Court quashes assessment order, emphasizes SOP compliance and natural justice principles.

The High Court of Calcutta allowed the appeal and writ petition, quashing the assessment order dated 20th December, 2022. The Court emphasized the importance of adhering to the Standard Operating Procedure for faceless assessment orders and ensuring compliance with principles of natural justice in the assessment process.

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Issues involved:
The appeal challenges an assessment order under the Income Tax Act, 1961, alleging violation of natural justice and failure to follow the Standard Operating Procedure for faceless assessment orders.

Issue 1: Violation of principles of natural justice and SOP for faceless assessment orders

The appellant challenged the assessment order on the grounds of violation of natural justice and failure to adhere to the Standard Operating Procedure (SOP) for faceless assessment orders. The Single Bench had dismissed the writ petition stating that the Court cannot act as an appellate authority. The appellant contended that the challenge was not to the merits of the assessment but to the decision-making process. The SOP issued by the National Faceless Assessment Centre emphasized adherence to natural justice, reasonable opportunity to the assessee, and specified timelines for response to show cause notices. The impugned assessment order, while initially appearing to comply with the SOP, was found to be a verbatim extract of the show cause notice for a significant portion, indicating a lack of proper assessment procedure. Consequently, the Court quashed the assessment order, emphasizing that the assessing officer had reduced the procedure to an empty formality, leading to the allowance of the appeal and writ petition.

Outcome:
The High Court of Calcutta, comprising Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya, allowed the appeal and writ petition, quashing the assessment order dated 20th December, 2022. The Court highlighted the importance of following the Standard Operating Procedure for faceless assessment orders and ensuring adherence to principles of natural justice in the assessment process.

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