Court sets aside assessment order under Faceless Assessment Scheme emphasizing technical challenges & natural justice principles.

The Court set aside the assessment order under the Faceless Assessment Scheme, emphasizing the petitioner's technical challenges and the need for natural justice principles. The Department's contention regarding non-filing of income returns was countered by the petitioner's eligibility for Section 80P deductions. The Court directed a re-assessment with a personal hearing for the petitioner, highlighting the importance of procedural fairness. The Writ Petition was allowed without costs, stressing the significance of providing a fair opportunity for the petitioner in assessment proceedings.

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Issues:
Quashing of assessment order under Faceless Assessment Scheme, non-furnishing of income returns for assessment year 2017-2018, technical difficulties faced by the petitioner society, application of Section 80P deductions, principles of natural justice in assessment proceedings.

Analysis:
The petitioner, a primary agricultural cooperative society, sought to quash the assessment order passed under the Faceless Assessment Scheme. The society, not profit-oriented, faced technical challenges in submitting documents online due to its rural location and lack of qualified personnel. Despite furnishing required documents, the respondent issued a demand notice for a substantial amount, including interest. The petitioner requested rectification under Section 147 r/w.144(B) of the Income Tax Act, emphasizing eligibility for deduction under Section 80P for the assessment year 2017-2018. The petitioner contended that the proceedings were improper due to the retrospective effect of an amendment post-2019 and lack of a personal hearing to explain their position.

The Department argued that the petitioner failed to file income returns for 2017-2018 despite multiple notices and a draft assessment order. The Department highlighted that the petitioner, although claiming technical limitations, eventually submitted documents through the portal. Acknowledging the society's role in agriculture, the Department contested the petitioner's plea based on technical challenges, emphasizing compliance with income tax requirements.

The Court recognized the petitioner's status as a primary agricultural cooperative society serving agriculturists and the significance of Section 80P benefits. Considering the technical difficulties faced by the society and the swift passage of the assessment order, the Court emphasized the principles of natural justice and the need for a personal hearing. Consequently, the Court set aside the assessment order dated 26.03.2022, directing the Department to provide the petitioner with an opportunity for submission, personal hearing, and due consideration of documents before finalizing the assessment in accordance with the law.

In conclusion, the Writ Petition was allowed, with no costs incurred, and connected miscellaneous petitions were closed. The judgment underscored the importance of affording the petitioner a fair opportunity to present their case and ensure procedural fairness in the assessment proceedings.

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