Case Law Details
Shreeji Investment & Advisory Services Vs National Faceless Assessment Centre (Bombay High Court)
As regards draft assessment order, the impugned order does not state that any draft assessment order was given but in the affidavit in reply filed by one Sreekala S. Nair affirmed on 21st September 2021, it is stated that the show cause notice dated 18th February 2021 had a heading “show cause notice as to why assessment should not be completed as per draft assessment order and “the notice further states that if no reply is received, the assessment will be completed as per the draft assessment order”. In our view, this is one of the most preposterous stand take in as much as in the notice dated 18th February 2021 cannot, by any stretch of imagination, be called the draft assessment order. In paragraph 3 of the notice it is stated “please explain the tax impact if it should be 8,41,03,800/- instead of 6,54,05,508/-”. Then it is stated in paragraph 4 “in this regard please produce the ITR/P&L / and balance sheet of the partners”. In paragraph 5 it is stated “please explain the method of accounting adopted by you” and in paragraph 6 it is stated “please produce copy DEMAT account with a chart showing the entry date of purchase of share on which short term capital losses occurred and chart showing sale date of these shares supported with the bank details”. In our view, this is nothing but a notice seeking further details, information, documents and cannot be called the draft assessment order. Therefore, on this ground also the assessment order has to be set aside.
Issuance of show cause notice is the preliminary step which is required to be undertaken. The purpose of show cause notice is to enable a party to effectively deal with the case made out by respondent (Om Shri Jigar Association Vs. Union of India)1 Therefore, on this ground also the impugned order is required to be set aside.
FULL TEXT OF THE JUDGMENT/ORDER of BOMBAY HIGH COURT
1 Petitioner is impugning the assessment order dated 24th May 2021 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961 (the said Act), for the A.Y.-2018-2019 on the grounds that; a) no draft assessment order was issued as required under sub clause (xvi) of sub Section (1) of Section 144B; b) addition under Section 68 of the Act has been made without even giving an opportunity by issuing a show cause notice and ; (c) no personal hearing was granted despite petitioner requesting for the same.
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