Faceless assessment order set aside as time frame provided to assessee was too short to respond to Show Cause Notice (SCN)

Any notice requiring the taxpayer to comply with certain requirement or submission has to follow the normal principle of natural justice.

Non compliance to the principle of natural justice could even result in quashing of the proceeding.

Here is one such case where the validity of the show cause notice was challenged on the principle of Natural justice. The same is as under:

Lamba Techno Flooring Solutions (P.) Ltd v. National Faceless Assessment Centre – [2021] 131 taxmann.com 172 (Delhi)

Short Overview of the case:

A show-cause notice-cum-draft assessment order was issued to the assessee and granted it barely two days to respond to the same.

The assessee requested the grant of further time on account of the prevalence of the pandemic in the city.

It also submitted that its Chartered Accountant and his family had been afflicted with coronavirus during the relevant period.

Therefore, the timeline given for filing the response could not be adhered to.

However, revenue did not respond to the request made by the assessee and proceeded to pass the final assessment order.

Aggrieved-assessee filed the instant appeal before the Delhi High Court.

The Delhi High Court held that the time frame provided to respond to the show cause notice-cum-draft assessment order was far too short, considering that the pandemic was raging in the city at that juncture.

Therefore, as prayed, the assessment order and consequential notices were set aside with liberty to pass a fresh assessment order and consequential orders after considering the reply filed by the assessee.

Revenue, before passing the fresh assessment order, will accord a personal hearing to the authorized representative of the assessee.

 For this purpose, revenue will take recourse to the video conferencing mechanism