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2022 (6) TMI 1355 - AT - Income TaxStay on recovery of outstanding demand - proposing the draft assessment order National Faceless Assessment Centre (NFAC) has not followed the mandatory procedure of section 144B - HELD THAT:- The case of the assessee qua the violation of section 144B is, without issuing a show-cause notice and providing the assessee an opportunity of hearing, AO has proposed the draft assessment order. As observed, while disposing of assessee’s objection in this regard, DRP has directed the AO to pass a speaking order on assessee’s allegation of violation of provisions of section 144B - In the final assessment order, AO has remained completely silent on the issue. As observed, the major addition resulting in the present demand being share capital received from non-resident shareholders treated as unexplained investment u/s 68 - While disposing of assessee’s objection on this issue, learned DRP, while observing that the AO has not considered the evidences filed by the assessee, directed him to consider the evidences and pass a speaking order. We find, AO, while passing the final assessment order on the issue has simply repeated the observations made in the draft assessment order. The aforesaid facts clearly reveal that while passing the final assessment order the AO has failed to implement the directions of DRP in letter and spirit. AO, as it appears, has not followed the mandatory provisions of sub-section (10) and (13) of section 144C of the Act. Though, at this stage, we are not required to dwell upon the merits of the disputed issues, however, on appreciation of facts and materials placed before us and keeping in view the relevant statutory provisions and ratio laid down in the judicial precedents cited before us, we are convinced that the assessee has made out a strong prima facie case in its favour. Considering the prima facie case and balance of convenience, we are inclined to grant stay on recovery of outstanding demand for a period of 180 days from the date of this order or till the disposal of the corresponding appeal, whichever is earlier. Further, accepting assessee’s prayer for early hearing of appeal, which was not opposed by learned Departmental Representative, we direct the Registry to fix the appeal for hearing on 29.08.2022 on an out of turn basis. Paper-books, if any, must be filed by the parties sufficiently ahead of the date of hearing of appeal. Since, the date of hearing of appeal was announced in open court, in presence of both the parties, there is no need for issuance of separate notice of hearing to the parties. It is made clear, in case, the assessee seeks unnecessary adjournment, the stay granted will be vacated. We make it clear, the observations made by us in this order are purely in the context of grant of stay on recovery of outstanding demand and will have no bearing on the decision to be taken in deciding the appeal.
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