AO Has Reduced The Procedure To An Empty Formality, To Be Deprecated: Calcutta High Court
The Calcutta High Court had quashed the Assessment Order and held that the assessing officer has reduced the procedure to an empty formality, which has to be deprecated.The division bench of Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya has observed that the first 21 pages of the assessment order are a verbatim extract of the show cause notice. On pages nos.22 and 23 in...
The Calcutta High Court had quashed the Assessment Order and held that the assessing officer has reduced the procedure to an empty formality, which has to be deprecated.
The division bench of Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya has observed that the first 21 pages of the assessment order are a verbatim extract of the show cause notice. On pages nos.22 and 23 in two paragraphs the reply given by the assessee has been summarised. From pages nos.23 to 36 of the assessment order it is once again an extract of the show cause and ultimately on pages nos.37 and 38 the total income has been determined and the assessment is completed.
The petitioner/assessee has challenged the assessment order on the ground that it is in total violation of the principles of natural justice. The assessment order has ignored all the formalities to be observed as enumerated under the Standard Operating Procedure (SOP) for faceless assessment orders.
The Single Bench dismissed the writ petition on the ground that the reasoning given by the assessing officer cannot be examined in a writ proceeding as the Court cannot act as an appellate authority.
The Standard Operating Procedure (SOP) under the Faceless Assessment framed under Section 144B of the Act had been issued by the National Faceless Assessment Centre, Delhi, and communicated to all the Principal Chief Commissioners, Income Tax under the cover of a letter dated 3rd August 2022. The procedure enumerates how the assessment has to be made and in paragraph N.1.3 it has been stated that the authority should ensure adherence to the principles of natural justice and reasonable opportunity to the assessee, timelines to be given for obtaining a response to the show cause notice which have also been stipulated. The SOP also gives the format of the final assessment order in AU-9 which sets out the various heads under which the assessment order has to be passed with due discussion.
The court noted that on a cursory perusal of the assessment order dated 20th December 2022, which is impugned in the writ petition, one gets an impression that it is in compliance with the SOP as it contains requisite sub-headings but however, on a closure reading of the assessment order, it is found that the assessing officer has acted in a most perverse manner in passing the assessment order.
“The impugned assessment order is a classical example of how an assessment should not be made. The assessing officer has reduced the procedure to an empty formality, which has to be deprecated. This leaves us with no other option except to quash the assessment order,” the court said.
Case Title: Indu Goenka Vs. Assessment Unit, Income Tax Department & Ors.
Case No: MAT 306 of 2023 + IA NO.CAN 1 OF 2023
Citation: 2023 LiveLaw (Cal) 81
Date: 16.03.2023
Counsel For Petitioner: Abhratosh Mazumdar, Avra Mazumdar, Ramesh Patodiya, Megha Agarwal.
Counsel For Respondent: Smarajit Roychowdhury