Court overturns tax assessment order, cites lack of compliance time, emphasizes natural justice principles

The High Court set aside an income tax assessment order due to insufficient time provided for compliance, violating natural justice principles. The petitioner was directed to comply within three weeks, and the Assessing Officer was instructed to proceed with the assessment in accordance with the law. The importance of adhering to natural justice principles in income tax assessments under the specified sections of the Income Tax Act was emphasized in the judgment. The Writ Petition was disposed of with no costs imposed, and the connected Miscellaneous Petition was closed.

---

---

Issues: Violation of principles of natural justice in an income tax assessment order under Section 143(3) read with Sections 143(3A) and 143(3B) of the Income Tax Act, 1961.

The judgment delivered by the High Court addressed the violation of natural justice principles in an income tax assessment order. The impugned order, dated 15.04.2021, was challenged primarily on the grounds of this violation. The faceless assessment scheme mandates issuing a show cause notice to the assessee along with a draft assessment order, allowing the assessee to accept, object, or request a personal hearing. In this case, the notice and draft order were issued on 12.04.2021, with the petitioner given until 14.04.2021 to respond, providing only 24 hours for compliance after receiving the documents via email on 13.04.2021.

The Court found the time provided for compliance to be insufficient, constituting a violation of natural justice principles. Consequently, the impugned order was set aside. The petitioner was directed to comply with the directions in the notice dated 12.04.2021 within three weeks and inform the Assessing Officer accordingly. The respondents were instructed to facilitate the receipt of objections and enable the portal for submission. The Assessing Authority was directed to hear the petitioner, proceed with the assessment, and complete it in accordance with the law.

In conclusion, the Writ Petition was disposed of with no costs imposed, and the connected Miscellaneous Petition was closed. The judgment highlighted the importance of adhering to natural justice principles in income tax assessments under the specified sections of the Income Tax Act, ensuring fairness and procedural correctness in the assessment process.

---