Order of assessment by the assessing officer violating principles of natural justice is void and bound to be set aside: Rajasthan High Court.
Assessing Officer’s (AO) order for re-assessment is void and set to be revoked if it violates the principles of natural justice is upheld by the Jaipur bench of Rajasthan High Court through a division bench of Hon’ble Chief Justice Mr. Akil Kureshi and Hon’ble Mr. Justice Sudesh Bansal in the case of Rati Ram Bambelwal v. Pr. CIT and Others. The brief facts of the case are that petitioner is an individual engaged in the business of trade of jewel commodities. For the assessment year 2013-14 the petitioner declared total income of Rs.2,41,610/-. The return was taken up for scrutiny and the assessing officer issued a notice under Section 148 of the IT Act, 1960. This was followed by notices   issued   under   Section   142(1)   of   the   Act.   Since   the petitioner did not reply to these notices, the Assessing Officer issued a final notice under Section 144 of the Act and stating that the Assessing Officer desired to complete the assessment by way of best judgment as he has not replied to earlier notices. Further, he mentions that assessee should response through registered e-mail account. The assessee replied to the said notice which is accepted by the AO. Despite this, the assessment which was carried out through faceless assessment system, did not acknowledge such reply and the contents thereof. The AO made 7 additions to the tune of Rs. 72,14,490/- and proposed penalty. The Court held that the order of assessment suffers from violation of principles of natural justice. As noted in response to the notice issued by the Assessing Officer under Section 144 the petitioner had filed a response within time permitted wherein he opposed the proposal for making any addition to his declared income. He also disputed the statements of persons on which the Assessing Officer wanted to rely upon. He asked for their cross-examination. It was open for the Assessing Officer to accept or to reject the stand of the petitioner including his request for cross-examination of the witnesses. However he could not have ignored the reply and proceeded to finalize the assessment as if there was no response from the petitioner whatsoever. Since the AO ignored the reply filled by the assessee the Court held that the assessment order violates the principles of natural justice that is right to be heard under the principle “audi alteram partem and on this ground we are inclined to set aside the order of assessment.” Ordinarily when against an order statutory appeal is available, the Court would be slow in interfering in a writ petition bypassing such appeal route. This is more so in fiscal matters. However when it   comes to the clear cut case of breach of principles of natural justice and denial of fair hearing, this self-imposed restriction is not applied. Therefore, the order of assessment suffers from violation of principles of natural justice, is void, and bound to be set aside.
 on 17 02 2022 at 04:03:58 PM HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPURD.B. Civil Writ Petition No. 11053 2021Rati Ram Bambelwal S o Prabhati Lal Bambelwal Aged About55 Years R o 0578 Malpura Krishi Upaj Mandi Malpura Tonk 304502 Rajasthan. PetitionerVersus1. National Faceless Asessment Centre Delhi Through ItsIncome Tax Officer.2. Principal Chief Commissioner Of Income Tax Delhi Room No 356 C.r.Building Ip Estate New Delhi Delhi 110002.3. Income Tax Officer Ward Tonk Malpura Gate Kala Baba Tonk Rajasthan 304001. RespondentsFor Petitioner(s) : Mr. Javed Khan For Respondent(s): Mr. Nikhil Simlote on behalf of Mr.R.B.Mathur(Sr.Advocate) through VCHON BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON BLE MR. JUSTICE SUDESH BANSALJudgment15 02 20221.Heard learned counsel for the parties. 2.Petitioner has challenged an order of assessment dated15.09.2021 passed by the Assessing Officer for the assessmentyear 2013 14. Briefly stated the facts are as under: 3.The petitioner is an individual and is engaged in the businessof trade of jewel commodities. For the assessment year 2013 14the petitioner had filed return of income on 19.08.2013 declaringtotal income of Rs.2 41 610 . The return filed by the petitionerwas taken in scrutiny. The assessing officer passed an order of[CW 11053 2021]assessment under Section 143(3) of the Income Tax Act 1961(for short the Act ) accepting the assessee s declared income. 4.To reopen such assessment the Assessing Officer had issueda notice under Section 148 of the Act. This was followed bynotices issued under Section 142(1) of the Act. Since thepetitioner did not reply to these notices the Assessing Officerissued a final notice on 03.09.2021 under Section 144 of the Actand put the petitioner to notice that since he had not responded tothe earlier notices the Assessing Officer desired to complete theassessment by way of best judgment. He also outlined his broadproposals for completing such assessment and in paragraph 6 ofthe notice stated that the assessee should submit the responsethrough registered e mail account by 10.09.2021 and as perparagraph 7 of the notice in case the assessee failed to make sucha response the assessment shall be finalized under Section 144 ofthe Act. 5.The assessee replied to the said notice dated 03.09.2021under a response dated 10.09.2021. This is borne out from a copyof the e proceedings response acknowledgment produced by thepetitioner at Annexure 8. This document indicates the name of thepetitioner the assessment year concerned it refers to noticeunder Section 144 of the Act dated 03.09.2021 and records10.09.2021 as due date for submission. In response it indicatesthat the reply was received. 6.We may therefore proceed on the basis that petitioner hadfiled reply to the last notice issued by the Assessing Officer on03.09.2021. Despite this the assessment which was carried outthrough faceless assessment system did not acknowledge suchreply and the contents thereof. This is clear from a bare perusal of[CW 11053 2021]the order of assessment in which the Assessing Officer hasindicated that there was no response from the petitioner to thenotice under Section 148 under Section 142(1) as well as hisnotice issued under Section 144 of the Act. He thereforeproceeded to complete the assessment by making certain additionand assessing total income of the petitioner to Rs.72 14 490 with the proposal to initiate penalty proceedings. 7.Having heard learned counsel for the parties and havingperused the documents on record the order of assessment suffersfrom violation of principles of natural justice. As noted in responseto the notice issued by the Assessing Officer under Section 144the petitioner had filed a response within time permitted. Perusalof the reply of the petitioner would show that he opposed theproposal for making any addition to his declared income. He alsodisputed the statements of persons on which the Assessing Officerwanted to rely upon. He asked for their cross examination. It wasopen for the Assessing Officer to accept or to reject the stand ofthe petitioner including his request for cross examination of thewitnesses. However he could not have ignored the reply andproceeded to finalize the assessment as if there was no responsefrom the petitioner whatsoever. Unfortunately this is what theAssessing Officer has done and in process caused injustice. 8.Only on this ground we are inclined to set aside the order ofassessment. Ordinarily when against an order statutory appeal isavailable the Court would be slow in interfering in a writ petitionbypassing such appeal route. This is more so in fiscal matters.However when it comes to the clear cut case of breach ofprinciples of natural justice and denial of fair hearing this self imposed restriction is not applied. [CW 11053 2021]9.Under the circumstances the impugned order of assessmentdated 15.09.2021 is set aside. The assessment is reopened andshall be completed by the respondents after taking into accountthe response of the petitioner dated 10.09.2021 to the noticeissued by the Assessing Officer under Section 144 of the Act. 10.The petition is disposed of accordingly.J(AKIL KURESHI) CJKAMLESH KUMAR 4 