Orissa High Court
Case Details
ORISSA HIGH COURT : CUTTACK W.P.(C) No.11421 of 2025 In the matter of an Application under Articles 226 and 227 of the Constitution of India *** M/s. Manishri Refractories and Ceramics Private Limited At: Industrial Estate, Madhupatna Cuttack Sadar, Cuttack – 753 010 Represented by its Director Sri Biswajit Mohanty, aged about 61 years S/o-. Late Baishnab Charan Mohanty At-Govinda Niwas, Arunodaya Nagar Cuttack, P.O.-Arunodaya Nagar District: Cuttack – 753 012. … -VERSUS- 1. Central Board of Direct Taxes (CBDT) represented by its Chairman, North Block, New Delhi-110002. 2. Principal Commissioner of Income Tax, Odisha, Bhubaneswar-1, Aayakar Bhawan, Rajaswa Vihar, Bhubaneswar-751007 3. National Faceless Assessment Unit Government of India, Ministry of Finance, Income Tax Department, New Delhi Petitioner W.P.(C) No.11421 of 2025 … Opposite Parties Page 1 of 8
Legal Reasoning
Counsel appeared for the parties: For the Petitioner : M/s. Tushar Kanti Satapathy, K.R. Satapathy, D. Hazra and P.R. Mishra, Advocates
Legal Reasoning
: Mr. Avinash Kedia, Junioir Standing Counsel for Department of Income Tax For the Opposite Parties P R E S E N T: HONOURABLE CHIEF JUSTICE MR. HARISH TANDON AND HONOURABLE JUSTICE MR. MURAHARI SRI RAMAN Date of Hearing : 05.05.2025 :: Date of Order : 05.05.2025
Decision
O R D E R MURAHARI SRI RAMAN, J.— Assailing the order dated 18.03.2025 passed by the opposite party no.3-National Faceless Assessment Unit under Section 143(3) read with Section 144B of the Income Tax Act, 1961 pertaining to assessment year 2023-24, the petitioner has come up before this Court invoking provisions under Articles 226 and 227 of the Constitution of India. 2. The case of the petitioner was selected for scrutiny under Section 143(3) of the Income Tax Act, 1961 (“I.T. W.P.(C) No.11421 of 2025 Page 2 of 8 Act”, in short) having filed its return of income in ITR-6 under Section 139(1) pertaining to assessment year 2023-24. Intimation dated 19.06.2024 was issued to the petitioner for completion of assessment as per procedure laid down in Section 144B of the I.T. Act pursuant to which submission in support of their return was requested to be furnished by 04.07.2024. The petitioner has stated to have uploaded 3CA, 3CD, financial statement and TDS statement and 26AS etc. in the portal. On 17.02.2024, in continuation with the assessment proceedings, opposite party no.3-National Faceless Assessment Unit instructed the petitioner to upload certain evidences granting him barely four days, which is considered by the petitioner to be insufficient for compliance. 3. To comply with show cause notice dated 26.02.2025, with much difficulty the petitioner could upload voluminous record on 01.03.2025, 09.03.2025 and 14.03.2025. Since inadequate time was granted for uploading the documents and there was insufficient space allotted for uploading, it took considerable time for scanning the documents and submitting the same before the assessing officer. However, without considering documents which were uploaded on 14.03.2025, the assessment has been framed raising demand to the tune of Rs.3,29,11,611/-. W.P.(C) No.11421 of 2025 Page 3 of 8 4. Sri Tushar Kanti Satapathy, learned counsel appearing for the petitioner drew attention of this Court to Standard Operating Procedure dated 03.08.2022 issued by the Ministry of Finance, Central Board of Direct Taxes National Faceless Assessment Centre, Paragraph-N.1.3 of which is reproduced hereunder:- “To ensure adherence to the principles of natural justice and reasonable opportunity to the assesse, timelines to be given for obtaining response to the SCN shall be: N.1.3.1 Response time of 7 days from the issue of SCN. N.1.3.2 Response time of 7 days may be curtailed, keeping in view the limitation date for completing the assessment.” 4.1. He submitted that the show cause notice under Section 143(3) being issued on 26.02.2025 fixing due date of submission of reply on 01.03.2025, the same is contrary to the Standard Operating Procedure. He further submitted that since voluminous record was to be uploaded on the portal for faceless assessment and the system having limited space, the petitioner could not submit necessary record within the stipulated period. However, the petitioner uploaded the documents in three phases i.e. 01.03.2025, 09.03.2025 and 14.03.2025, which fact is also stated in the reply dated 14.03.2025. Sri Tushar Kanti Satapathy, learned counsel for the petitioner submitted that while undertaking the assessment, the Assessing Authority though has taken W.P.