Faceless assessments (FA) are meant to serve three critical purposes –
bridging the distance / location and time barriers (you don’t have to appear at a location and therefore saving time), removing
direct contact between adjudicator and assessee (cause of evil influence on adjudication which now can be done by a process involving a number of people) and
creating a trail (online mechanism creates a much better trail). FA is a
refreshingly welcome step, but as usual has implementation shortcomings.
In the same breadth, one cannot ignore the overarching, if not the sole purpose of adjudication: giving justice – to let the law prevail, to give a fair and equal opportunity to present and to speed up adjudication. Here potential (what it can deliver) of a system must be evaluated with expectation (what it should deliver).
Some of the recent observations on FA by the judiciary are disheartening and even unnerving when they could have easily been encouraging and ushering in a new era. Let me summarise observations by the courts on FA:
1. Final order passed without issue of show cause notice (say for variation made to income by the A.O.)
2. Non-issue of draft assessment order
3. Non-grant of personal hearing
4. Not granting ‘effective and meaningful’ opportunity to file objections against SCN / Draft Assessment Order (DAO)
5. Assessee not able to file a reply as portal was down
6. Passing order and making additions without giving any reason / basis of addition not furnished to the assessee
7. Failure to deal with assessee’s request for adjournment
8. Undue haste in passing the final order before expiry of time limit to file objections in SCN / DAO
9. Final order passed without considering objections / submissions against DAO
10. Non-grant of reasonable time
Here are some observations by courts (kept short in count and length for brevity):
…assessment order not having been passed in conformity with the requirements of the Faceless Assessment Scheme, 2019 has to be treated as non-est and shall be deemed to have never been passed. [Chander Arjandas Manwani vs. NFAC (2021) 130 taxmann.com 445 (Bom HC)].
…there is a blatant violation of the principles of natural justice as well as mandatory procedure prescribed in ‘Faceless Assessment Scheme’ [Interglobe Enterprises (P) Ltd. vs. NFAC (2021) 130 taxmann.com 54 (Del)].
..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. [Orissa Stevedores Ltd. vs. UOI (2021) 128 taxmann.com 163 (Orissa)].
…several requests had been made for personal hearing by the petitioner none of which were dealt with by the respondent / Revenue [Sanjay Aggarwal vs. NFAC (2021) 281 Taxman 282 (Del)].
…Revenue, to our minds, could not have side-stepped such safeguards put in place by the Legislature [YCD Industries vs. NFAC (2021) 437 ITR 119 (Del)].
…failed to deal with the petitioner’s request for a short adjournment. The petitioner… has, correctly, pointed out that there has been an undue haste by respondent… in passing the impugned assessment order… [Blue Square Infrastructure LLP vs. NFAC (2021) 436 ITR 118 (Del)].
…this Court feels that, since the chance of getting a personal hearing is part and parcel of the principles of natural justice, therefore, it comes within the domain of the writ jurisdiction, and on that ground this Court feels that this writ petition can be entertained. [Nagalina Nadar M.M. vs. Addl. / Joint / Deputy / Asst. CIT (2021) 130 taxmann.com 448 (Mad)].
From numerous reported cases, Courts seem to be left with no option but to send matters for fresh adjudication. Although the Courts may not have observed in recent cases, but reassessment does give a second innings to the Department. All this is nothing but loss of time, cost to the taxpayer, fruitless litigation and waste of precious court time with no consequence or accountability cast upon the tax officer to follow minimum standards of administration of law.
The risk in FAs without curtailing the above ‘spread of infection’ could make it rather baseless or lawless assessment. The danger signal is – will the taxpayer be forced to go to Courts to enforce basic rights? In a lighter vein: NeAC which is not giving proper hearing, will perhaps listen to these concerns!
Raman Jokhakar
Editor
