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TMI Blog2022 (6) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... n on 29.10.2018 and declared the net profit as Rs.3,32,84,528/- as against the gross income of Rs.3,41,36,190/-. 4.The learned counsel for the petitioner further submits that for the assessment year 2018-2019 onwards, the assessment was to be completed electronically in E-Proceedings facility through E-filing Website of the Income Tax Department. In this connection, the petitioner was issued with a notice under Section 143(2) of the Income Tax Act on 26.09.2019. The learned counsel for the petitioner submits that thereafter on 06.02.2021, another notice was issued to the petitioner under Section 143(2) of the Income Tax Act and in connection with the above, the petitioner was called upon to give details. Specifically, it was stated that the net profit has been reported for the assessment year 2018 - 2019 to the tune of Rs.2,33,14,070/- [Rs.5,65,98,598-3,32,84,528] should not be treated as undisclosed business income and considered for addition. Paragraph 3 of the said notice reads as under:- ''(iii) From the above it is apparent that the net profit has been under reported in the return of income for A.Y.2018-19 to the tune of Rs.2,33,14,070 (Rs.5,65,98,598-3,32,84,528). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truction of CBDT, dated 29.12.2015. It is therefore, submitted that as there is a manifest violation of the procedure prescribed for E-Proceedings, which was implemented from 2018 - 2019, the impugned order has to go. It is submitted that without issuing a proper show cause notice, where there is a proposal for deviation, the order has to go. 10. The learned counsel for the petitioner submits that the notice issued under Section 143 (2) of the Income Tax Act was a notice without any details to be furnished warranting the documents. Unless the petitioner was given a proper opportunity to reply to notice issued under Section 143 (2) of the Income Tax Act, 1961, the question of treating the subsequent notice, dated 06.02.2021 as the show cause notice does not arise. It is therefore submitted that the impugned order has been passed and the matter is remitted back to the respondent. 11. The learned counsel for the petitioner also submits that in terms of CBTD Circular, dated 20.08.2019, where the show cause notice contemplates any adverse issue by the Assessing Officer and assessee should be given personal hearing. The learned counsel for the petitioner submits that personal hearing i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot anywhere contemplate issuance of a show cause notice prior to finalisation of scrutiny assessments, as a matter of procedure and good office, the Assessing Authority is expected to crystalise the issues arising from the return of income filed by an assessee, the questionnaires issued under Section 142(1) and notices under Section 143(2) and responses thereto, issue a show cause notice setting out the issues, solicit the response of the assessee and pass orders only thereafter, after hearing the assessee concerned." 16. The learned Senior Standing Counsel for the respondent submits that indeed the petitioner was issued with a show cause notice in this case to which the petitioner has also replied on 12.02.2021. Therefore, there is no merits in this present writ petition. The learned Senior Standing Counsel for the respondent submits that the failure on part of the petitioner to respond to notice under Section 143 (2) of the Income Tax Act, dated 26.09.2019 shows that the petitioner was not serious. 17. The learned Senior Standing Counsel for the respondent further submits that it is not open for the petitioner to state that the reply to the show cause notice, dated 06.02.2021 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to reply to the same. Thereafter, the petitioner was issued with a show cause notice dated 06.02.2021 wherein, which proposed assessment to be completed. 21. The notice issued on 06.02.2021 is the show cause notice for the purpose for completing the assessment. The notice stated that the petitioner should reply on 12.02.2021 and in case no response was given by the due date and it is presumed that the petitioner has no objection to the proposed condition and assessment has been completed accordingly. The petitioner has also filed a detailed reply on 12.02.2021. The reply reads as under:- "9. In the notice under Section 143 (2) dated 26.09.2019 there were no specific queries and only a general direction to submit response with supporting document further, para No.4 of the said notice states that "in course of assessment proceedings, if required, specific questionnaire(s) or requisition(s) for further information/document may be issued subsequently". We honestly believed that such queries will be raised susbequently and a reasonable opprotunity will be given to address them. Therefore, we have requested to be informed about such queries so that it can respond to it." 22. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initely required a proper assessment by calling the petitioner for a personal hearing. Therefore, the impugned order seems to indicate that there is a procedural infraction. It has not complied with the requirements of instructions of the board in its clarification dated 11.07.2016 bearing reference F.No.225/162/2016/ITA.II. 25. Though the petitioner has not specifically requested for a personal hearing, the fact remains that where the books of accounts have to be examined for arriving at a proper conclusion, a personal hearing is mandatory. Under these circumstances, I am inclined to quash the impugned orders and the case is remit back to the respondent to pass an appropriate order preferably within a period of three months from the date of receipt of copy of this order. The impugned order which stands quashed shall now be treated as a show cause notice for the purpose of completing the assessment. The petitioner may file any reply or objection to it within a period of thirty days from the date of receipt of copy of this order. The petitioner shall upload relevant entries of the books of accounts that may be required for completing the assessment. The proceedings shall be conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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