Violation of natural justice due to insufficient time provided for compliance in tax assessments.

MURAHARI SRI RAMAN, J.

Assailing the order dated 11.03.2025 passed by the opposite party no.4-The Assessment Unit, Income Tax Department, The National Faceless Assessment Centre under Section 147 read with Section 144B of the Income Tax Act, 1961 pertaining to assessment year 2017-18, the petitioner has come up before this Court invoking provisions under Articles 226 and 227 of the Constitution of India.

2. The case of the petitioner was selected for reassessment under Section 147 of the Income Tax Act, 1961 (“I.T. Act”, in short) having filed its return of income on 23.03.2024 in ITR-3 under Section 148 pertaining to assessment year 2017-18. On 16.01.2025, in continuation with the assessment proceedings, opposite party no.4- The Assessment Unit, Income Tax Department, The National Faceless Assessment Centre instructed the petitioner to upload certain evidences granting him barely four days, which is considered by the petitioner to be insufficient for compliance.

3. Since inadequate time was granted for uploading the documents and there was insufficient space allotted for uploading, it took considerable time for scanning the documents and submitting the same before the assessing officer. However, the assessment has been framed raising demand to the tune of Rs.1,36,,20,813/-.

4. Sri Chitrasen Parida, learned counsel appearing for the petitioner drew attention of this Court to Standard Operating Procedure dated 03.08.2022 issued by the Ministry of Finance, Central Board of Direct Taxes National Faceless Assessment Centre, Paragraph-N.1.3 of which is reproduced hereunder:-

“To ensure adherence to the principles of natural justice and reasonable opportunity to the assesse, timelines to be given for obtaining response to the SCN shall be:

N.1.3.1 Response time of 7 days from the issue of SCN.

N.1.3.2 Response time of 7 days may be curtailed, keeping in view the limitation date for completing the assessment.”

4.1. He submitted that the show cause notice under Section

144(3) being issued on 16.01.2025 fixing due date of submission of reply on 20.01.2025, the same is contrary to the Standard Operating Procedure. He further submitted that since voluminous record was to be uploaded on the portal for faceless assessment and the system having limited space, the petitioner could not submit necessary record within the stipulated period. He fervently prays for setting aside the assessment order so as to grant the petitioner to avail one opportunity to present its matter before the Faceless Assessment Unit.

5. Sri Subash Chandra Mohanty, Senior Standing Counsel along with Mr. Avinash Kedia, learned Junior Standing Counsel for the Income Tax Department on instructions submitted that the Faceless Assessment Unit has stipulated the date by which the petitioner was required to furnish documents. He further submitted that within the period stipulated, the petitioner could very well upload the documents available with him. The Assessing Authority having considered the documents available with him passed the appropriate order, which warrants no interference.

6. Section 144B (6)(xi) of the I.T. Act empowers the Principal Chief Commissioner or the Principal Director General, as the case may be, in-charge of the National Faceless Assessment Centre, to lay down the standards, procedures and processes for effective functioning of the National Faceless Assessment Centre and the units set up, in an automated and mechanised environment with prior approval of the Board.

7. The Standard Operating Procedure under the Faceless Assessme