KBB Nuts Private Limited Vs National Faceless Assessment Centre Delhi (Delhi High Court)
Introduction:
♦ In the case of the KBB Nuts Private Limited V/s National Faceless Assessment Centre Delhi (NFAC) assessment proceedings and directed the revenue to grant a personal hearing to the authorised representative of the petitioner, before proceeding to pass a fresh assessment order.
Fact of the Case:
♦ Return of income for the concerned AY, i.e., 2017-2018 was filed on 30.11.2017, and that thereupon, a notice under Section 143(2) of the Act was issued on 26.09.2018 followed by a notice issued under Section 142(1) of the Act, on 16.10.2019.
♦ Reply to the said notice was filed, via the designated e-portal, on 07.12.2019.The case was referred to the Transfer Pricing Officer under Section 92 CA (1) of the Act.
♦ Notices were once again issued under Section 142(1) of the Act, between 15.02.2021 and 07.04.2021. In response to the said notices, requisite information and documents sought for were submitted, as on the earlier occasion, via the e-portal.
♦ A show-cause notice, along with the draft assessment order dated 19.04.2021, was served on the assesse, whereby, the assesse was called upon to file its response by 23:59 hours on 21.04.2021.
♦ The assesse filed an application via the e-portal, seeking a day’s adjournment, i.e., till 22.04.2021 but no response was received by it with respect to the request for adjournment. The objections to the aforementioned show-cause notice were filed on 22.04.2021 at 15.22 hours.
♦ The assessment order was passed on 22.04.2021 resulting in an enhance imposition of demand of approximately Rs.15.62 crores towards tax and also led to initiation of penalty proceedings.
♦ The assesse claims that no response was received by it with respect to the request for adjournment. There has been a breach of the principles of natural justice as the objections filed on 22.04.2021 were not taken into account by the NFAC before passing the assessment order.
Judgement of the High Court:
♦ Without getting into the tenability of the objections on merits, in our view, the best course forward would be to set aside the impugned assessment order.
♦ NFAC will pass a fresh assessment order after taking into account the objections filed to the show cause notice.
♦ Grant a personal hearing to the authorised representative of the assesse, before proceeding to pass a fresh assessment order.
Comment:
♦ It has been observed in many cases the final assessment order is passed without issue of Show cause notice. In cases where Show cause notice has been issued but final order has been issued without considering the objection filled by the assesse or the personal hearing request has been denied.
♦ The are other courts judgment as well where the assesse were granted relief from the such impugned assessment order on the ground of breach of the principles of natural justice:
