Court sets aside assessment order and notices under Income Tax Act due to failure to provide mandatory documents.

The court set aside the assessment order dated 30th April, 2021, and the consequential notices issued under the Income Tax Act, 1961, as the petitioner was not provided with the mandatory draft assessment order and show cause notice, violating statutory rights. The matter was remanded to complete assessment proceedings within twelve weeks in compliance with the law, without expressing any opinion on the merits of the controversy.

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Issues:
Challenging assessment order dated 30th April, 2021 and consequential notices under Income Tax Act, 1961.

Analysis:
The petitioner filed a writ petition challenging the assessment order dated 30th April, 2021, and the subsequent notices issued under Section 156 and Section 274 read with Section 270A of the Income Tax Act, 1961. The assessment order was passed under Section 143(3) read with Section 144B of the Act, raising a significant tax and interest demand without serving the petitioner with the mandatory draft assessment order along with a show cause notice as required by Section 144B of the Act. The declared income of the petitioner was varied to its prejudice without providing an opportunity to respond. The respondent sought time to review the matter, and the operation of the impugned orders was stayed.

The counsel for the respondent informed the court that they received instructions to set aside the impugned orders and remand the matter to the Assessing Officer for fresh determination. The court noted that under Section 144B(1)(xvi)(b) of the Act, the National Faceless Assessment Centre was required to provide an opportunity to the assessee to show cause before making any prejudicial variation to the income. However, in this case, no show cause notice was served on the petitioner, depriving them of the statutory right to respond and present supporting documents before the final assessment order was passed.

Consequently, the court set aside the assessment order dated 30th April, 2021, and the consequential notices issued under various sections of the Act. The matter was remanded to the respondent No. 1 to complete the assessment proceedings within twelve weeks in compliance with the law. The court clarified that it did not express any opinion on the merits of the controversy in the writ petition. With these directions, the writ petition was disposed of.

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