Court Sets Aside Assessment Orders for Violating Natural Justice, Remands for Fair Hearing and Compliance with Legal Standards.

The court allowed the four writ petitions, setting aside the draft assessment orders, final Assessment Orders, demand notices, and Penalty Orders due to violations of natural justice principles. The Assessing Officer failed to consider the petitioner's responses and provided insufficient time to respond to notices, leading to errors in the assessment process. The matters were remanded back to the Assessing Officer with instructions to conduct a fair hearing and issue fresh notices under Section 142(1) of the Act, ensuring compliance with procedural fairness and legal standards.

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Issues involved:
The judgment involves issues related to violation of principles of natural justice in assessment proceedings, non-receipt of notices by the assessee, failure to acknowledge responses from the assessee, granting insufficient time to respond to notices, and errors in draft assessment orders and final Assessment Orders.

Violation of Principles of Natural Justice:
The writ petitions challenged Assessment Orders and Penalty Orders on the ground of violation of principles of natural justice. The court noted that both sides agreed to dispose of the petitions on this limited ground. The Assessing Officer had overlooked crucial replies and vital facts provided by the petitioner, leading to a clear non-application of mind in the assessment process.

Non-Receipt of Notices by the Assessee:
The petitioner claimed that except for one notice, none of the other notices were received. The Assessing Officer issued several notices between specific dates, but the petitioner asserted that it did not receive them. The petitioner responded to a notice dated 12.07.2022 requesting an extension to provide detailed information, citing non-receipt of earlier notices.

Insufficient Time Granted to Respond:
The notice dated 12.07.2022 under Section 142(1) of the Act allowed only three days for the petitioner to respond. This short response time was deemed inadequate and a violation of the Standard Operating Procedure, which mandates a response time of 15 days for such notices. The court held that this denial of sufficient time to respond infringed the rights of the assessee.

Errors in Draft Assessment Orders and Final Assessment Orders:
The Assessing Officer failed to consider the petitioner's responses and vital facts disclosed in emails, leading to errors in the draft assessment orders and final Assessment Orders. Despite the petitioner's efforts to provide information and seek an extension, the Assessing Officer recorded inaccurately that no reply was received. These errors rendered the assessment orders and demand notices unsustainable.

Conclusion:
The court allowed all four writ petitions, setting aside the draft assessment orders, final Assessment Orders, demand notices, and Penalty Orders. The matters were remanded back to the Assessing Officer with directions to provide a fair hearing to the petitioner in compliance with the law after issuing fresh notices under Section 142(1) of the Act. The judgment highlighted the importance of upholding principles of natural justice and ensuring procedural fairness in assessment proceedings.

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