INCOME TAX ACT, 1961

Section 144

Assessment - Faceless assessment - Validity - Assessment not made in accordance with procedure laid down under section 144B(9)

Assessee-company received a notice, dated 22-4-2021 calling upon it to show cause as to why assessment should not be completed as per draft assessment order. Assessee was to submit its response by 23:59 hours of 24-4-2021 and the assessee was also advised that it might request for personal hearing. On 23-4-2021, the assessee filed its response mentioning therein, inter alia, that due to increase in COVID-19 cases, travelling was a problem and its staff was not able to attend as offices were generally closed. Further, assessee informed Revenue that it wished to object to modification and also a request to give personal hearing was made. Further, the assessee sought 20 days time to fulfill the requirements as per the notice. Thereafter, on 27-4-2021, the assessee filed its response giving quantitative details, which were sought for in the show cause notice. Almost six weeks later, the assessment order dated 8-6-2021 was passed. According to assessee, the assessment order had been passed without following the principles of natural justice in as much as the assessee's request for adjournment had not been considered, request for personal hearing had not been considered and most importantly the reply/objection filed in response to the show cause notice with the draft assessment order had not been considered. Held: Assessment order was an exact reproduction of draft assessment order, except one sentence that had been added as 'regarding the show cause notice issued to assessee on 22-4-2021, but the assessee had not given any justification for non-furnishing of quantitative details in Form 3CD.' That showed that Revenue passed the assessment order without application of mind, without considering the two replies, dated 23-4-2021 and 27-4-2021, filed by the assessee and without considering the request for personal hearing also sought by the assessee. Strangely in the affidavit-in-reply filed by one 'Y' on 29-7-2021, it was stated that 'the noting records show that the submissions, dated 23-4-2021 and 27-4-2021 both taken on record and considered'. But, the assessment order did not reflect the same. It was unable to understand that how does the affiant knew something, which the assessment order did not reflect. Another point raised in the affidavit in reply was that assessee did not furnish the quantitative details in Form 3CD and the assessee had not given any justification for non-furnishing of quantitative details in Form 3CD and on failure of the assessee to furnish the details in the prescribed Form 3CD, the assessment was completed as per the provisions under section 144. That was contrary to what was stated in the same affidavit that the noting records showed that the submissions, dated 23-4-2021 and 27-4-2021 had been taken on record and considered. Section 144B(9) provides that any assessment made shall be non-est if such assessment is not made in accordance with the procedure laid down under this section. Therefore, the assessment order being non-est, was accordingly, set aside.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2018-19

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