Court quashes assessment order for procedural non-compliance under Income-tax Act.

The Court quashed the impugned assessment order dated 17th December 2022, issued under Section 143(3) r/w 144B of the Income-tax Act, 1961, due to procedural non-compliance. The Petitioner's right to request an adjournment was not addressed by the Department, leading to the closure of the portal, contrary to Section 144B(1)(xiii). The Writ Petition was allowed, directing the Department to reopen the portal for the Petitioner to submit necessary documents and explanations by specified deadlines, ensuring compliance with procedural requirements.

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Issues Involved:
1. Validity of the impugned assessment order dated 17th December 2022.
2. Compliance with procedural requirements under Section 144B of the Income-tax Act, 1961.
3. Petitioner's right to request an adjournment and the Department's response to such requests.

Summary:

1. Validity of the Impugned Assessment Order:
The Petitioner challenged the assessment order dated 17th December 2022, issued under Section 143(3) rws 144B of the Income-tax Act, 1961, along with the notice of demand and penalty notices issued on the same date. The Court examined the legality of these documents and quashed the impugned assessment order, setting it aside.

2. Compliance with Procedural Requirements:
The Court reviewed the procedural compliance under Section 144B of the Income-tax Act, 1961. It was observed that the Petitioner had filed its Income Tax Returns for the Assessment Year 2021-22 on 28.02.2022. The Department issued a show cause notice under Section 144-B r/w Section 143(2) on 02.12.2022. The Petitioner sought an adjournment until 16.12.2022, but the Department closed the portal on 09.12.2022 without responding to the adjournment request. The Court highlighted that Clause (xiii) of Section 144B(1) mandates the Assessee to file a reply within the specified or extended time, which was not adhered to by the Department.

3. Petitioner's Right to Request an Adjournment:
The Petitioner requested an adjournment via email on 08.12.2022, which was not addressed by the Department. The Court noted that the Department neither accepted nor rejected the adjournment request, leading to the closure of the portal on 09.12.2022. This action was found to be non-compliant with Section 144B(1)(xiii), which allows for an extension of time based on the Assessee's request.

Conclusion:
The Writ Petition was allowed, and the impugned Assessment Order dated 17.12.2022 was quashed and set aside. The Court issued the following directions:
- The Department shall reopen the portal to allow the Petitioner to submit its explanation and documents.
- If the portal is opened by 30.06.2023, the Department must notify the Petitioner via email.
- The Petitioner must upload its reply and attachments by 10.07.2023.
- If the Petitioner requests a personal hearing, it should be granted with at least five days' notice for preparation.
- The Department's Standard Operating Procedure (SOP) dated 03.08.2022 issued by the NFAC, Delhi, must be followed.

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