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TMI Blog2022 (4) TMI 1390X X X X Extracts X X X X X X X X Extracts X X X X ..... rtake denovo proceedings in accordance with the provisions of Section 144B of the Act, 1961. The respondent shall issue a fresh Notice cum draft assessment order and the writ applicant upon receipt of the same, shall file its response in accordance with law. - R/SPECIAL CIVIL APPLICATION NO. 7370 of 2021 - - - Dated:- 29-3-2022 - HONOURABLE MR. JUSTICE J.B. PARDIWALA AND HONOURABLE MS. JUSTICE NISHA M. THAKORE Appearance: Ms Vaibhavi K Parikh (3238) for the Petitioner(s) No. 1 for the Respondent(s) No. 1 Mrs Kalpanak Raval (1046) for the Respondent(s) No. 1 (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs: (a) quash and set aside the impugned Assessment Order dated 20.04.2021 and demand Notice dated 20.04.2021 for the Assessment Year 2018-19 at ANNEXURE A (Colly.) to this petition; (b) pending the admission, hearing and final disposal of this petition, to stay the implementation and operation of the Assessment Order dated 20.04.2021 and demand Notice dated 20.04.2021 for the Assessment Year 2018-19 at ANNEXURE A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order was served upon the writ applicant in accordance with the provisions of Section 144B of the Act, 1961 prior to passing of the impugned assessment order. According to Mr. Hemani, on the aforesaid short ground alone, the impugned assessment order deserves to be quashed and set aside and the matter may be remitted for fresh consideration after giving due opportunity of hearing to the writ applicant. 5. On the other hand, this writ application has been vehemently opposed by Mrs. Raval, the learned Senior Standing Counsel appearing for the Revenue. Mrs. Raval, has raised a preliminary objection as regards the very maintainability of the present writ application on the ground that the writ applicant has an alternative remedy of statutory appeal for the purpose of questioning the legality and validity of the impugned assessment order. According to Mrs. Raval, on the short ground alone, this writ application may not be entertained. 6. Mrs. Raval, further invited the attention of this Court to few averments made in the affidavit-in-reply filed on behalf of the Revenue more particularly, the averments made in paragraph 7. We quote the relevant averments. 7. With resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials on record, the only question that falls for our consideration is whether the respondent committed any error in passing the impugned order? 10. It is not in dispute more particularly, having regard to the averments made in paragraph 10 of the reply filed on behalf of the Revenue, that the draft assessment order was not served upon the writ applicant. In the case of Gandhi Realty (India) Private Limited (Supra), a Co-ordinate Bench of this Court had the occasion to consider almost an identical matter wherein there was a preliminary contention raised as regards the maintainability of the writ application on the ground that there is an alternative remedy of statutory appeal available to the assessee and the second issue was with regard to the violation of the principles of natural justice in context with the draft assessment order not being served on the assessee. Both the aforesaid issues came to be considered by the Co-ordinate Bench as under: 7. Having heard both the sides and also having extensively examined the material on record, we specifically considered the challenge to the very maintainability of the petition under Article 226 of the Constitution of India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. (See Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 11 .) The present case attracts applicability of the first two contingencies. Moreover, as noted, the appellants' dealership, which is their bread and butter, came to be terminated for an irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings. (emphasis supplied) 28. The principles of law which emerge are that: (i) The power under Article 226 of the Constitution to issue writs can be exercised not only for the enforcement of fundamental rights, but for any other purpose as well; (ii) The High Court has the discretion not to entertain a writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (3) of section 143 or under section 144, in the cases referred to in sub-section (2), shall be made in a faceless manner as per the following procedure, namely: i) the National Faceless Assessment Centre shall serve assessee under sub-section (2) of section 143; a notice on the ii) the assessee may, within fifteen days from the date of receipt of notice referred to in clause (i), file his response to the National Faceless Assessment Centre; (iii) where the assessee- (a) has furnished his return of income undersection 139 or in response to a notice issued under sub-section (1) of section 142 or under sub-section (1) of section 148, and a notice under sub-section (2) of section 143 has been issued by the Assessing Officer or the prescribed income-tax authority, as the case may be; or (b) has not furnished his return of income in response to a notice issued under sub-section (1) of section 142 by the Assessing Officer; or (c) has not furnished his return