High Court of Gujarat ensures fair assessment proceedings by quashing order due to service notice glitch

The High Court of Gujarat intervened in a case where the absence of service of notice under Section 142(1) due to a technical glitch prejudiced the petitioner's rights. Emphasizing procedural fairness and the impact of technological issues, the Court quashed the assessment order and directed a reevaluation from the stage of the notice under Section 142(1) to uphold due process and protect the petitioner's rights. The judgment highlighted the importance of addressing such deficiencies to ensure fair assessment proceedings.

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Issues:
- Absence of service of notice under Section 142(1)
- Validity of assessment order under Section 147 read with Section 144B

Analysis:

Issue 1: Absence of service of notice under Section 142(1)
The petitioner, a company, filed its return of income for A.Y. 2017-18. The respondent issued a notice under Section 148 dated 31.3.2021 for reassessment. The petitioner raised objections to the non-speaking order disposing of objections on 9.9.2021. Subsequently, the petitioner received another order disposing of objections on 19.3.2022 through email. The petitioner claimed not to have access to the notice under Section 142(1) and objected to the assessment order passed on 30.3.2022. The respondent denied the petitioner's claims, stating that due procedure was followed. The Court noted the absence of the notice dated 21.2.2022 on the web portal, emphasizing the importance of technological advancements in the income tax department. The Court held that the technical glitch in not serving the notice prejudiced the petitioner's rights, warranting interference. The Court directed the matter to be sent back to the authority from the stage of the notice under Section 142(1) for proper adjudication, ensuring the petitioner's opportunity to be heard.

Issue 2: Validity of assessment order under Section 147 read with Section 144B
The petitioner contended that the assessment order under Section 147 read with Section 144B was non-est due to a violation of statutory provisions. The respondent, in the affidavit-in-reply, defended the correctness of the assessment order, stating it was passed following due procedure. The Court, after considering the submissions, focused on the absence of service of the notice under Section 142(1) and the importance of technological glitches affecting the rights of the parties. The Court emphasized the need to ensure proper procedures and opportunities for the petitioner, especially in the context of National Faceless Assessment Centre. Consequently, the Court quashed the assessment order and directed the matter to be reconsidered from the stage of the notice under Section 142(1) to safeguard the petitioner's rights. The petitioner was given an opportunity to respond, and subsequent stages were to be decided in accordance with the law, without prejudicing the rights of either party.

In conclusion, the High Court of Gujarat held that the absence of service of the notice under Section 142(1) due to a technical glitch warranted interference in the assessment proceedings. The Court emphasized the importance of upholding procedural fairness and ensuring that parties are not prejudiced by technological shortcomings. The judgment directed a reconsideration of the matter from the initial stage of the notice under Section 142(1) to safeguard the petitioner's rights and ensure due process in the assessment proceedings.

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