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2021 (8) TMI 1386 - HC - Income TaxValidity of faceless assessment u/s 144B - notice of demand, issued u/s 156 and the notice issued for initiating penalty proceedings u/s 270A - HELD THAT:- As per sub-clauses (b) and (c) of clause (xvi) of Section 5(1) of the 2019 Scheme, read with Section 144B(7)(vii) oblige the revenue, to follow the principles of natural justice, where there is a variation made in the taxable income to the prejudice of the assessee. [See Ritnand Balved Education Foundation vs. National Faceless Assessment Centre [2021 (6) TMI 17 - DELHI HIGH COURT]]. A perusal of the impugned assessment order would show that, variation has been made in the taxable income to the prejudice of the assessee.The record shows that, the assessee had claimed exemptions under Section 11/12 of the Act, and thus, declared its income in the relevant AY i.e., 2018-2019, as “Nil”. AO via the impugned assessment order has made an addition to the taxable income of the assessee. In view of this, it is evident that variation was made to declared taxable income of the assessee which, as noticed above, was Nil, albeit, without issuance of a show cause notice-cum-draft assessment order. Admittedly, the assessee had no opportunity to respond to the additions made. Given these admitted circumstances, the impugned assessment order as also the consequential notices, issued under Section 156 and 270A would have to be set aside.
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