RMSI Private Limited vs. National E-Assessment Centre - (High Court of Delhi) (14 Jul 2021)

Writ petition is maintainable if Assessment Order passed without complying with the procedure laid down in the Scheme and in violation of principles of natural justice

MANU/DE/1294/2021

Direct Taxation

Present petition has been filed by the Petitioner challenging the Assessment Order passed under Section 143(3) read with Sections 143(3A) and 143(3B) of the Income Tax Act, 1961 (IT Act) against the Petitioner under the E- Assessment Scheme, 2019 for the Assessment Year 2017-18. The learned counsel for the Petitioner submits that, the Impugned Assessment Order is liable to be set aside as it is not preceded by the issuance of a 'Draft Assessment Order' followed by a 'Revised Draft Assessment Order'.

A reading of the Section 144B (9) of the Act, would clearly show that, it is mandatory for the National E-Assessment Centre to provide an opportunity to the assessee, by serving a notice calling upon him to show cause as to why the variation proposed in the Draft Assessment Order, which is prejudicial to the interest of the assessee, be not made.

Absence of such notice would clearly be a violation of the principles of natural justice leading to the Assessment Order passed being declared void. Absence of a provision akin to Section 144B (9) in the E- Assessment Scheme, 2019 would not make any difference to such legal outcome as violation of principles of natural justice renders such decision void. Even otherwise, the Income Tax authorities have to remain bound by the Statutory Scheme of assessment.

As far as the objection on the maintainability of the present petition on account of the Petitioner having already availed of the remedy of the appeal, the same is also liable to be rejected. In the present case as well, the impugned Assessment Order having been passed without complying with the procedure laid down in the Scheme and in violation of principles of natural justice, the writ petition would be maintainable.

Consequently, the Impugned Assessment Order passed under Section 143(3) read with Sections 143(3A) and 143(3B) of the Act is set aside. However, the respondent/Revenue is given liberty to pass a fresh Assessment Order in accordance with law. The petitioner shall also have liberty to challenge any action of the respondent/Revenue in accordance with law, in the event that it is aggrieved by the same. Writ Petition disposed of.

Tags : ASSESSMENT PROCEDURE COMPLIANCE