The Bombay High Court quashed the Faceless Assessment Order passed without the issuance of the draft assessment order and no personal hearing was granted.
The Petitioner, Shreeji Investment & Advisory Services was issued notices under Section 142(1) of the Act, and show cause notice was also issued through e-portal. Replies were submitted by the petitioner who also sought a personal hearing. On the issue of personal hearing, admittedly no hearing has been granted because, in the impugned order, respondent state “during the assessment proceedings assessee sought VC/personal hearing on 24th February 2021 which was fixed on 22nd April 2021, but due to technical problems VC could not be held.” Therefore, on this ground alone the impugned order requires to be set aside.
The Petitioner is impugning the assessment order dated 24th May 2021 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961 (the said Act), for the A.Y.-2018-2019 on the grounds that; no draft assessment order was issued as required under sub-clause (xvi) of sub Section (1) of Section 144B; addition under Section 68 of the Act has been made without even giving an opportunity by issuing a show-cause notice and; no personal hearing was granted despite petitioner requesting for the same.
The division bench of Justice Amit B. Borkar and Justice K.R. Shriram noted that one of the grounds there is a specific allegation that there is not even a whisper of these additions either in the alleged draft assessment order or in any of the notices issued in the course of assessment proceedings and no opportunity whatsoever was given to the petitioner to file its objections against these additions. In the affidavit in reply of the respondent, there is no denial of this fact. In the affidavit in reply, the affiant has gone on the merits of the two additions but does not deny the fact that neither the alleged draft assessment order nor any of the notices have not even referred to these proposed additions under Section 68 of the Act. Issuance of show cause notice is the preliminary step that is required to be undertaken.
The court having heard Mr. Syal and Mr. Pinto and having considered the petition and the affidavit in reply, the court allowed the petition.
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