Case Law Details
Sujatha Revikumar Vs JCIT (Kerala High Court)
Introduction: In a significant ruling, the Kerala High Court addressed the procedural lapses in tax assessments under the Income Tax Act, 1961, particularly concerning Section 144B, which mandates the preparation and sharing of a draft assessment order with the assessee. The case, Sujatha Revikumar Vs JCIT, highlights the criticality of adhering to the prescribed procedures to uphold the principles of natural justice in tax assessments. This article delves into the court’s findings and its implications for the assessment process under the National Faceless Assessment scheme.
Detailed Analysis: The petitioner, Sujatha Revikumar, engaged in the business of money lending, faced an assessment for the year 2021-22 under the National Faceless Assessment scheme. The assessment concluded with an order (Ext.P14) without adhering to the procedural requirement of Section 144B of the Income Tax Act, which necessitates the preparation of a draft assessment order for review by the assessee. This procedural lapse was contested on the grounds of violating the principles of natural justice, as it deprived the assessee of the opportunity to respond to the draft assessment, including the right to request a personal hearing in case of any adverse variations.
The Kerala High Court, referencing its precedents and the Supreme Court’s rulings, underscored the importance of following the statutory procedure laid down in Section 144B. It was observed that the assessment order issued to the petitioner was devoid of the preliminary step of preparing and sharing a draft assessment order, thus failing to comply with the statutory mandate. The court, emphasizing the procedural safeguards intended to protect the assessee’s rights, set aside the assessment order and directed the issuance of a fresh order in compliance with Section 144B.
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