2021 (5) TMI 1083 - HC - Income Tax

Stay Granted on Assessment Order Due to Lack of Show-Cause Notice; Emphasizing Natural Justice Principles.

The HC granted a stay on the operation of the assessment order dated 31.03.2021 under the Faceless Assessment Scheme, 2019, due to the lack of a ... Seeking stay on the operation of assessment order under Faceless Assessment Scheme, 2019 - as submitted no show-cause notice was issued to the petitioner-assessee - HELD THAT:- Board desires that in all cases under scrutiny, where the Assessing Officer proposes to make additions or disallowances, the assessee would be given a fair opportunity to explain his position on the proposed additions/disallowances in accordance with the principle of natural justice. In this regard, the AO shall issue an appropriate show-cause notice duly indicating the reasons for the proposed additions/disallowances along with necessary evidences/reasons forming the basis of the same. Before passing the final order against the proposed additions/disallowances, due consideration shall be given to the submissions made by the assessee in response to the show-cause notice. Accordingly, issue notice. Revenue, accepts service on behalf of the respondent. We are told that, due to personal difficulty, Mr. Sharma is not available today. Counter-affidavit will be filed within four weeks. Rejoinder thereto, if any, will be filed before the next date of hearing. List the matter on 10.08.2021. In the meanwhile, there shall be a stay on the operation of the impugned assessment order dated 31.03.2021 Issues:1. Stay on the operation of the impugned assessment order dated 31.03.2021 under Faceless Assessment Scheme, 2019.2. Lack of issuance of a show-cause notice to the petitioner-assessee before passing the assessment order.Analysis:1. The petitioner sought a stay on the operation of the assessment order dated 31.03.2021 under the Faceless Assessment Scheme, 2019. Mr. Kapil Goel, representing the petitioner, argued that the issue in this case is similar to a previous case, KL Trading Corporation vs. National E-Assessment Centre, Delhi & Anr. He highlighted that the assessment was conducted under the Faceless Assessment Scheme, which required the revenue to issue a show-cause notice before passing the assessment order. The petitioner claimed that no such notice was issued, as evidenced by the assessment proceedings on the e-portal and Central Board of Direct Taxes instruction no. 20/2015.2. The petitioner's counsel, Mr. Goel, emphasized the importance of natural justice and fair opportunity for the assessee to explain their position on proposed additions or disallowances. He pointed out that the Assessing Officer should issue a show-cause notice indicating reasons for proposed additions/disallowances before passing the final order. Mr. Ruchir Bhatia, representing the revenue, accepted service on behalf of the respondent. Due to Mr. Sharma's unavailability, the counter-affidavit was to be filed within four weeks, with a rejoinder before the next hearing on 10.08.2021. A stay was ordered on the operation of the assessment order dated 31.03.2021 until further proceedings.