Mandatory draft assessment notice under faceless assessment scheme; failure to issue it vitiates the assessment and permits writ relief.

Under the E-Assessment Scheme, 2019, a draft assessment order and notice of proposed variation were mandatory before finalising an adverse assessment, and non-issuance of that notice breached natural justice and vitiated the assessment. The court also held that a writ petition remained maintainable despite a protective statutory appeal where the challenge was to an order allegedly passed without jurisdiction and in breach of the prescribed procedure. The assessment order was set aside, with liberty to the Revenue to proceed afresh in accordance with law.

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Issues: (i) Whether, under the E-Assessment Scheme, 2019, issuance of a draft assessment order and opportunity to respond to the proposed variation was mandatory before finalising the assessment; (ii) whether the writ petition was maintainable despite the assessee having filed an appeal against the assessment order.

Issue (i): Whether, under the E-Assessment Scheme, 2019, issuance of a draft assessment order and opportunity to respond to the proposed variation was mandatory before finalising the assessment.

Analysis: The relevant scheme provisions required the assessment unit to prepare a draft assessment order and required the National E-Assessment Centre to issue notice where a variation prejudicial to the assessee was proposed. The absence of such notice deprived the assessee of an opportunity to object to the proposed variation. Such non-compliance amounted to a breach of natural justice and could not be cured merely because the scheme did not contain a provision identical to Section 144B(9) of the Income-tax Act, 1961.

Conclusion: The draft assessment procedure was mandatory, and the impugned assessment order was liable to be treated as void for violation of natural justice.

Issue (ii): Whether the writ petition was maintainable despite the assessee having filed an appeal against the assessment order.

Analysis: A statutory appeal filed only as a protective measure to avoid limitation did not bar writ jurisdiction where the challenge was to an order passed without jurisdiction and in breach of the prescribed procedure. The existence of an appellate remedy did not preclude judicial review in such circumstances.

Conclusion: The writ petition was maintainable.

Final Conclusion: The assessment order was set aside for failure to follow the mandatory faceless assessment procedure and for breach of natural justice, while leaving the Revenue free to proceed afresh in accordance with law.

Ratio Decidendi: Where the assessment scheme makes prior draft assessment and notice of proposed variation mandatory, non-issuance of such notice vitiates the assessment as a breach of natural justice, and the availability of an appellate remedy does not bar writ relief against an order passed without jurisdiction.

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