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of <h1>Assessment order under Section 143(3) set aside for denying personal hearing despite turnover adjustments and compensation additions</h1> <h3>Shyam Communication Systems Versus Deputy Commissioner of Income Tax</h3> Shyam Communication Systems Versus Deputy Commissioner of Income Tax - [2024] 470 ITR 25 (Del) Issues involved:The judgment involves challenges against the assessment order, notice of demand, and notice initiating penalty under the Income Tax Act, 1961 for Assessment Year 2018-19.Assessment Order:The Assessing Officer added to the petitioner firm's taxable income based on compensation received and variance in turnover figures between the Income Tax Return and GST returns. The AO issued a notice under Section 142(1) prior to passing the assessment order, seeking details on capital account, rental receipts, turnover, and VAT returns. The petitioner responded by furnishing details of the capital account and partners' ledger account.Principles of Natural Justice:The petitioner contended that there was a violation of principles of natural justice as no personal hearing was granted, and the AO did not call for additional documents before making the additions to the income. The respondent argued that the assessment order should not be interfered with as an appeal remedy is available.Judgment:The Court found an infraction of natural justice principles due to the lack of personal hearing and additional document requests. The assessment order was set aside, granting liberty to the AO to pass a fresh order after providing a personal hearing to the petitioner. The petitioner was directed to furnish any required information, and if aggrieved, could seek appropriate legal recourse. The notice of demand and penalty were also set aside, and the application was closed.
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