Assessment Order Quashed for A.Y. 2018-2019 Due to Lack of Show Cause Notice and Draft Order Violating Natural Justice

The HC quashed the assessment order and associated penalty for A.Y. 2018-2019, citing the lack of a show cause notice and draft assessment order, which violated statutory requirements and principles of natural justice. The Court directed the respondent to restart the assessment process, ensuring compliance with procedural fairness by providing the necessary notice and order within a specified timeframe. The petitioner agreed to cooperate and avoid unnecessary delays. The petition was allowed without costs, underscoring the importance of adhering to statutory procedures in assessment proceedings.

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Issues involved:
Challenge to assessment order for A.Y. 2018-2019 due to non-availment of opportunity while finalizing the order.

Detailed Analysis:
The petition challenged the assessment order for the Assessment Year (A.Y.) 2018-2019, highlighting the absence of an opportunity during the finalization of the order. The petitioner contended that the Assessing Officer disregarded binding precedents and statutory requirements, resulting in an addition of Rs. 11.47 Crore without issuing a show cause notice or providing a draft assessment order. The petitioner's representative cited a Bombay High Court decision in support of the argument. The Court granted interim relief and directed notice for final disposal by a specified date, emphasizing the importance of statutory compliance and natural justice principles.

The petitioner, an Orthopaedic Surgeon running a Spine Hospital, filed an income return offering a specific total income. Subsequently, the respondent assessed the income at a significantly higher amount without serving a show cause notice cum draft assessment order, depriving the petitioner of an opportunity for a personal hearing. The respondent refuted the allegations, stating that the delay in submission by the petitioner led to the assessment process timeline constraints under the faceless assessment scheme.

Both parties extensively presented their arguments, focusing on the central issue of the non-service of the show cause notice cum draft assessment order before the final assessment. The Court acknowledged the absence of the required notice and order, emphasizing that the respondent's justifications for the delay were insufficient. Despite the Assessing Officer's workload and time constraints, the Court deemed the excuses inadequate, emphasizing the importance of fairness and statutory compliance over administrative convenience.

Consequently, the Court quashed the assessment order and associated penalty, directing the respondent to restart the process by providing the necessary notice and order within a specified timeframe. The petitioner committed to cooperation and avoiding unnecessary adjournments. The Court allowed the petition without imposing any costs, emphasizing the significance of adhering to procedural fairness and statutory requirements in assessment proceedings.

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