INCOME TAX ACT, 1961

Section 144C Section 144B

Assessment - Draft assessment order - Validity - Assessee's request for personal hearing in response to show-cause notice not adhered to

Assessee challenged validity of draft assessment order dated 22-4-2021 under section 144B contending that show-cause notice had been issued to assessee on 5-3-2021 to which assessee respondend from time-to-time vide Letters, dated 26-3-2021, 28-3-2021 requesting for personal hearing and by sending responses dated 7-4-2021 and 8-4-2021, however, same was not adhered to. Held: Section 144B captioned 'Faceless Assessment' commences vide its sub-section (1) with a non-obstante clause and compulsively requires that assessment under sections 143(3) and 144 would be by prescribed procedure contained in sub-section (1) of section 144B in the cases referred to in sub-section (2) thereof. Sub-section (9) of section 144B declares that assessment made under section 143(3) or under section 144(4) referable to sub-section (2) other than sub-section (8) on or after 1-4-2021 would be non est, if such assessment is not made in accordance with the procedure laid down under section 144B. There is a telling/pronounced rigour, to follow the procedure under section 144B, lest the assessment would be non est. Going by the provisions under section 144B, when hearing had been envisioned and incorporated, it was imperative to observe principles of natural justice as stipulated. There is nothing to reflect upon that after receipt of response to show-cause notice, dated 6-3-2021, 8-3-2021, 7-4-2021 and 8-4-2021, prescribed procedure was followed. Assessee appeared to be losing out on an opportunity as would be available to it under clause (xxiii) read with clause (vii) of sub-section (7) of section 144B. In the circumstances. Impugned draft assessment Order was unsustainable.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2017-18

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