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of <h1>Court sets aside assessment order, emphasizes statutory compliance in Income Tax Act proceedings.</h1> <h3>DIPAK NATWARLAL DHOLAKIYA Versus ADDL/JT/DY/ASST COMMISSIONER OF INCOME TAX</h3> DIPAK NATWARLAL DHOLAKIYA Versus ADDL/JT/DY/ASST COMMISSIONER OF INCOME TAX - TMI Issues:Challenge to validity of assessment order under Income Tax Act for AY 2016-2017 based on Section 143(3) read with Section 263 and Section 144B.Detailed Analysis:1. Validity of Assessment Order:The petitioner challenged the assessment order dated 31.03.2022 under Section 143(3) read with Section 263 and Section 144B of the Income Tax Act for AY 2016-2017. The respondent assessed the total income at Rs.2,28,98,030/- after making an addition of Rs.39,87,750/-. The petitioner, a partner, had filed the Return of Income declaring total income at Rs.1.89 lakh. The Principal Commissioner of Income Tax set aside the previous assessment and directed an inquiry into exempt LTCG. The fresh assessment made an additional addition, raising a demand of Rs.1.5 crore for AY 2016-2017.2. Prayers in the Petition:The petitioner sought various reliefs, including quashing the impugned assessment order, notice of demand, and penalty under Section 274 read with Section 271(1)(c) of the Act. The petitioner also requested to maintain status quo until the final disposal of the petition and to pass any further orders as deemed proper in the interest of justice.3. Arguments and Decision:The petitioner contended that the assessment order and consequential notices were in violation of natural justice as there was insufficient time granted to respond to the notice. The Court noted that the time given for response was less than four hours, which was deemed a violation of natural justice. The Court emphasized the importance of complying with statutory provisions, specifically Section 144B of the Act, related to faceless assessment schemes. The non-compliance of statutory provisions and the inadequate time provided for response led the Court to interfere and quash the assessment order dated 31.03.2022 for AY 2016-2017.4. Final Judgment:The Court allowed the petition, setting aside the assessment order and all consequential actions and notices. However, the respondent was not precluded from initiating further actions from the stage where it was left, provided the petitioner cooperates. The judgment highlighted the significance of adhering to statutory provisions and principles of natural justice in assessment proceedings under the Income Tax Act.By: *Helpful Assistant*
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