Case Note & Summary
The petitioner, Piramal Enterprises Limited, a registered company engaged in pharmaceutical manufacturing and trading, filed its original return of income for assessment year 2017-18 in November 2017 declaring nil income, and a revised return in March 2019. The petitioner was aggrieved by a draft assessment order dated 22/04/2021 passed under the Faceless Assessment System/e-Assessment. The petitioner contended that despite filing detailed objections and requesting a personal hearing, the Assessing Officer did not consider the objections and passed the draft order without granting a hearing. The respondents argued that the scheme does not mandate a personal hearing and that the objections were considered. The court examined the provisions of Section 144B of the Income Tax Act, 1961, which provides for faceless assessment but also requires the Assessing Officer to consider the assessee's objections and, if requested, grant a personal hearing. The court held that the draft assessment order was passed in violation of principles of natural justice as the petitioner's objections were not considered and no personal hearing was granted despite a specific request. The court quashed the draft assessment order and directed the Assessing Officer to consider the petitioner's objections afresh and pass a fresh order after granting a personal hearing if requested. The court also clarified that the period from the date of the draft order till the date of this judgment shall be excluded for computing limitation.
Headnote
A) Income Tax - Faceless Assessment - Natural Justice - Section 144B of Income Tax Act, 1961 - Draft assessment order quashed as petitioner's objections were not considered and no personal hearing was granted despite request - Held that the Assessing Officer must consider objections and grant personal hearing if requested, failing which the order is vitiated (Paras 1-34).
Issue of Consideration
Whether the draft assessment order passed under the Faceless Assessment Scheme is liable to be quashed for non-compliance with principles of natural justice, specifically for not considering the petitioner's objections and not granting a personal hearing despite a request.
Final Decision
The court quashed the draft assessment order dated 22/04/2021 and directed the Assessing Officer to consider the petitioner's objections afresh and pass a fresh order after granting a personal hearing if requested. The period from the date of the draft order till the date of this judgment shall be excluded for computing limitation.
Law Points
- Natural justice
- Faceless Assessment Scheme
- Section 144B of Income Tax Act
- 1961
- Personal hearing
- Consideration of objections
- Draft assessment order
- Writ jurisdiction
