Court sets aside assessment order due to technical glitches on income tax portal, remands for fresh consideration. The Court set aside the assessment order due to technical glitches on the income tax portal, remanding the matter for fresh consideration. The assessment ...
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Court sets aside assessment order due to technical glitches on income tax portal, remands for fresh consideration.
The Court set aside the assessment order due to technical glitches on the income tax portal, remanding the matter for fresh consideration. The assessment order, demand notice, and penalty notice issued on 8th July 2021 were annulled. The petitioner was given a two-week window to respond, with a warning of proceeding based on existing records if no response was filed. The respondents were directed to provide a personal hearing upon request and ensure compliance with the law. No costs were imposed, and the case was disposed of without making any observations on its merits.
Issues: Impugning assessment order on grounds of breach of natural justice due to technical glitches on new income tax portal.
The petitioner challenged an assessment order dated 8th July 2021, alleging it was passed in violation of natural justice principles. The petitioner accessed its e-proceedings folder on the new income tax portal on 5th July 2021, discovering a show cause notice dated 10th June 2021 under Section 142(1) had been issued. Despite the portal indicating a response due date of 21st July 2021, the assessment order was unexpectedly passed on 8th July 2021. The order included additions under Sections 14A and 68 of the Income Tax Act, along with a substantial demand. The petitioner contended that the order disregarded the portal issues faced by taxpayers and the response deadline of 21st July 2021, further highlighting the lack of a personal hearing.
In response, the affidavit stated that a final show cause notice was issued on 10th June 2021 with a hearing date of 14th June 2021, but due to a technical glitch attributed to system upgrades by the DGIT (System) CBDT, the order was passed prematurely on 8th July 2021. Acknowledging the technical issues, the respondents admitted to passing the order before the response deadline due to their unawareness of the correct date displayed on the portal.
The Court, considering the admitted technical glitch, deemed it appropriate to set aside the assessment order and remand the matter for fresh consideration. Consequently, the assessment order, demand notice under Section 156, and penalty notice under Section 271(1)(c) issued on 8th July 2021 were all annulled and remanded for reconsideration. The petitioner was granted a two-week window to file a response, with a warning that failure to do so would allow the respondents to proceed based on existing records. Additionally, the respondents were directed to provide a personal hearing upon the petitioner's request and to ensure the assessment order complies with the law.
The judgment clarified that no observations were made on the case's merits, and the petition was disposed of without any costs being imposed.
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