Faceless assessment regime: draft assessment order need not be served on an ordinary assessee, and non-furnishing does not vitiate assessment.

Under the faceless assessment regime, an ordinary assessee is not entitled to service of the draft assessment order with the show cause notice under Section 144B of the Income-tax Act, 1961. The statutory scheme distinguishes an ordinary assessee from an eligible assessee: for an eligible assessee, the draft or final draft order accompanies the notice proposing variation, but for an ordinary assessee the draft order remains an internal document in the faceless process. Non-furnishing of that draft order to an ordinary assessee does not, by itself, breach natural justice or vitiate the assessment. The challenge on that ground failed.

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Issues: Whether, in respect of an ordinary assessee under the faceless assessment regime, the draft assessment order was required to be served along with the show cause notice under Section 144B of the Income-tax Act, 1961, and whether non-furnishing of that draft order vitiated the assessment.

Analysis: The statutory scheme draws a distinction between an eligible assessee and an ordinary assessee. For an eligible assessee, the draft or final draft assessment order is to accompany the show cause notice proposing variation. For an ordinary assessee, Section 144B(1)(xvi) does not impose such a requirement, and the draft assessment order functions only as an internal document within the faceless assessment process. The absence of service of the draft assessment order, therefore, does not amount to a violation of natural justice in the case of an ordinary assessee.

Conclusion: The requirement to furnish the draft assessment order did not apply to the assessee, and the assessment was not vitiated on that ground. The challenge failed, and the appeal was allowed.

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