2022 (5) TMI 338 - HC - Income Tax

Validity of faceless assessment u/s 144B - Main thrust of learned counsel for petitioner at the time of submission of his case on merits is that non-following of the procedure prescribed under Section 144B will make the proceedings non-est - HELD THAT - The Ministry of Law and Justice (Legislative Department), New Delhi issued Gazette Notification dated 30.3.2022 wherein sub-section (9) of Section 144B of the Act of 1961 has been omitted w.e.f. 1.4.2021. By virtue of amendment brought in by the Legislature, the ground raised before this Court is not available as said provision itself stood omitted from the statute book with retrospective effect. Petitioner is having efficacious alternative statutory remedy of filing appeal before the appellate authority who can consider and decide other issues raised in this writ petition. We not inclined to entertain this writ petition as the petitioner is having efficacious alternate statutory remedy of appeal and it is accordingly dismissed. Petitioner may approach Appellate Authority under the Act of 1961 raising all grievances and grounds, as raised in this petition. If petitioner prefers an appeal within a period of thirty days from today, the Appellate Authority shall consider and decide the same on its own merits in accordance with law.

Summary

Issues:
Challenge to assessment order under Section 143 (3) of the Income Tax Act, 1961 based on non-compliance with the procedure under Section 144B of the Act.

Analysis:
The petitioner, a firm engaged in real estate and construction, challenged the assessment order passed under Section 143 (3) of the Income Tax Act, 1961. The petitioner sought various reliefs, including quashing the assessment order, demand notices, and penalty proceedings. The petitioner contended that the assessment proceedings were non-est due to non-compliance with the procedure prescribed under Section 144B of the Act. The petitioner highlighted that despite requesting a virtual hearing, the respondent department passed the assessment order without granting the opportunity, contrary to the provisions of Section 144B. The petitioner relied on various High Court orders to support its argument regarding the procedural irregularity.

The respondent argued that the assessment order was appealable under Sections 246A, 254, and 260A of the Act before the Commissioner of Income Tax (Appeals) and further appellate authorities. The respondent contended that the petitioner should have availed the statutory remedies before approaching the High Court directly. However, the respondent did not dispute the petitioner's claim of requesting a virtual hearing before the assessment order was passed.

In response to the objection on the maintainability of the writ petition, the petitioner argued that the non-compliance with Section 144B rendered the assessment proceedings non-est, making the writ petition maintainable. The Court considered the arguments presented by both parties and examined the records.

The Court noted that the Ministry of Law and Justice had omitted sub-section (9) of Section 144B of the Act with retrospective effect from 1.4.2021. As a result, the ground raised by the petitioner regarding non-compliance with Section 144B was no longer valid. The Court concluded that the petitioner had an alternative statutory remedy of filing an appeal before the appellate authority to address the issues raised in the writ petition. Therefore, the Court dismissed the writ petition, advising the petitioner to approach the Appellate Authority within thirty days for further consideration of the grievances and grounds raised in the petition.