Delhi High Court Asks National Faceless Assessment Centre If It Will Withdraw Final Orders Passed Sans Show Cause Notice, Draft Assessment

The Delhi High Court has asked the National Faceless Assessment Centre if it will withdraw a final assessment order, passed in violation of principles of natural justice, i.e., without issuing any show cause notice or the draft assessment order, or without considering the reply or assessee's request for a personal hearing.

A bench compromising of Justice Manmohan and Justice Navin Chawla directed the Principal Chief Commissioner to examine this aspect and file an affidavit after discussing the aforesaid suggestions with CBDT and with her officers.

It ordered thus:

"In view of Section 144B (9) of the Act that any assessment order not made in accordance with the procedure laid down in Section 144B of the Act would be non est, this Court directs the Principal Chief Commissioner to examine as to whether the National Faceless Assessment Centre would withdraw a final assessment order, passed in violation of principles of natural justice and/or without issuing Show Cause Notice and draft assessment order as well as without considering the reply and/or assessee's request for a personal hearing."

The development came in a petition challenging the final assessment order dated 8th September, 2021 issued under sec. 143 (3) read with sec. 144B of the Income Tax Act, 1961 (the Act) for the Assessment Year 2018-19.

Advocate Piyush Kaushik representing the petitioner apprised the Court that the impugned assessment order was passed without issuing a Show Cause Notice and a draft assessment order which is mandated under sec. 144B(1)(xvi)(b) of the Act.

While issuing notice on the plea, the Court observed that despite various judgments passed by the Court setting aside similar assessment orders, the respondents were still passing similar orders.

"It seems that despite the judgments passed by this Court, the respondents in many of the cases have made similar mistakes time and again," it added.

Accordingly, the Court had directed the Principal Commissioner, National Faceless Assessment Centre, to appear before it via virtual hearing link.

On joining the hearing, the Principal Commissioner assured the Court that a system of alerts and checks would be introduced by the National Faceless Assessment Centre for ensuring that no final Assessment order is passed without prior issuance of a Show Cause Notice as well as draft assessment order and without considering reply by the Assessee and a request, if any, of the Assessee for an opportunity of hearing.

She also added that an affidavit would be filed after discussing the said suggestions with the authorities concerned, within a period of three weeks.

Accordingly, the Court listed the matter for further hearing on December 24.

Appearance: Advocate Piyush Kaushik appeared on behalf of the Petitioner whereas Senior Advocate Puneet Rai; Adeeba Mujahid, Standing Counsel of Income Tax department and Reena Sinha Puri, Principal Chief Commissioner Income Tax National Faceless Assessment Centre appeared on behalf of the Income tax department.

Case Title: RMSI PRIVATE LIMITED v. NATIONAL FACELESS ASSESSMENT CENTRE, DELHI

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