2023 (9) TMI 33 - HC - Income Tax

Assessment order quashed under lack of representation opportunity for assessment year 2015-16

Shree Ganesh Intermediary Private Limited Versus National Faceless Assessment Centre, Delhi

The court quashed the assessment order passed under Section 144B read with Section 263 for the assessment year 2015-16 due to the lack of adequate ... Revision u/s 263 - Validity of faceless assessment u/s 263 r.w.s. 143 (3) and 144B- period of limitation - shorter period to respond - No action was taken after order u/s 263 passes for over a period of 17 months - At the far end of the schedule when the time limit to complete the assessment was to come to an end, the department on 08.09.2021 and 21.09.2021 issued first and second notices respectively - as argued without working out a schedule so as to give a reasonable opportunity to the petitioner, particularly when the assessment is faceless, the respondents giving only a day for the petitioner to respond so as to save the limitation period, obviously created a situation where the petitioner lost an adequate opportunity to submit a response - HELD THAT:- The facts of the case in the present are similar to the one in the case of Dineshkumar Chhaganbhai Nandani [2023 (6) TMI 935 - GUJARAT HIGH COURT] inasmuch as the notice of 28.09.2021 called upon the petitioner to file a response by 29.09.2021 at 11.59 pm. On the very next date, since the assessment was getting time-barred, an order of assessment was passed only for the compliance of the provisions and depriving the petitioner of a reasonable opportunity of being heard. The Division Bench in the case of Dineshkumar Chhaganbhai Nandani (supra) has considered several decisions of this court on the issue of reasonable opportunity of being heard in context of Section 144B of the Act. The assessment order passed u/s 144B read with Section 263 of the Act for the assessment year 2015-16 is quashed and set aside. The matter is remitted to the Assessing Officer so as to enable the petitioner to be heard in light of the detailed submissions made by the petitioner Issues Involved:1. Adequate Opportunity for Representation2. Compliance with Section 144B of the Income Tax Act3. Principles of Natural JusticeSummary:Issue 1: Adequate Opportunity for RepresentationThe petitioner challenged the assessment order passed under Section 144 read with Section 263 and Section 144B of the Income Tax Act for the assessment year 2015-16, arguing that the respondents did not provide a reasonable opportunity to respond. Notices were issued on 08.09.2021 and 21.09.2021 to an old authorized representative, and a show-cause notice was issued on 28.09.2021, requiring compliance by 29.09.2021. Despite filing a response on 28.09.2021, the assessment was completed ex-parte on 30.09.2021 without considering the objections.Issue 2: Compliance with Section 144B of the Income Tax ActMr. Hardik Vora, representing the petitioner, argued that the assessment order violated Section 144B, which mandates that assessments should be completed only after considering the response furnished by the assessee. The petitioner cited several judicial decisions supporting the need for adequate opportunity and compliance with Section 144B.Issue 3: Principles of Natural JusticeThe court observed that the respondents failed to provide a reasonable opportunity for the petitioner to respond, especially given the faceless nature of the assessment. The court noted that the schedule worked out by the respondents deprived the petitioner of a fair chance to present their case, thus violating the principles of natural justice.Conclusion:The court quashed the assessment order passed under Section 144B read with Section 263 for the assessment year 2015-16 and remitted the matter to the Assessing Officer. The court directed that the petitioner should be given an opportunity to be heard in light of the detailed submissions made on 28.09.2021. The petition was accordingly allowed.