of income under sub-section (1) of section 148 and a notice under sub-section (1) of section 142 has been issued by the Assessing Officer, the National Faceless Assessment Centre shall intimate the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a direction issued under sub-section (2A) of section 142, the National Faceless Assessment Centre shall serve upon such assessee a notice under section 144 giving him an opportunity to show-cause, on a date and time to be specified in the notice, why the assessment in his case should not be completed to the best of its judgment; (xii) the assessee shall, within the time specified in the notice referred to in clause (xi) or such time as may be extended on the basis of an application in this regard, file his response to t to the National Faceless Assessment Centre; (xiii) where the assessee fails to file response to the notice referred to in clause (xi) within the time specified therein or within the extended time, if any, the National Faceless Assessment Centre shall intimate such failure to the assessment unit; (xiv) the assessment unit shall, after taking into account all the relevant material available on the record make in writing, a draft assessment order or, in a case where intimation referred to in clause (xiii) is received from the National Faceless Assessment Centre, make in a writing a draft assessment order to the best of its judgment, either accepting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the variation ssuggested by the review unit, send the final draft assessment order to the National Faceless Assessment Centre; (xxi) the National Faceless Assessment Centre shall, upon receiving final draft assessment order follow the procedure laid down in- (a) sub-clause (a) of clause (xvi); or (b) sub-clause (b) of clause (xvi); (xxii) the assessee may, in a case where show-cause notice has been served upon him as per the procedure laid down in subclause (b) of clause (xvi), furnish his response to the National Faceless Assessment Centre on or before the date and time specified in the notice or within the extended time, if any; (xxiii) the National Faceless Assessment Centre shall- (a) where no response to the show-cause notice is received as per clause (xxii),- (A) in a case where the draft assessment order or the final draft assessment order is in respect of an eligible assessee and proposes to make any variation which is prejudicial to the interest of said assessee, forward the draft assessment order or e final draft assessment order to such assessee; or (B) in any other case, finalise the assessment as per the draft assessment order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee shall, within the period specified in sub-section (2) of section 144C, file his acceptance of the variations to the National Faceless Assessment Centre; (xxviii) the National Faceless Assessment Centre shall, (a) upon receipt of acceptance as per clause (xxvii); or (b) if no objections are received from the eligible assessee within the period specified in sub-section (2) of section 144C, finalise the assessment within the time allowed under subsection (4) of section 144C and serve a copy of such order and notice for initiating penalty proceedings, if any, to the assessee, alongwith the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment; (xxix) where the eligible assessee files his objections with the Dispute Resolution Panel, the National Faceless Assessment Centre shall upon receipt of the directions issued by the Dispute Resolution Panel under sub-section (5) of section 144C, forward such directions to the concerned assessment unit; (xxx) the assessment unit shall in conformity of the directions issued by the Dispute Resolution Panel under sub-section (5) of section 144C, pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s enquiry, cross verification, examination of books of account, examination of witnesses and recording of statements, and such other functions as may be required for the purposes of verification; (v) technical units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform the function of providing technical assistance which includes any assistance or advice on legal, accounting, forensic, information technology, valuation, transfer pricing, data analytics, management or any other technical matter which may be required in a particular case or a class of cases, under this section; and (vi) review units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform the function of review of the draft assessment order, which includes checking whether the relevant and material evidence has been brought on record, whether the relevant points of fact and law have been duly incorporated in the draft order, whether the issues on which addition or disallowance should be made have been discussed in the draft order, whether the applicable judicial decisions have been considered and dealt with in the draft order, checking for arith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) uploading an authenticated copy on the assessee's Mobile App, and followed by a real time alert; (iii) every notice or order or any other electronic communication shall be delivered to the addressee, being any other person, by sending an authenticated copy thereof to the registered email