Faceless Assessment Order stayed for non issuance of Draft Assessment Order & Show Cause Notice

Last updated: 20 August 2021

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The Rajasthan High Court has stayed a faceless assessment order issued by the National Faceless Assessment Centre. The petitioner argued that they were not issued a draft assessment order or a show cause notice, denying them an opportunity to be heard. The court found these contentions to be prima facie correct and ordered the assessment order to be stayed.

Court :
Rajasthan High COurt

Brief :
The Hon’ble High Court of Rajasthan, the bench of Jaipur observed 'Taking into consideration the assessment order dated 21.04.2021, the contentions of learned counsel for the petitioner prima facie appears to be correct accordingly. In the meanwhile, the effect and operation of the assessment order dated 21.04.2021 shall remain stayed.'

Citation :
S.B. Civil Writ Petition No.8256/2021 dated August 4, 2021

In Aravali Shikshan Avum Anusandhan Sansthan v. National E-Assessment Centre & Others [S.B. Civil Writ Petition No.8256/2021 dated August 4, 2021], Aravali Shikshan Avum Anusandhan Sansthan('the Petitioner'), has filed the current writ petition against the order passed by the National Faceless Assessment Center under Section 144-B along with Section 143(3) of the Income Tax Act, 1961 ('the IT Act') imposing Additional Demand and well as Penalty under Section 270 A of the IT Act.

The Petitioner contends that in order to bring the case under Section 144-B, a draft assessment as well as a Show Cause Notice ('SCN') is to be served. However, none of the mentioned requirements were met and no opportunity of hearing was provided to the Petitioner for the same.

The Hon’ble High Court of Rajasthan, the bench of Jaipur observed 'Taking into consideration the assessment order dated 21.04.2021, the contentions of learned counsel for the petitioner prima facie appears to be correct accordingly. In the meanwhile, the effect and operation of the assessment order dated 21.04.2021 shall remain stayed.'

Further, issued the notice to National E-Assessment Centre ('the Respondent') following a stay application to be returnable within 6 weeks.

FAQ :

The main issue was that the petitioner did not receive a draft assessment order or a show cause notice before a final assessment order was issued, which meant they were not given an opportunity to respond.

The Hon'ble High Court of Rajasthan, sitting in Jaipur, made this decision.

The court granted a stay on the effect and operation of the assessment order dated 21.04.2021, pending further proceedings.

A faceless assessment order is an assessment order issued under Section 144-B of the Income Tax Act, 1961, where the assessment process is conducted electronically without direct interaction with tax officials.

A stay means that the assessment order is temporarily suspended and cannot be enforced or acted upon until the court makes a final decision.

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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