2022 (12) TMI 1284 - HC - Income Tax

Court sets aside Assessment Order, citing lack of opportunity to respond. Remanded for reconsideration and hearing.

CS & Sons, Mumbai Versus The National Faceless Assessment Centre, Delhi & Ors.

CS & Sons, Mumbai Versus The National Faceless Assessment Centre, Delhi & Ors. - TMI Issues:Challenge to Order of Assessment under Income Tax Act, 1961 - Lack of reasonable opportunity to respond to Show Cause Notice - Violation of principles of natural justice.Analysis:The petitioner challenged the Order of Assessment dated 18th September 2022, issued under Section 143(3), r/w. Section 144B, of the Income Tax Act, 1961, for the Assessment Year 2020-21. The primary ground of challenge was the lack of a reasonable opportunity to respond to the Show Cause Notice dated 13th September 2022. The petitioner contended that the notice was received on the same day it was signed, giving less than two days to file a response by the specified deadline of 15th September 2022 at 11:00 a.m. Despite attempting to upload a reply on 16th September 2022, it was unsuccessful due to the portal being closed. The petitioner registered a grievance on the official portal and uploaded objections to the proposed variation on the same day. Subsequently, the assessment order was passed on 18th September 2022.The petitioner argued that since the objections were already available on the respondents' system, they could have been considered before issuing the assessment order. Additionally, it was contended that the Assessing Officer violated the Circular dated 3rd August 2022, specifically Clause N.1.3.1, which mandates a minimum of seven days for such cases. In response, the respondents' counsel pointed out that Clause N.1.3.2 grants the Assessing Officer the authority to shorten the seven-day period in certain circumstances, considering the deadline for completing the assessment.The court opined that the time provided to the petitioner to respond to the show cause notice was inadequate and illusory, leading to a violation of the principles of natural justice. Consequently, the court allowed the petition and set aside the Order of Assessment. The matter was remanded back to the Assessing Officer, instructing them to consider the objections filed in response to the Show Cause Notice dated 13th September 2022 within two weeks. The petitioner was also granted an opportunity to be heard in accordance with Section 144(6)(vii) of the Income Tax Act before the Assessing Officer proceeds to issue appropriate orders as per the law. The rule was made absolute in the mentioned terms, and the petition was disposed of.