Supreme Court Overturns High Court Decision on Tax Assessment Order Compliance

The Supreme Court allowed the appeal against the High Court's decision, which had set aside the Assessment Order due to non-compliance with Section 144B of the Income Tax Act. The Court emphasized the necessity of issuing a show cause notice with a draft Assessment Order to the assessee. The High Court's order was modified, and the matter was remanded to the Assessment Officer for a fresh Assessment Order, ensuring compliance with the law. The Court directed that all contentions and defenses available to the assessee should be considered on their merits.

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Issues involved:
The issue involved in this case is the validity of an Assessment Order under Section 144B of the Income Tax Act, 1961, specifically regarding the requirement of issuing a show cause notice with a draft Assessment Order to the assessee.

Judgment Summary:

Issue 1: Validity of Assessment Order under Section 144B
The Supreme Court granted leave to appeal against the High Court's judgment that set aside the Assessment Order for not complying with the mandatory requirement under Section 144B of the Income Tax Act. The Court noted that the show cause notice with a draft Assessment Order was not issued and served upon the assessee, leading to the High Court's decision. The Revenue argued that the High Court should not have entertained the writ petition challenging the assessment order. However, the Court held that the High Court did not commit any error in setting aside the Assessment Order due to the non-compliance with Section 144B. The Court acknowledged the recent introduction of the Faceless Assessment Scheme and emphasized that the Revenue should have been given the opportunity to correct the error. Therefore, the Court modified the High Court's order and remanded the matter to the Assessment Officer to pass a fresh Assessment Order in accordance with the law, particularly under Section 144B of the Act.

Conclusion
The Supreme Court modified the High Court's judgment and remanded the matter to the Assessment Officer for a fresh Assessment Order, ensuring compliance with Section 144B of the Income Tax Act. All contentions and defenses available to the assessee on merits are to be considered by the Assessing Officer in accordance with the law and on its own merits. As a result, the appeal was disposed of by the Court.

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