Ramshankar Mahapatra Vs Central Board of Direct Taxes (Orissa High Court)
In a significant ruling emphasizing adherence to principles of natural justice, the Orissa High Court has set aside an assessment order passed by the National Faceless Assessment Centre (NFAC) against Ramshankar Mahapatra. The court found that the NFAC failed to provide the stipulated seven days’ time for the assessee to respond to a show cause notice, as mandated by its own Standard Operating Procedure (SOP) under Section 144B of the Income Tax Act, 1961. This decision offers crucial relief to the petitioner, who was subjected to a demand of Rs. 1,36,20,813/-.
The petitioner, Ramshankar Mahapatra, challenged the assessment order dated March 11, 2025, which pertained to the assessment year 2017-18 and was issued under Section 147 read with Section 144B of the Income Tax Act. The case was selected for reassessment after the petitioner filed an income tax return on March 23, 2024. The core of the petitioner’s grievance was that on January 16, 2025, the Assessment Unit of the NFAC instructed him to upload certain evidence, granting a mere four days for compliance. The petitioner contended that this period was insufficient, particularly given the voluminous nature of the documents to be uploaded and the technical limitations of the system’s space for uploading. As a result, he could not submit all necessary records within the stipulated timeframe, leading to the assessment being framed and the demand raised.
