Order passed complying with principles of natural justice mandate of the statute u/s 144B(1)(xvi)(b) IT Act to be Complied
Pooja Singla Builders and Engineers Pvt. Ltd. vs. National Faceless Assessment(Delhi High Court); W.P.(C) 9651/2021; 06.09.2021
The Writ Petition was filed challenging the assessment order against the Petitioner, and the notice of demand and notice of show cause notices for imposition of penalty under Section 274 read with Section 271AAC(1) of the Income Tax Act, 1961 [the Act] for the Assessment Year 2018-2019.
The Petitioner contended that no mandatory valid show cause notice as well as draft assessment order had been issued to the Petitioner before drawing an adverse inference against the Petitioner and creating a tax demand of Rs.3,11,37,680/-.
It was observed by the Ld. Bench of the High Court of Delhi that Section 144B(1)(xvi)(b) of the Act mandatorily provides for issuance of a prior show cause notice and draft assessment order before issuing the final assessment order. It was further noted that it is settled law that when power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and other methods of performance are forbidden. (See: Taylor vs. Taylor, (1875) 1 Ch.D. 426; Nazir vs. King Emperor, AIR 1936 PC 253; and Babu Verghese vs. Bar Council of Kerala, (1999) 3 SCC 422). Consequently, even if it is assumed that the principles of natural justice have been complied with in the present case, then also the mandate of the statute would have to be complied with.
It was held that since in the present case no prior show cause notice as well as draft assessment order had been issued, there has been a violation of the mandatory procedure prescribed in law. In view of the aforesaid the impugned assessment order, notice of demand notice of show cause notices for imposition of penalty under Section 274 read with Section 271AAC(1) of the Income Tax Act, 1961 [the Act] for the Assessment Year 2018-2019 were set aside and the matter was remanded back to the Assessing Officer, directing him to a show cause notice and draft assessment order and thereafter pass a reasoned order in accordance with law.