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Parag Kishorchandra Shah vs. NFAC  W.P. NO.11052 OF 2021 dated 27.10.21 Bombay HC

Brief Facts of The Case

i) Order dated 20.04.21 passed u/s. 143(3) r.w.s 144B;

ii) Assessee had been filing responses to notices u/s 142(1);

iii) Last 142(1) issued on 14.02.21 which was replied on 24.02.21;

iv) On 17.04.21(Saturday) at 02:43 PM A Show Cause Notice (SCN) was issued to the assessee;

v) SCN as to why assessment shouldn’t be completed as per the draft assessment order(DAO);

vi) Assessee was to submit response by 23:59 Hours of 19.04.21(Monday);

vii) Effectively only one day was given to assessee to reply despite Covid-19 situation;

viii) On 19.04.21 Assessee sought 10 days-time due to Covid-19 to fulfil requirements of notice;

ix) Ignoring the Assessee’s Adjournment request On 20.04.21 Assessment order was passed.

Contentions Raised by the Petitioner Assessee:

Principles of Natural Justice not followed as :

i) Adjournment request not considered;

ii) Submissions and Documents have not been considered by the AO while passing the order.

Contentions raised by the Revenue:

i) Affidavit filed by the AO that Assessment was getting time barred on 30.04.21;

ii) Adjournment was sought by the assessee to put pressure on AO

iii) By SCN dated 17.04.21 AO had given time to file reply till 19.04.21;

iv) Therefore there is no Legal Infirmity in the order.

Costs Imposed on AO for Passing Orders in Undue Haste by Bombay HC

Observations of Hon. Court:

i) Submissions of the Revenue are not unacceptable;

ii) It is like adding “Insult to Injury”;

iii) Even if the assessment was getting time barred on 30.04.21 AO could have at least given 5 days when he took almost 2 months to prepare draft Assessment Order;

iv) We are shocked by The tenor of the Affidavit filed by the AO, where the assessee is accused of bringing pressure;

v) This stand of the revenue is most unfortunate and gives impression of high-handedness;

vi) Even the Documents submitted and submissions made are not considered;

vii) The order is therefore set Aside;

viii) It is fit case to where direction must be given to AO to pay costs, to bring judicious approach amongst AO’s for effective implementation of faceless scheme in letter and spirit;

ix) AO should have been aware of Sub section (9) of Sec. 144B which renders entire assessment non-est. if 144B not complied with;

x) Undue haste in passing orders runs against the purpose of introduction of faceless schemes, resulting in overburdening of the courts;

xi) We direct the AO to pay a sum of 25000/- to PM Cares from his personal account in two weeks.

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