Court overturns assessment order by National Faceless Assessment Centre for 2015-16, citing failure to consider responses adequately

The Court set aside the assessment order dated 29th March 2022 issued by the National Faceless Assessment Centre for the Assessment year 2015-16, due to a failure to consider the Petitioner's responses adequately. The matter was remanded for fresh consideration by the Jurisdictional Assessing Officer in compliance with Section 144B of the Income Tax Act. Consequently, the assessment order, notice of demand, and show cause notice were quashed, with directions for a new assessment order to be issued within a specified timeframe after affording the Petitioner an opportunity to be heard. The petition was allowed without costs.

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Issues:
1. Petitioner aggrieved by order under Income Tax Act for Assessment year 2015-16.
2. Petitioner's charitable Trust did not file return due to management disputes.
3. Income Tax Officer issued notice for escaped assessment for 2015-16.
4. Petitioner participated in reassessment proceedings.
5. Notices issued by National Faceless Assessment Centre for documents.
6. Petitioner responded to notices but faced time constraints.
7. NFAC issued show cause notice and assessment order leading to demand.
8. Petitioner claims violation of natural justice principles and lack of opportunity to be heard.
9. NFAC passed assessment order without considering Petitioner's response.
10. Respondents seek to set aside assessment orders for fresh consideration.
11. Court finds fit to set aside assessment order and remand for fresh consideration.

Analysis:
1. The Petitioner, a charitable Trust, faced issues with filing tax returns due to management disputes causing delays in compiling accounts. The Income Tax Officer issued a notice for escaped assessment for the Assessment year 2015-16, to which the Petitioner responded by participating in reassessment proceedings.
2. The National Faceless Assessment Centre issued various notices calling for documents, to which the Petitioner responded within the given time frame, highlighting challenges faced due to time constraints.
3. Despite the Petitioner's responses, the NFAC issued a show cause notice and assessment order, leading to a substantial demand. The Petitioner argued a violation of natural justice principles and lack of opportunity to be heard, emphasizing that their response was not considered in the final assessment order.
4. The Court, after examining Section 144B of the Income Tax Act, found that the assessment order was passed without considering all relevant material, leading to a decision to set aside the assessment order dated 29th March 2022. The matter was remanded back for fresh consideration by the Jurisdictional Assessing Officer in accordance with the provisions of Section 144B.
5. Consequently, the assessment order, notice of demand, and show cause notice were quashed and set aside, directing the Jurisdictional Assessing Officer to pass a fresh assessment order within a specified period after giving the Petitioner an opportunity to be heard. All contentions were left open, and the petition was allowed without costs.

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