Case Law Details
National Faceless Assessment Centre & Ors. Vs Automotive Manufacturers Private Limited (Supreme Court of India)
Introduction: This article delves into the recent Supreme Court judgment in the case of National Faceless Assessment Centre & Ors. vs Automotive Manufacturers Private Limited. The court’s decision revolves around the breach of natural justice, the mandatory requirements under Section 144B of the Income Tax Act, and the implications of the Faceless Assessment Scheme.
Detailed Analysis: The Supreme Court granted leave to consider the challenge to the High Court’s order setting aside the Assessment Order. The core issue was the failure to issue a show cause notice with a draft Assessment Order, a mandatory requirement under Section 144B. The Revenue argued against the High Court’s interference and suggested a remand for a fresh order.
The court, after hearing arguments from both sides, acknowledged the breach of natural justice due to the absence of a show cause notice. However, recognizing the recent introduction of the Faceless Assessment Scheme, the court modified the High Court’s order. It emphasized the need to grant the Revenue an opportunity to correct the procedural lapse and suggested remanding the matter to the Assessment Officer for a fresh Assessment Order.
Conclusion: In conclusion, the Supreme Court, while upholding the breach of natural justice, modified the High Court’s order. The decision highlights the importance of adherence to due procedure under Section 144B and the Faceless Assessment Scheme. The court’s ruling provides the Revenue with a chance to rectify the lapse and calls for a fresh Assessment Order. The article underscores the significance of procedural compliance and the court’s balanced approach in granting an opportunity for corrective measures.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Leave granted.
2. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Judicature at Bombay in Writ Petition (L) No. 16281/2021, by which the High Court in exercise of powers under Article 226 of the Constitution of India has set aside the Assessment Order declaring it as non est as the mandatory requirement under Section 144B of the Income Tax Act, 1961 (for short “the Act”), namely, the show cause notice with a draft Assessment Order was not issued and served upon the assessee.
3. Shri Balbir Singh, learned ASG, appearing for the Revenue has submitted that, as such, the High Court ought not to have entertained the writ Petition under Article 226 of the Constitution of India challenging the order of assessment. It is submitted that, even otherwise, if the Hon’ble Court was of the opinion that the assessment proceedings were in breach of principles of natural justice inasmuch as the show cause notice with draft Assessment Order was not served in that case, the matter ought to have remanded to the Assessing Officer and with liberty in favour of the Assessing Officer to pass a fresh order in accordance with law and after following due procedure as required under Section 144B of the Act.
4. Having heard Shri Balbir Singh, learned ASG, appearing of the Revenue and Shri Dharan Gandhi, learned counsel appearing for the respondent-assessee and having gone through the impugned judgment and order passed by the High Court and considering the fact that the Assessment Order was passed without issuing a show cause notice with a draft Assessment Order, as was mandatorily required, under Section 144B of the Act, as such, it cannot be said that the High Court has committed any error. However, at the same time, considering the fact that the Faceless Assessment Scheme has been introduced recently and therefore, the Revenue ought to have been given some leverage to correct themselves and take corrective measures and therefore the High Court ought to have remanded the matter to the Assessment Officer to pass a fresh order in accordance with law, after following the due procedure, as required under the law, namely, more particularly, under Section 144B of the
5. In view of the above for the reasons stated above, we modify the impugned judgment and order passed by the High Court and remand the matter to the Assessment Officer to pass a fresh Assessment Order, after following due procedure, in accordance with law under Section 144B of the Act.
All the contentions/defences which are available to the assessee on merits are kept open to be considered by the Assessing Officer in accordance with law and on its own merits.
With this, the present Appeal stands disposed of.
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