Court quashes Assessment Order 2018-19, orders re-assessment within 3 months.

The Court quashed the Impugned Assessment Order for Assessment Year 2018-19 due to procedural irregularities in the faceless assessment system. The case was remitted back to the respondent for a speaking order within three months, treating the quashed order as a show cause notice. The petitioner was given fifteen days to file a reply, and the respondent was directed to issue a new order within seventy-five days, ensuring compliance with natural justice principles. The writ petition was allowed without costs, and miscellaneous petitions were closed.

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Issues:
Challenge to Impugned Assessment Order for Assessment Year 2018-19 under Income Tax Act, 1961 - Faceless Assessment Procedure - Denial of Personal Hearing Opportunity.

Analysis:
The petitioner challenged the Impugned Assessment Order dated 27.08.2021 for the Assessment Year 2018-19, which was issued under the Income Tax Act, 1961. The petitioner filed a regular return on 24.10.2018 under Section 139 of the Act. Subsequently, notices were issued under Section 143(2) of the Act on 22.09.2019 and 04.10.2019. With the insertion of Section 144B into the Act, the faceless assessment procedure was introduced. The petitioner received show cause notices on 31.05.2021 and 23.06.2021, providing an opportunity to respond and request a personal hearing. Despite the petitioner's request for a personal hearing, the respondent passed the impugned order without granting this opportunity, citing the petitioner's failure to use the option for a personal hearing in the new system effective from 01.04.2021.

The respondent contended that the petitioner had the chance to request a personal hearing by clicking the option in the show cause notice, which the petitioner allegedly ignored. The learned counsel for the petitioner argued in favor of the writ petition, emphasizing the procedural irregularities and lack of natural justice in the faceless assessment system. The petitioner had responded to the show cause notice and requested a personal hearing both in writing and through the system. Acknowledging the challenges posed by the new faceless assessment system and the petitioner's unfamiliarity with it, the Court quashed the impugned Assessment Order and remitted the case back to the respondent to pass a speaking order within three months from the date of the Court's order.

The Court directed that the quashed order be treated as a show cause notice, requiring the petitioner to file a written reply within fifteen days. The respondent was instructed to issue a new order within seventy-five days, ensuring compliance with the principles of natural justice. The respondent was further directed to make necessary arrangements on the portal for the fresh proceedings in line with the Court's order. Consequently, the writ petition was allowed with the specified observations, without imposing any costs. The connected miscellaneous petitions were closed accordingly.

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