Assessment order set aside for violating seven-day statutory period and failing to consider petitioner's response under sections 147 and 144B

The Calcutta HC set aside an assessment order passed by the Faceless Assessment Unit under sections 147 and 144B for AY 2018-19. The court found that the assessment order was passed beyond the seven-day statutory period after issuance of show-cause notice, violating natural justice principles. Although the petitioner filed their response through the Help Desk Grievance Cell after the portal's Submit Response Button was deactivated, the Faceless Assessment Unit failed to consider it. The matter was remanded back to the Faceless Assessment Unit with directions to consider the petitioner's response and dispose of the proceedings properly.

---

---

Issues:
Challenging assessment order under Income Tax Act for Assessment Year 2018-19; Adequate opportunity to respond to show-cause notice; Violation of principles of natural justice and statutory provisions; Compliance with Standard Operating Procedure (SOP) for Faceless Assessment Unit; Response submission issues and access by Faceless Assessment Unit.

Analysis:
The writ petition challenged an assessment order under the Income Tax Act for the Assessment Year 2018-19, specifically focusing on the petitioner's contention regarding the lack of adequate opportunity to respond to a show-cause notice issued by the Faceless Assessment Unit. The petitioner argued that despite being served a show-cause notice, the time provided to respond was insufficient, not complying with the SOP guidelines requiring a minimum of 7 days response time. This breach of SOP was highlighted as a violation of both natural justice principles and statutory provisions.

The petitioner, represented by Mr. Mazumder, emphasized that the response was eventually filed, albeit belatedly, due to technical issues with the submission portal. The Faceless Assessment Unit proceeded with the assessment order without considering the petitioner's response, leading to allegations of further violations of principles of natural justice and SOP guidelines. The petitioner sought to set aside the assessment order and remand the matter back to the Faceless Assessment Unit for proper consideration of the response.

In response, Mr. Dutt, representing the respondents, argued that the petitioner had sufficient opportunity to respond and failed to do so within the specified time frame. He contended that the response filed by the petitioner with the Grievance Help Desk was not accessible to the Faceless Assessment Unit, absolving them of any fault in not considering the response.

The judgment highlighted the elaborate procedures laid down for proceedings by the Faceless Assessment Unit, emphasizing the importance of adherence to SOP guidelines issued by the Central Board of Direct Taxes. The court noted that the show-cause notice did not provide the minimum required response time of seven days, which was a clear violation of the SOP and principles of natural justice. The judgment referenced a previous case to support the requirement for reasonable response time and adherence to SOP guidelines.

Ultimately, the court set aside the assessment order, remanding the matter back to the Faceless Assessment Unit with directions to consider the petitioner's response on record and dispose of the proceeding in accordance with the law within a specified timeframe. The decision was based on the grounds of violation of natural justice principles and failure to comply with SOP guidelines, ensuring a fair opportunity for the petitioner to present their case.

---