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The High Court held that the faceless assessment order was invalid as it violated the principles of natural justice and the provisions of Section 144B of the Income Tax Act. The petitioner was not issued a show cause notice-cum-draft assessment order, which is a mandatory requirement u/s 144B retrospectively effective from April 1, 2021. The court emphasized that the principles of natural justice are statutorily recognized, and any non-adherence to the mandatory statutory provisions and these principles would render the assessment order patently illegal. An order entailing civil consequences and causing prejudice must be passed in strict adherence to natural justice principles, i.e., after issuing a show cause notice and granting an opportunity for a hearing. An order passed in breach of natural justice is vitiated, non-est, and a nullity. Consequently, the impugned assessment order, being passed without issuing a show cause notice and granting a hearing opportunity, was manifestly illegal and a nullity. The court quashed the order, allowing the petition, so that appropriate procedure under the Income Tax Act can be followed, and a valid assessment order passed.
The High Court held that the faceless assessment order was invalid as it violated the principles of natural justice and the provisions of Section 144B of the Income Tax Act. The petitioner was not issued a show cause notice-cum-draft assessment order, which is a mandatory requirement u/s 144B retrospectively effective from April 1, 2021. The court emphasized that the principles of natural justice are statutorily recognized, and any non-adherence to the mandatory statutory provisions and these principles would render the assessment order patently illegal. An order entailing civil consequences and causing prejudice must be passed in strict adherence to natural justice principles, i.e., after issuing a show cause notice and granting an opportunity for a hearing. An order passed in breach of natural justice is vitiated, non-est, and a nullity. Consequently, the impugned assessment order, being passed without issuing a show cause notice and granting a hearing opportunity, was manifestly illegal and a nullity. The court quashed the order, allowing the petition, so that appropriate procedure under the Income Tax Act can be followed, and a valid assessment order passed.
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