the petitioner replied promptly on 06.02.2021 along with supporting documents. On 22.02.2021, there was a specific request from the petitioner seeking personal hearing prior to finalisation of assessment.

4. There is no dispute on this position. In fact, the request for personal hearing has been received by the respondent. Notwithstanding this, the assessment has come to be completed without affording an opportunity of personal hearing as sought for.

5. In this connection, my attention is drawn to Notification, being Notification 61 dated 12.09.2019, as amended by Notification No.60 dated 13.08.2020, especially clause (5), in terms of which, e-assessments have been finalised. The relevant portion of Clause (5) reads as follows:

5. Procedure for assessment. — (1) The assessment under this Scheme shall be made as per the following procedure, namely: —

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(xvi) the National e-assessment Centre shall examine the draft assessment order in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to, —

(a) finalise the assessment as per the draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if any, to the assessee, alongwith the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment; or

(b) provide an opportunity to the assessee, in case a modification is proposed, by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the draft assessment order; or

(c) assign the draft assessment order to a review unit in any one Regional e-assessment Centre, through an automated allocation system, for conducting review of such order.

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6. The defence of the respondent turns upon the use of the word 'may' in clause (xvi) above as per which the Department seems to indicate that an opportunity of hearing is only optional. I disagree. Proceedings for assessment result in a civil liability upon the assessee and the word 'may' utilized therein, must be read as 'shall'. It is incumbent upon the authority to afford effective opportunity of hearing prior to finalising of the assessment. All the more in a case such as the present, where the assessee has itself sought such opportunity.

7. The prayer in this Writ Petition is restricted to certiorari and hence the matter can well be closed by quashing the order for the infraction of principles of natural justice. However, learned counsel for the respondent would plead that the matters be remanded to the file of the assessing authority for correction of the error and completion from that stage onwards.

8. No objection is put forth by the petitioner/learned counsel for the petitioner to the aforesaid request. That apart, the violation is one of procedure, which is curative in nature. Hence, and also bearing in mind the following decisi