(C) No.11421 of 2025 Page 4 of 8 into consideration the documents uploaded on 01.03.2025 and 09.03.2025, the documents furnished on 14.03.2025 were ignored. He fervently prays for setting aside the assessment order so as to grant the petitioner to avail one opportunity to present its matter before the Faceless Assessment Unit. 5. Sri Avinash Kedia, learned Junior Standing Counsel for the Income Tax Department on instructions submitted that the Faceless Assessment Unit has stipulated the date by which the petitioner was required to furnish documents. He further submitted that within the period stipulated, the petitioner could very well upload the documents available with him. The Assessing Authority having considered the documents available with him passed the appropriate order, which warrants no interference. 6. Section 144B(6)(xi) of the I.T. Act empowers the Principal Chief Commissioner or the Principal Director General, as the case may be, in-charge of the National Faceless Assessment Centre, to lay down the standards, procedures and processes for effective functioning of the National Faceless Assessment Centre and the units set up, in an automated and mechanised environment with prior approval of the Board. W.P.(C) No.11421 of 2025 Page 5 of 8 7. The Standard Operating Procedure under the Faceless Assessment provisions of Section 144B of the I.T. Act issued by the Government of India, Ministry of Finance, Central Board of Direct Taxes National Faceless Assessment Centre on 03.08.2022 clearly lays down that in order to afford natural justice and reasonable opportunity to the assessee, seven days’ time from the issue of show cause have been stipulated. Having glanced at show cause notice issued under Section 144(3), it is apparent that the same was issued on 26.02.2025 with stipulation for submission of reply by 01.03.2025. Therefore, on the face of the record, the time so specified by the Faceless Assessment Unit is not in consonance with the Standard Operative Procedure. The reply dated 14.03.2025 addressed to the Assessing Officer of National Faceless Assessment Centre clearly reveals that the petitioner has uploaded necessary documents sought for by the Authority concerned on 01.03.2025, 09.03.2025 and 14.03.2025. As it is not disputed by the counsel for the Income Tax Department that the Assessing Authority though considered the documents uploaded on 01.03.2025 and 09.03.2025, omitted to consider the documents uploaded on 14.03.2025. The assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act depicts that the same was passed on 18.03.2025. Under such premise, had the Assessing Authority been W.P.(C) No.11421 of 2025 Page 6 of 8 meticulous, it could have considered documents uploaded on 14.03.2025, while he took up documents for examination which were uploaded on 01.03.2025 and 09.03.2025. Therefore, this Court is of the view that there has been flagrant violation of the principles of natural justice. 8. It is apt to refer to decision of Hon’ble Supreme Court rendered in Basudeo Tiwary Vrs. Sido Kanhu University and others, (1998) 8 SCC 194; Nagarjuna Construction Company Limited Vrs. Government Andhra Pradesh, (2008) 16 SCC 276 as relied on by the counsel for the petitioner to contend that violation of natural justice leads to arbitrariness and when right is affected by decision taken by statutory powers, the Court may presume existence of a duty to observe the rules of natural justice. There is no cavil that whenever it is necessary to ensure against the failure of justice, the principles of natural justice must be read into the provision. 9. In view of the aforesaid facts and the legal position, the Court, while diligently considering the material available on record, perceives that inadequate time was granted to the petitioner to furnish voluminous documents. This apart, the Assessing Authority appears to have omitted to take into consideration the documents furnished before him on 14.03.2025, even though he framed W.P.(C) No.11421 of 2025 Page 7 of 8 assessment in Section 143(3) of the I.T. Act on 18.03.2025. Therefore, this Court is inclined to set aside the Assessment Order dated 18.03.2025 passed under Section 143(3) read with Section 144B of the Income Tax Act and remit the matter to the opposite party no.3- National Faceless Assessment Unit, Income Tax Department for fresh adjudication of the matter with respect to financial year 2022-23 relevant to assessment year 2023-24. It is hoped that the Assessing Authority shall afford reasonable opportunity to furnish required documents necessary for the purpose of assessment for the said period. 10.With the aforesaid observation and direction, the writ petition stands disposed of. (HARISH TANDON) CHIEF JUSTICE (MURAHARI SRI RAMAN) JUDGE Signature Not Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-Charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 06-May-2025 20:38:07 High Court of Orissa, Cuttack The 5th May, 2025/Aswini W.P.(C) No.11421 of 2025 Page 8 of 8