TaxTMI 
TaxTMI 
2022 (4) TMI 1184
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....st of justice; (D)The Hon'ble Court may be pleased to quash and set aside demand notice u/s. 156 and initiation of penalty proceedings u/s. 270A, consequent to assessment order dated 07/04/2021." 2. The facts in brief giving rise to this writ application are summarized as under: 2.1 The writ applicant is a Cooperative Society registered under the Gujarat State Cooperative Societies Act, 1960. The writ applicant Society is engaged in the business of providing Credit facility to its members and collecting deposit from its members for the purpose of lending finance. The writ applicant society also make investments in Scheduled Bank and other Cooperative Bank. 2.2 The writ applicant Society is thus assessed as 'Association of Persons' and claimed to have filed return of income accordingly. The writ applicant had filed its return of income for annual A.Y. 2018-19 on 09.09.2018 declaring total income of Rs. 44,79,940/-. The assessee had claimed refund of Rs. 2,62,830/- in the return of of income. 2.3 The respondent had selected the case of the writ applicant for limited scrutiny vide notice dated 22.09.2019 under Section 143(2) of the Act. Thereafter, the respondent ....
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....ed on 07.04.2021. Thus, the Assessing Officer has completely overlooked the reply filed by the assessee and without following mandatory provisions of the Act, more particularly, Section 144B (1) (xiv) (xvi) (b) has proceeded to make variation by way of dis allowance to the prejudice of the writ applicant. He submitted that such action of respondent Authority is in gross violation of principles of natural justice as well as mandatory provisions of law and is required to be quashed and set aside. It is, therefore, submitted that the assessment order passed in violation of the mandatory provisions is nonest and is required to be quashed and set aside. 5. Mr. Gandhi, Learned advocate for the writ applicant in support of his submissions has relied upon following decisions: Sr. No. Cases 1. 127 Taxmann.com 606 YCD Industries Vs. NFAC 2. 127 Taxmann.com 726, Gurgaon Realtech Ltd. Vs. NFAC 3. 127 Taxmann.com 365, Globe Capital Foundation Vs. National EAssessment Centre 4. 127 Taxmann.com 339 Raja Builders Vs. NFAC 5. SCA No.6215 of 2021, Royal Lake City Vs. National EAssessment Centre. 6. SCA No.6042 of 2021, Jai Ma Hiral Enterprise Vs. Na....
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....ng Officer; or (c) has not furnished his return of income under subsection (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 assessee that assessment in his case shall be completed in accordance with the procedure laid down under this section; (iv) the National Faceless Assessment Centre shall assign the case selected for the purposes of faceless assessment under this section to a specific assessment unit in any one Regional Faceless Assessment Centre through an automated allocation system; (v) where a case is assigned to the assessment unit, it may make a request to the National Faceless Assessment Centre for- (a) obtaining such further information, documents or evidence from the assessee or any other person, as it may specify; (b) conducting of certain enquiry or verification by verification unit; and (c) seeking technical assistance from the technical unit; (vi) where a request for obtaining further information, documents or evidence from the assessee or any other person has been made by th....
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....) 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 writing, a draft assessment order to the best of its judgment, either accepting the income or sum payable by, or sum refundable to, the assessee as per his return or making variation to the said income or sum, and send a copy of such order to the National Faceless Assessment Centre; (xv) the assessment unit shall, while making draft assessment order, provide details of the penalty proceedings to be initiated therein, if any; (xvi) the National Faceless Assessment Centre shall examine the draft assessment order in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to- (a) finalise the assessment, in case no variation prejudicial to the interest of assessee is proposed, as per the draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if any, to the ass....
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....ce 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 final draft assessment order to such assessee; or (B) in any other case, finalise the assessment as per the draft assessment order or the final draft assessment order 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; (b) in any other case, send the response received from the assessee to the assessment unit; (xxiv) the assessment unit shall, after taking into account the response furnished by the assessee, make a revised draft assessment order and send it to the National Faceless Assessment Centre; (xxv) the National Faceless Assessment Centre shall, upon receiving the revised draft assessment order,- (a) in case the variations proposed in the revised ....
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....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, prepare a draft assessment order in accordance with sub-section (13) of section 144C and send a copy of such order to the National Faceless Assessment Centre; (xxxi) the National Faceless Assessment Centre shall, upon receipt of draft assessment order referred to in clause (xxx), finalise the assessment within the time allowed under subsection (13) 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; (xxxii) The National Faceless Assessment Centre shall, after completion of assessment, transfer all the electronic records of the case to the Assessing Officer havi....
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....he 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 arithmetical correctness of variations proposed, if any, and such other functions as may be required for the purposes of review. (4) The assessment unit, verification unit, technical unit and the review unit shall have the following authorities, namely: - (a) Additional Commissioner or Additional Director or Joint Commissioner or Joint Director, as the case may be; (b) Deputy Commissioner or Deputy Director or Assistant Commissioner or Assistant Director, or Income-tax Officer, as the case may be; (c) such other income-tax authority, ministerial staff, executive or consultant, as considered necessary by the Board. (5) All communication among the assessment unit, review unit, verification....
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....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; (vii) in a case where a variation is proposed in the draft assessment order or final draft assessment order or revised draft assessment order, and an opportunity is provided to the assessee by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the such draft or final draft or revised draft assessment order, the assessee or his authorised representative, as the case may be, may request for personal hearing so as to make his oral submissions or present his case before the income-tax authority in any unit; (viii) the Chief Commissioner or the Director General, in charge of t....
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.... person in 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 proviso to sub-section (6) shall apply; (h) circumstances in which personal hearing referred to clause (viii) shall be approved; (i) general administration and grievance redressal mechanism in the respective Centres and units. (8) Notwithstanding anything contained in sub-section (1) or sub-section (2), the Principal Chief Commissioner or the Principal Director General in charge of National Faceless Assessment Centre may at any stage of the assessment, if considered necessary, transfer the case to the Assessing Officer having jurisdiction over such case, with the prior approv....
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....ause (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 portal; (l) "electronic record" shall have the same meaning as assigned to it in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000); (m) "eligible assessee" shall have the same meaning as assigned to in clause (b) of sub-section (15) of section 144C; (n) "e-mail" or "electronic mail" and "electronic mail message" means a message or information created or transmitted or received on a computer, computer system, computer resource or communication device including attachments in text, image, audio, video and any other electronic record, which may be transmitted with the message; (o) "hash function" and "hash result" shall have the same meaning as assigned to them in the Explanation to subsection (2) of section 3 of the Information Technology Act, 2000 (21 of 2000); (p) "Mobile app" shall mean the application software of the Income-tax Department developed for mobile devices which is ....
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....gislation as regards principle of natural justice is embodied in section itself. Thus, after 1st April, 2021, mandatory procedure in the form of aforesaid provision has to be strictly adhered while doing assessment. The whole object of Legislation to introduce Faceless Assessment Scheme is to imparting greater efficiency, transparency and accountability and at the same time duty is cast upon Assessing Officer to comply with mandatory provision to pass objective, fair and just orders. 9. It is clear from bare reading of Section 144B of the act that the assessee is required to be given an opportunity, in case variation is proposed in the draft assessment order upon its examination by NFAC and is prejudicial to the interest of assessee. The obligation is on the assessing officer to serve a show cause notice calling upon him to show cause as to why the proposed variation should not be made, failing which would make the assessment nonest. This Court agrees with the submission of the learned advocate for writ applicant that the issue on hand is no more res integra. We get support from the decision of this Court in the case of Gandhi Reality ( India) (p.)(ltd.) Vs. Assistant, reported ....