November 2021
Assessment – Faceless assessment – Writ – Request by assessee for personal hearing – Orders passed and consequential notices of demand and penalty without affording personal hearing – No information on whether steps enumerated in provision taken – Proceedings under assessment order and subsequent notices stayed while notice on writ petition issued
By K. B. Bhujle
Advocate
9 Lemon Tree Hotels Limited vs. NFAC [2021] 437 ITR 111 (Del) A.Y.: 2018-19; Date of order: 21st May, 2021 Ss. 143(3), 144B, 144B(7), 156, 270A and 274 of ITA, 1961
Assessment – Faceless assessment – Writ – Request by assessee for personal hearing – Orders passed and consequential notices of demand and penalty without affording personal hearing – No information on whether steps enumerated in provision taken – Proceedings under assessment order and subsequent notices stayed while notice on writ petition issued
For the A.Y. 2018-19, a notice-cum-draft assessment order was issued to the assessee calling upon it to file its objections. Since the matter was complex both on the facts and on law, the assessee made a request for a personal hearing to the A.O. But orders were passed u/s 143(3) r.w.s. 144B and consequential notices of demand were issued u/s 156 and for initiation of penalty proceedings u/s 274 r.w.s. 270A.
The assessee filed a writ petition contending that the order and notices were passed in breach of the principles of natural justice. The Delhi High Court, while issuing notice on the writ petition, stayed the operation of the order passed u/s 143(3) r.w.s. 144B and the consequential notices of demand issued u/s 156 and for initiation of penalty proceedings u/s 274 r.w.s. 270A, on the grounds that the Department did not inform whether steps under sub-clause (h) of section 144B(7)(xii) had been taken.
The High Court observed that in faceless assessment, prima facie, once an assessee requests for a personal hearing the officer in charge, under the provisions of clause (viii) of section 144B(7) would, ordinarily, have to grant a personal hearing. According to the provisions of section 144B(7)(viii), the discretion of the officer in charge of the Regional Faceless Assessment Centre is tied in with the circumstances covered in sub-clause (h) of section 144B(7)(xii).
