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The Income Tax authorities have to remain bound by the Statutory Scheme of assessment: High Court of Delhi.

The Absence of a provision akin to Section 144B (9) in the E-Assessment Scheme, 2019 would not make any difference to such legal outcome in as much as the violation of principles of natural justice renders such decision void. A divisional Judge bench comprising Hon’ble Justice Manmohan and Justice Navin Chawla, in the matter of RMSI Private Limited Vs. National E-Assessment Centre, Delhi (CM APPL. 20366/2021), dealt with an issue where a petition has been filed challenging the Assessment Order dated 31.03.2021 passed under Section 143(3) read with Sections 143(3A) and 143(3B) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) against the petitioner under the E-Assessment Scheme, 2019 for the Assessment Year 2017-18.

In the present case, the counsel for the petitioner submitted that the Impugned Assessment Order is liable to be set aside inasmuch as it is not preceded by the issuance of a ‘Draft Assessment Order’ followed by a ‘Revised Draft Assessment Order’. The notice issued by the petitioner was accepted by the respondent. The counsel for the respondent raised questions on the maintainability of the petition by stating that the petitioner had already challenged the impugned assessment order by way of an appeal. The counsel for the respondent further submitted that issuance of a Draft Assessment Order cannot be held to be mandatory and failure to issue such order cannot be treated as fatal.

To this, the counsel for the petitioner submitted that the present petition is maintainable because the appeal that was filed was only to ensure that the period of limitation was not crossed. Further, the counsel pointed out that because such impugned order was passed without Jurisdiction, the petitioner had the remedy to file a writ petition. Further, the counsel submitted that absence of a provision akin to Section 144B (9) of the Act from the Scheme would not be of much relevance, as the scheme was framed under Section 143(3A) and the authorities have to mandatorily follow it.

The court observed that- “that it is mandatory for the National E-Assessment Centre to provide an opportunity to the assessee, by serving a notice calling upon him to show cause as to why the variation proposed in the Draft Assessment Order, which is prejudicial to the interest of the assessee, be not made.” Further, the court pointed that the absence of such notice is a clear violation of the principle of natural justice leading to the Assessment Order passed being declared void. The court also observed that since the petitioner had already availed the remedy of appeal, thereby the present petition was liable to be rejected.

The court observed that the writ petition was maintainable because the impugned order was passed without complying with the procedures mentioned in the scheme and such was also in violation of the principles of natural justice. However, the respondent/Revenue was given liberty to pass a fresh Assessment Order in accordance with the law. The petitioner shall also have the liberty to challenge any action of the respondent/Revenue in accordance with the law, in the event that it is aggrieved by the same. Thereby the court disposed of the writ petition and the other pending application.

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