address of such person, followed by a real time alert; (iv) the assessee shall file his response to any notice or order or any other electronic communication, through his registered account, and once an acknowledgement is sent by the National Faceless Assessment Centre containing the hash result generated upon successful submission of response, the response shall be deemed to be authenticated; (v) the time and place of dispatch and receipt of electronic record shall be determined in accordance with the provisions of section 13 of the Information Technology Act, 2000 (21 of 2000); (vi) a person shall not be required to appear either personally or through authorised representative in connection with any proceedings before the income-tax authority at the National Faceless Assessment Centre or Regional Faceless Assessment Centre or any unit set up under this sub-section; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his end; (xii) the Principal Chief Commissioner or the Principal Director General or charge of the National Faceless Assessment Centre shall, with the prior approval of the Board, lay down the standards, procedures and pro cesses for effective functioning of the National Faceless Assessment Centre, Regional Faceless Assessment Centres and the unit set up, in an automated and mechanised environment, including format, mode procedure and processes in respect of the following, namely: (a) service of the notice, order (b) receipt of any information or documents from the person in or any other communication; response to the notice, order or any other communication, (c) issue of acknowledgement of the response furnished by the person; (d) provision of 'e-proceeding facility including login account facility, tracking status of assessment, display of relevant details, and facility of download, (e) accessing, verification and authentication of information and response including documents submitted during the assessment proceedings; (f) receipt, storage and retrieval of information or documents in a centralised manner; (g) circumstances in which pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Information Technology Act, 2000 (21 of 2000); (f) computer system shall have the same meaning as assigned to it in clause (1) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000); (g) computer resource of assessee shall include assessee's registered account in designated portal of the Income-tax Department, the Mobile App linked to the registered mobile number of the assessee, or the registered e-mail address of the assessee with his email service provider, (h) digital signature shall have the same meaning as assigned to it in clause (p) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000); (i) designated portal means the web portal designated as such by the Principal Chief Commissioner or the Principal Director General in charge of the National Faceless Assessment Centre; (j) Dispute Resolution Panel shall have the same meaning as assigned to it in clause (a) of sub-section (15) of section 144C; (k) faceless assessment means the assessment proceedings conducted electronically in 'e-Proceeding' facility through assessee's registered account in designated porta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company as available on the official website of Ministry of Corporate Affairs; (vi) any e-mail address made available by the addressee to the income tax authority or any person authorised by such authority; (u) registered mobile number of the assessee means the mobile number of the assessee, or his authorised representative, appearing in the user profile of the electronic filing account registered by the assessee in designated portal; (v) video conferencing or video telephony means the technological solutions for the reception and transmission of audio-video signals by users at different locations, for communication between people in real-time.] 7.05. It is pertinent to note that this introduction of faceless assessment under Section 144B has revolutionised the very regime of assessment in very many ways and at the same time, there are bound to be certain hiccups while implementing and creases also to be ironed out at the level of department. For the officials and assessee also, acceptance of change, its comprehension and implementation in true purport is a challenge as well. 7.06. Various issues arise in relation to the implementation of this pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be done by furnishing Draft Assessment Order along with show cause notice. It is in other words, statutory obligation of the NFAC to serve upon the assessee the show cause notice along with the draft assessment order for the assessee to be availed the opportunity with regard to the variation proposed. It goes without saying that calling upon the assessee as provided under clause (v) or (vi) or (viii) and availing opportunity thereunder or its failure to utilise such opportunity or its failure to response would not permit NFAC or any authority to finalize the assessment once there is a variation proposed, prejudicial to the interest of the assessee. 