Ex parte assessment order under section 144B set aside for violating natural justice principles

The HC set aside an ex parte assessment order passed under section 144B for violating principles of natural justice. The revenue authorities admitted no proceedings occurred on the scheduled date of 22.03.2024, yet passed an assessment order on 28.03.2024 without granting proper hearing opportunity to the assessee. The court found the two-day notice period inadequate and criticized the wholly ex parte proceedings conducted without the assessee's participation. The assessment order was treated as a final show-cause notice, with the assessee directed to file reply within one week.

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Issues Involved:

1. Ex parte assessment order u/s 143(3) read with Section 144-B of the Income Tax Act, 1961.
2. Adequacy of notice and opportunity of hearing.
3. Violation of principles of natural justice.

Summary:

1. Ex parte assessment order u/s 143(3) read with Section 144-B of the Income Tax Act, 1961:
The petitioner contested the ex parte assessment order dated 28.03.2024 for A.Y. 2022-23. The court noted that the proceedings initiated in October 2023 did not fix any date initially. The first notice was uploaded on the revenue authorities' web portal on 19.03.2024, fixing the hearing date as 22.03.2024. However, the petitioner was not informed via registered e-mail or SMS, receiving the intimation only on 28.03.2024. Despite the petitioner seeking an extension on 28.03.2024, the assessment order was passed the same day without considering the application.

2. Adequacy of notice and opportunity of hearing:
The court examined the order sheet and found that the case was assigned to the National Faceless Assessment Centre (NFAC) on 16.05.2023, and various notices were issued subsequently. However, after the adjournment on 08.09.2023, no further hearing date was fixed until the show-cause notice on 19.03.2024, which granted only two days for the petitioner to respond. The court highlighted that no proceedings occurred on the fixed date, 22.03.2024, and the assessment order was passed ex parte without any further opportunity for the petitioner to respond.

3. Violation of principles of natural justice:
The court referred to a previous judgment in Satish Kumar Bansal Huf Vs. National Faceless Assessment Centre Nafac And Another, emphasizing the mandatory nature of providing an opportunity for a personal hearing u/s 144B(6)(vii) and (viii). The court found gross violations of natural justice principles, as the petitioner was not given a real opportunity to be heard. The court concluded that the assessment order dated 28.03.2024 was passed five days after the last fixed date without any proceedings involving the petitioner.

Conclusion:
The court set aside the assessment order dated 28.03.2024, allowing the petitioner to treat it as a final show-cause notice and submit a reply within one week. If the Assessing Officer rejects the explanation, a hearing date with at least 15 days' notice must be fixed. The petition was allowed with no order as to costs, and corrective measures were directed to be taken by the respondent authorities.

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