Income Tax Officer directed to pay Donation of 25k in PM Cares Fund for not following the law by Bombay HC

Petitioner suddenly received on Saturday, 17th April, 2021 at about 4.30 p.m., (almost two months later) a notice dated 17th April, 2021 digitally singed at 14:43:37 IST on 17th April, 2021 calling upon petitioner to show cause as to why the assessment should not be completed as per the Draft Assessment Order. This was the time when there was total lock-down in Maharashtra including Mumbai due to Covid pandemic.

Petitioner, in effect having been granted only one working day time to respond, therefore filed a request on 19th April, 2021 (18th April, 2021 being Sunday) bringing to the notice of respondents, problem faced due to Covid 19 situation and sought a reasonable period of ten days to respond to the Show Cause Notice.

Tax Officer took almost two months to prepare a Draft Assessment Order and gave a very unreasonably short period of less than 24 working hours to respond to the Draft Assessment Order. Ignoring even this request for a reasonable period of ten days, on 24th April, 2021 an Assessment Order digitally signed at 13:10:56 IST was passed followed with Notice of Demand under Section 156 of the Act and Notice of Penalty under Section 274 read with Section 271 A of the Act recomputing petitioner income by adding a sum of Rs.12,57,02,560/- both also dated 24th April, 2021.

Honorable High Court set aside impugned Assessment Order, Notice of Demand as well as Show Cause Notice, all dated 20th April, 2021.

Additionally Court said ” we are satisfied that this is a fit case where a direction needs to be issued to the Assessing Officer to pay costs to bring judicious approach amongst Assessing Officers for effective implementation of faceless assessment in its letter and spirit. The Assessing Officer should have been aware of the consequence provided under sub-Section (9) of Section 144B of the Act, which renders the entire assessment non-est in case procedure provided in
Section 144B is not complied with. Undue haste in passing order of assessment runs counter to the purpose behind introduction of Faceless Assessment Scheme resulting in over-burdening of the Courts. The imposition of costs on the Assessing Officer may not act as a penalty. Still, it will serve as a deterrent for implementing the Faceless Assessment Scheme to achieve its purpose and object. We, therefore, direct the Assessing Officer to pay a sum of Rs.25,000/- (Rupees Twenty Five Thousand Only) as donation to PM Cares. This amount shall be paid by the concerned Assessing Officer from his/her personal account to PM Cares”