Delhi High Court Sets Aside Assessment Order Due To dysfunctional Income Tax E-Filing Portal

Delhi High Court Sets Aside Assessment Order Due To dysfunctional Income Tax E-Filing Portal

The Court also noted that the assessment order was passed without providing adequate opportunity to submit a reply to the show cause-cum-draft assessment order

The Delhi High Court has set aside an assessment order u/S 143(3) read with Section 144B of the Income Tax Act, 1961 of the National Faceless Assessment Centre due to narrow timeframe and for issues with regards to the new income tax e-filing portal.

A Division Bench of the High Court of Delhi, comprising Justices Manmohan and Navin Chawla, dealt with a matter titled Centum Finance Limited v National Faceless Assessment Centre & Anr.

The Petitioner – Company contended that the assessment order was passed without observing the principles of natural justice since the existing portal was discontinued from 1 June 2021 onwards to give taxpayers time to respond to the new system as a new income tax e-filing portal was recently launched. It was submitted by the Petitioner that the new income tax e-filing portal did not work after the launch and, therefore, compliance till 7 June 2021 could not be made.

The Respondent – Authorities sought time to obtain instructions. The Court, however, declined the request for adjournment.

The Court, primarily noted that the assessment order was passed without providing adequate opportunity to submit a reply in response to the show cause-cum-draft assessment order.

The Court further noted that the timeframe set out in the show cause notice was extremely narrow and found that the new e-filing portal was dysfunctional since it was recently launched.

Therefore, the Court set aside the assessment order and granted liberty to the Assessing Officer to continue the assessment proceedings from the stage at which they were positioned when the show cause notice was issued.