Faceless assessment procedure and limitation under income-tax law upheld; ordinary assessee could not insist on draft order service.

Faceless assessment under the Income-tax Act was examined on limitation, draft assessment procedure, and writ maintainability. The assessment for AY 2020-21 was held within the extended time under section 153 because the Finance Act, 2022 amendment extended the period up to 30.09.2022 and the order was passed on 28.09.2022. An ordinary assessee, not shown to be an eligible assessee under section 144C(15)(b), could not insist on service of a draft assessment order under section 144B; the show-cause notice proposing variations was sufficient. No denial of hearing was shown, and the court noted that the assessment and rectification orders were fit for statutory appeal rather than writ interference.

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Issues: (i) Whether the assessment order was barred by limitation under section 153 of the Income-tax Act, 1961; (ii) whether the assessee, not being an eligible assessee under section 144C(15)(b), was entitled to service of a draft assessment order before finalisation under section 144B of the Income-tax Act, 1961; (iii) whether the assessment proceedings were vitiated for denial of personal hearing or for want of interference in writ jurisdiction despite availability of statutory appeal.

Issue (i): Whether the assessment order was barred by limitation under section 153 of the Income-tax Act, 1961.

Analysis: The relevant assessment year was 2020-21. By the amendment made by the Finance Act, 2022, the second proviso to section 153(1) was substituted and the time for passing the assessment order under section 143(3) for that assessment year stood extended up to 30.09.2022. The assessment order was passed on 28.09.2022 and therefore fell within the extended period.

Conclusion: The challenge based on limitation failed and the assessment was held to be within time.

Issue (ii): Whether the assessee, not being an eligible assessee under section 144C(15)(b), was entitled to service of a draft assessment order before finalisation under section 144B of the Income-tax Act, 1961.

Analysis: The faceless assessment procedure under section 144B draws a distinction between an eligible assessee and an ordinary assessee. The obligation to serve a draft assessment order arises only where the statute so provides for an eligible assessee. In the case of an ordinary assessee, the show-cause notice proposing variation satisfies the statutory requirement, and the draft assessment order is only an internal step. The petitioner did not establish that it was an eligible assessee, and the show-cause notice disclosed the proposed variations and invited objections.

Conclusion: No statutory right to receive a draft assessment order was made out, and this ground was rejected.

Issue (iii): Whether the assessment proceedings were vitiated for denial of personal hearing or for want of interference in writ jurisdiction despite availability of statutory appeal.

Analysis: The show-cause notice informed the petitioner that a request for personal hearing through video conferencing could be made, but no such request was made. The challenge to the assessment also involved factual s regarding production and consideration of documents, which are matters for the appellate authority. The impugned assessment and rectification orders were amenable to statutory appeal, and no exceptional ground was shown to bypass that remedy.

Conclusion: There was no violation of the right to hearing warranting writ interference, and the court declined to examine the merits of the assessment in writ jurisdiction.

Final Conclusion: The writ petitions failed on all substantial grounds, and the assessee was relegated to the statutory appellate remedy, with exclusion of the specified period for limitation purposes.

Ratio Decidendi: Under faceless assessment, a draft assessment order is required only in cases where the statute specifically mandates it for an eligible assessee; an ordinary assessee cannot insist on such service merely because variations are proposed.

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