Indu Goenka v. Assessment Unit, Income Tax Department & Ors

Item no. 05 IN THE HIGH COURT AT CALCUTTACIVIL APPELLATE JURISDICTION APPELLATE SIDE Present:The Hon’ble Justice T.S. Sivagnanam And The Hon’ble Justice Hiranmay Bhattacharyya MAT 306 of 2023 + IA NO.CAN 1 OF 2023 INDU GOENKA vs. ASSESSMENT UNIT, INCOME TAX DEPARTMENT & Ors. Ms. Megha Agarwal. For the Respondents : Mr. Smarajit Roychowdhury T.S. Sivagnanam J.: 1.This intra-Court appeal is directed against the order dated30[th] January, 2023 passed in W.P.A. 1306 of 2023. In the said writpetition the appellant had challenged the assessment order dated 20[th] December, 2022 under Section 143(3) read with Section 144B of theIncome Tax Act, 1961 (for brevity the “Act”) on the ground that it is intotal violation of the principles of natural justice and it has ignored allthe formalities to be observed as enumerated under the StandardOperating Procedure (SOP) for faceless assessment orders. The learnedSingle Bench had dismissed the writ petition on the ground that thereasoning given by the assessing officer cannot be examined in a writproceeding as the Court cannot act as an appellate authority.Questioning the correctness of the order, the appellant is before thisCourt by way of this intra-Court appeal. 2.We have heard Mr. Abhratosh Majumdar, learned seniorcounsel for the appellant and Mr. Smarajit Roy Chowhdhury, learnedsenior standing counsel for the respondents. 3.At the first blush it may appear that the challenge is to theassessment order passed by the authority on the merits of the case.However, on a careful consideration of the entire facts andcircumstances of the case, it is clear that the appellant has notquestioned the merits of the assessment but the decision makingprocess. The Standard Operating Procedure (SOP) under the FacelessAssessment framed under Section 144B of the Act had been issued bythe National Faceless Assessment Centre, Delhi and communicated toall the Principal Chief Commissioners, Income Tax under the cover of aletter dated 3[rd] August, 2022. The procedure enumerates as to how theassessment has to be made and in paragraph N.1.3 it has been stated that the authority should ensure adherence to the principles of naturaljustice and reasonable opportunity to the assessee, timelines to be givenfor obtaining response to the show cause notice which have also beenstipulated. Further, the SOP also gives the format of final assessmentorder in AU-9 which sets out the various heads under which theassessment order has to be passed with due discussion. 4.On a cursory perusal of the assessment order dated 20[th]December, 2022, which is impugned in the writ petition, one gets animpression that it is in compliance with the SOP as it contains requisitesub-headings but however, on a closure reading of the assessment orderit is found that the assessing officer has acted in a most perversemanner in passing the assessment order. We say so because the first21 pages of the assessment order is a verbatim extract of the showcause notice. In page nos.22 and 23 in two paragraphs the reply givenby the assessee has been summarized. From page nos.23 to 36 of theassessment order it is once again extract of the show cause andultimately at page nos.37 and 38 the total income has been determinedand the assessment is completed. 5. The impugned assessment order is a classical example as to howan assessment should not be made. The assessing officer has reducedthe procedure to an empty formality, which has to be deprecated. Thisleaves us with no other option except to quash the assessment order. Inthe result, the appeal as well as the writ petition are allowed and the assessment order dated 20[th] December, 2022 is quashed. Consequently, I.A. No. CAN 1 of 2023 is disposed of. 06.There shall, however, be no order as to costs. 5. The impugned assessment order is a classical example as to howan assessment should not be made. The assessing officer has reducedthe procedure to an empty formality, which has to be deprecated. Thisleaves us with no other option except to quash the assessment order. Inthe result, the appeal as well as the writ petition are allowed and the assessment order dated 20[th] December, 2022 is quashed. Consequently, I.A. No. CAN 1 of 2023 is disposed of. 06.There shall, however, be no order as to costs. 07.Urgent photostat certified copy of this order, if applied for,be furnished to the parties expeditiously upon compliance of all legalformalities. be furnished to the parties expeditiously upon compliance of all legalformalities. (T. S. Sivagnanam, J.) I agree. (Hiranmay Bhattacharyya, J.) RP/Pallab (AR. CT.)