Assessment order quashed for denying opportunity to file objections against draft order violating natural justice

The Bombay HC quashed a faceless assessment order and demand notice issued without providing a draft order to the assessee, finding violation of natural justice principles. The court held that the assessee must be given opportunity to file objections to the draft order. While correcting the departmental error, the HC granted liberty to the department to proceed afresh after following correct procedure and complying with natural justice principles. The matter was remanded to the Assessing Officer to take corrective measures and pass a fresh order in accordance with law.

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Issues involved:
The petition challenges the final assessment order and demand notice for not following the procedure u/s 144C (1) of the IT Act.

Summary:

Issue 1: Compliance with Section 144C of the IT Act
The petitioners challenge the final assessment order and demand notice issued without a draft assessment order as required u/s 144C (1) of the IT Act. The petitioner's counsel argued that similar cases have been quashed by various courts due to non-compliance with this provision. The respondent's counsel cited a Supreme Court decision where the matter was remanded to the Assessment Officer for a fresh order following due procedure.

Issue 2: Quashing of Assessment Order
The court acknowledged that the impugned order was made without providing a draft order to the petitioners, violating the requirement u/s 144C (1) of the IT Act. The court considered the arguments of both parties regarding the course of action to be taken after quashing the assessment order and notice.

Issue 3: Remand for Corrective Measures
The court referred to a Supreme Court decision where a similar situation led to the matter being remanded for a fresh assessment order following due procedure. The court decided to quash the impugned assessment order and notice, remanding the matter to the Assessing Officer/Department for corrective measures and a fresh order within a specified timeframe.

In conclusion, the court quashed the assessment order and notice, remanding the matter for corrective measures and a fresh order in accordance with the law. All contentions on merits were left open for consideration by the Assessing Officer/Department post-remand.

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