7.11. With the advent of technology and with resorting to virtual mode, more meticulous conduct is expected from all concerned. Technology has made it extremely easy the aspect of service of notice, order, draft order etc. and here in Faceless Regime, placing in assaessee s registered account, sending to the e-mail or uploading in mobile APP, is a due service which can never be missed and its trail is easily found, therefore, service or non-service also is no longer an issue and the time and place of dispatch and receipt of ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed without jurisdiction, then, notwithstanding the fact that an appeal was filed, albeit, only to ensure that the limitation is not crossed, is not an impediment in proceeding ahead with the matter. In this particular case, the reason that we are proceeding ahead with the matter, is that, we are persuaded by the arguments advanced by Mr. Vohra that the impugned assessment order dated 15.04.2021 could not have been passed under Section 143(3A) and 143(3B) after March 31, 2021, having regard to the provisions of Section 143(3D) of the Act. For the sake of convenience. the said provisions are extracted below: Section 143. Assessment XXX XXX (3A) The Central Government may make a scheme, by notification in the Official Gazene, for the purposes of making assessment of total income or loss of the assesser under sub-section (3) so as to impart greater efficiency, transparency and accountability by (a) climinating the interface between the Assessing Officer and the assessee in the course of proceedings to the extent technologically feasible: (b) opumising utilisation of the resources through economics of scale and functional specialisation (c) intro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o longer res integra as a Coordinate Bench of this Court in Gurgaon Realtech Limited v. National Faceless Assessment Centre Delhi, W.P. (C) 5849/2021 has held that the Assessment Order could not have been passed under Section 143(3A) and 143(3B) of the Act by the Revenue after 31st March, 2021 having regard to Section 143(3D) of the Act. 13. This Court also agrees with the submissions of the learned counsel of the Petitioner that there was failure on the part of the Respondents to comply with the mandatory obligation laid down in Section 144B (1) (xvi) of the Act inasmuch as there was non-service of prior notice and draft assessment order. The relevant portions of Section 144B xvi (a) and (b) as well as Section 144B(9) of the Act are reproduced hereinbelow: 144B. (1) Notwithstanding anything to the contrary contained in any other provisions of this Act, the assessment under sub section (3) of section 143 or under section 144, in the cases referred to in sub-section (2), shall be made in a faceless manner as per the following procedure, namely: (xvi) the National Faceless Assessment Centre shall examine the draft assessment order in accordance with the risk management s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was also informed on 15.10.2020 about transfer of proceedings to the NFAC and notice was also issued to the assessee by the Regional Reassessment Centre on 04.01.2021 u/s. 142(1) of the Act. Notice of NFAC to the petitioner was issued on 03.02.2021 under section 142(1) of the Act. 12. It appears from the assessment order which is claimed to have been placed for transfer on 08.04.2021 and averred to have been served upon the assessee under the communication dated 12.04.2021, is missing on the Web Portal of the Income Tax Department. Assessment order issued u/s 144B of the Act on 20.04.2021 along with the Demand Notice have been served upon the petitioner. Barring the Draft Assessment Order, rest of all the documents are already found on the web portal of the respondent department. 13. It would be apt to refer to sub-sections (5) and (6) of section 144B, which provide that all communications among the assessment unit, review unit, verification unit or technical unit or with the assessee or any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making a faceless assessment shall be throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment order is to be made which is likely to be prejudicial to the interest of the assessee. NFAC if would have served upon the assessee the draft assessment order, its presence on web portal would invariably there. In virtual regime, noticing of or presence or absence of trail of action is not a herculian task. Thus, in absence of any proof, the version of the respondent simply cannot be accepted. We could further notice from the documents which have been furnished by the petitioner that authenticated copy of notice/ order is not served to the petitioner when otherwise all other documents on the web portal of the income tax department are existing. We have sought assistance from the learned advocate of both the sides to point out to us due service of the draft assessment order, as has been claimed by the respondent, however, the said order dated 12.04.21 has been duly served to the petitioner, show cause notice which is claimed to have been issued along with the draft assessment order are surely missing. This being a simple case of statutory noncompliance of the provision, the same would amount to breach of not only principles of natural justice, but also, of the action in com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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