High Court set asides final assessment order passed by NFAC without issuing draft assessment order
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Case Details: |
Orissa Stevedores Limited vs. Union of India and ors. |
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Appeal No.: |
W.P. (C) No. 19402 of 2021 |
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Order Pronounced by: |
Orissa High Court |
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Date of Order: |
08-07-2021 |
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In favour of: |
Assessee |
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Assessment Year: |
2018-19 |
Brief Facts:
- The present writ petition challenged the assessment order passed by National Faceless Assessment Centre (NFAC) u/s 143(3) read with section 144B of the Income Tax Act raising a demand of Rs. 735.16 crores on the petitioner.
- The learned counsel for the petitioner submitted that, it was mandatory for the department to have first prepared a draft assessment order and provide a copy thereof to the petitioner, giving the opportunity of responding thereto, before passing the final assessment order.
- Reliance has been placed on two judgements of the Delhi High Court dated 27th May 2021 in W.P. (C) No. 5552 of 2021 (YCD Industries v. National Faceless Assessment Centre, Delhi) and in W.P. (C) No. 5491 of 2021 (M/s Lokesh Constructions P. Ltd. v. ACIT). In both the aforesaid judgements, similar assessment orders of NFAC were challenged and were set aside by the High Court on identical grounds viz. that no show cause notice-cum-draft assessment order u/s 144B was issued to petitioner before passing the final assessment order and no notice under section 156 and section 274 read with section 270A of the Act was issued either.
- The impugned assessment order is not only in considerable variation of the figures for the earlier AYs but is also prejudicial to the interests of the assessee. In other words, the requirement of Section 144-B (1)(xvi) of the Income Tax Act for triggering the procedure of first preparing a draft assessment order and providing it to the Petitioner for its response stands attracted in this case.
High Court Verdict:
This court sets aside the impugned assessment order of the NFAC as well as all consequential demand notices/ orders and grants liberty to the Department to pass a fresh assessment order for the A.Y. in question in accordance with the law. The department shall give the Petitioner a personal hearing on a date and at a time which shall be communicated to the Petitioner sufficiently in advance.
