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Delhi HC Cancels Order Without an SCN, Compulsory U/S 144B(1)(xvi)(b)

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Arpit Kulshrestha

The Delhi High Court has stopped the assessment order passed without issuing a show cause notice or a draft assessment order which has been ordered under Section 144B(1)(xvi)(b) of the income tax Act.

The division bench of Justice Manmohan and Justice Navin Chawla rendered the department to issue a show-cause notice within 4 weeks.

The taxpayer mentioned that the assessment order would be passed with no issuance of the show cause notice and the draft assessment order, which were mandated under Section 144B(1)(xvi)(b). The respondent’s activity has breached Section 144B.

The taxpayer mentioned, the respondent has provided the final assessment order excluding issuing any draft assessment order or show cause notice and assessed the income of the applicant at Rs 25,85,92,670 a notice of demand has been provided by the department.

The court requested the Principal Commissioner of, the National Faceless Assessment Center, to emerge prior to the court through the method of an online video link.

The Principal Chief Commissioner, NaFAC would have appeared after the lunch session through the method of online video link. The Principal Chief Commissioner ensure to the court that the National faceless income tax assessment centre shall start the system of alerts and checks to confirm that there was no final assessment order passed without issuing the show cause notice before and a draft assessment order and without acknowledging the answer furnished via the taxpayer and the appeal if there is any then through the taxpayer for the chance of hearing.

For the search, the court directed the Principal Chief Commissioner that if the national faceless assessment centre reverse the final assessment order it would be passed without providing the show-cause notice or in breach of the natural justice principles.

Important: HC Refuses Assessment Order Due to Not Attached of Show-Cause Notice

The court elaborated, liberty is given to the department for issuing the draft assessment order or show cause notice to the applicant and the proceedings would be carried on as per the law.

Case Title RMSI Private Limited Versus NaFAC
Citation W.P.(C) 13553/2021 & CM APPL.42773/2021
Date 18.11.2022
Counsel For Petitioner Advocate Piyush Kaushik
Counsel For Respondent Sr.Standing Counsel Puneet Rai
Delhi High Court Read Order

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Published by Arpit Kulshrestha

Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous.
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