The division judge bench of Justice T. S. Sivagnanam and Justice Hiranmay Bhattacharyya of the Calcutta High Court in the case of Indu Goenka Vs Assessment Unit, Income tax Department & Ors quashed the assessment order as the assessing officer has reduced the procedure to an empty formality, which has to be deprecated.
It was noted that a verbatim extract of the show cause notice can be seen on the first 21 pages of the assessment order. Pages 22 and 23 contain two paragraphs summarising the assessee's response. The assessment order contains an excerpt of the show cause from pages 23 to 36, and on pages 37 and 38, the assessment is finished after the total income has been calculated.
Brief facts:
The present intra-court appeal is the result of the writ petition in which the assessment order was challenged by the appellant under Section 143(3) read with Section 144B of the Income Tax Act, 1961 as it completely violates the principles of natural justice and that all the formalities that must be followed as listed in the Standard Operating Procedure (SOP) for faceless assessment orders have been disregarded. However, the single judge bench dismissed the writ petition on the ground that the reasoning given by the assessing officer can’t be examined in a writ proceeding.
Observations of the court:
The Hon’ble Court observed that the National Faceless Assessment Center in Delhi has prepared the Standard Operating Procedure (SOP) for Faceless Assessment outlined in Section 144B of the Act and distributed it to all Principal Chief Commissioners of Income Tax. The procedure outlines the steps that must be taken to make the assessment, and in paragraph N.1.3 it is stated that the authority must ensure adherence to the principles of natural justice and reasonable opportunity for the assessee. It also includes deadlines for receiving responses to the show cause notice, which have also been set forth. In addition, the SOP includes the format for the final assessment order in AU-9, which lists the many headings under which the assessment order must be approved after proper deliberation.
It was noted that a verbatim extract of the show cause notice can be seen on the first 21 pages of the assessment order. Pages 22 and 23 contain two paragraphs summarising the assessee's response. The assessment order contains an excerpt of the show cause from pages 23 to 36, and on pages 37 and 38, the assessment is finished after the total income has been calculated. Furthermore, this assessment order is considered a classic example of how an assessment order should not be made. The assessing officer has reduced the procedure to an empty formality, which has to be deprecated.
Based on these considerations, the Hon’ble High Court quashed the assessment order.
The decision of the court:
With the above direction, the Hon’ble Court allowed the writ petition and the appeal.
Case Title: Indu Goenka Vs Assessment Unit, Income Tax Department & Ors
Coram: Hon’ble Mr. Justice T. S. Sivagnanam and Hon’ble Mr. Justice Hiranmay Bhattacharyya
Citation: MAT 306 of 2023 and IA No. CAN 1 OF 2023
Advocates for the Appellant: Mr. Abhratosh Mazumdar, Sr. Adv., Mr. Avra Mazumdar, Mr. Ramesh Patodiya, and Ms. Megha Agarwal.
Advocate for the Respondent: Mr. Smarajit Roychowdhury
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