Court Treats Income Tax Assessment as Draft, Ensures Right to Be Heard Before Finalizing Order in Violation Case.

The HC of Calcutta, in an intra-Court appeal, addressed the appellants' challenge to an assessment order under the Income Tax Act, citing a violation of natural justice. Despite the assessment order being appealable, the Court recognized the necessity of a proper hearing before the original authority. Consequently, the Court treated the assessment order as a draft, granting the appellants an opportunity to submit objections to the Assessing Officer within a specified timeframe. The Assessing Officer was instructed to complete the assessment per the National Faceless Assessment Centre's procedures. The appeal was disposed of without costs, and parties were granted an urgent certified copy of the order.

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Issues: Challenge to assessment order under Income Tax Act based on violation of principles of natural justice.

The High Court of Calcutta heard an intra-Court appeal against an assessment order dated 23rd March, 2022 under sections 147 and 144B of the Income Tax Act, 1961. The appellants contended that they were unable to respond to the show cause notice due to ill health, seeking an opportunity to present their case before the Assessing Officer. The Single Bench held that there was no violation of natural justice, as the assessment order was appealable, dismissing the writ petition. The appellants then appealed this decision. The appellants requested an opportunity to present their case before the Assessing Officer for a fair assessment based on available material. The respondents argued that the writ petition was rightly dismissed, as ample opportunity was provided before the ex-parte assessment order was passed. However, no specific details were provided regarding the stage of the present appeal or the filing of an appeal before the CIT (A).

The Court noted that while the assessment order was appealable, the opportunity before the original authority could not be replaced by an opportunity before the appellate authority. Citing the Tin Box Company case, the Court emphasized that an assessment order made without proper hearing was invalid, and the possibility of presenting evidence before appellate authorities did not cure this defect. In light of the circumstances, the Court decided not to quash the assessment order but treated it as a draft order. The appellants were granted the opportunity to submit objections to the Assessing Officer within a specified period after receiving the order. The Assessing Officer was directed to complete the assessment following the procedures of the National Faceless Assessment Centre.

The Court clarified that even if an appeal had been filed before the CIT (A), it would not impact the fresh decision directed to be taken by the Assessing Officer. Consequently, the Court disposed of the appeal and related application without costs. The parties were to receive an urgent certified copy of the order upon completion of legal formalities.

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