TaxTMI 
TaxTMI 
2022 (10) TMI 422
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....ommon order. The provisions of Section 144B were inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, with effect from 01.04.2021 and set out the procedure for framing of assessments on and after 01.04.2021. 2. The scheme of assessment under Section 144B requires the entire process of assessment to be faceless, that is, though the assessment will be conducted by an officer of the Department, the identity of the officer is not revealed. The need or necessity for an interaction with an identified officer of the Department has been done away with. 3. The common violation committed by the respondents in these matters is that, in all the cases comprised in this batch, final orders of assessment in terms of Section 144B have been passed without being preceded by a show cause notice (SCN)/draft order of assessment (DOA). 4.The facts germane to each writ petition are adverted to briefly below: W.P.Nos.16373 of 2021 and 14417 of 2022 : 5.These writ petitions have been filed by P.T.LeeChengalvaraya Naicker Trust, a public charitable Trust created under the Will of Late P.T.Chengalvaraya Naicker, dated 04.10.1870. The Trust is stated to be i....
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.... would be completed under the Faceless Assessment Scheme, 2019. 12. The deliberations in regard to the issues that arose from the return of income continued, the parties being in correspondence with each other. While this is so, a show cause notice was issued by the respondent on 09.04.2021 calling for a response by 12.04.2021. The petitioner claims that a request was made on 13.04.2021 conveying to the respondent that its Finance Controller had been diagnosed with Covid-19 and hence, seeking an adjournment. 13. According to the petitioner, it was afforded only one working day to respond to the notice as 10th and 11th happened to be a weekend. The petitioner claims to have filed its reply to the show cause notice on 19.04.2021 at 11.04 hours. However, an order of assessment has come to be served on the petitioner on 19.04.2021 at 21.50 hours. The request of the petitioner for an adjournment, though filed online on the e-filing platform, does not appear to have been dealt with. 14. This matter does not link to the present batch since admittedly, show cause notice has been issued prior to the finalisation of assessment and thus, the only issue that is agitated is whether, there ha....
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.... the petitioner. This culminated in the impugned order of final assessment, wherein the claim of depreciation by the petitioner was rejected by application of provisions of Section 11(6) of the Act. In this matter as well, no DAO/SCN has been issued prior to passing of the final assessment order. Hence, this writ petition. W.P.No.12696 of 2021 : 22. The petitioner is engaged in the operation and maintenance of power generating plants. In respect of AY 2018-19, a return was filed that was processed by the Central Processing Unit (CPC) by issue of an intimation under Section 143(1) on 15.11.2019. The petitioner made an application for rectification of mistakes under Section 154 of the Act on 10.12.2019 and the CPC had responded stating that the right of rectification had been transferred to the Assessing Authority. 23. The petitioner states that it has approached the Assessing Authority for rectification relying on a revised audit report and the said application is still pending before the Assessing Officer. While this is so, the return was taken up for scrutiny and notices and questionnaires were issued by the Assessing Officer. 24. The petitioner had responded on 04.10.2019, 02....
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....tation, other relevant documents and the submissions by the petitioner, an order came to be passed by the TPO under Section 92CA of the Act holding the international transactions to be at Arms' Length. 31. Thereafter, the Assessing Officer/R1 resumed proceedings for assessment and called for various particulars vide notice dated 01.08.2019 including specifically, details of increase in share capital. The petitioner responded on 12.03.2021, admittedly delayed on account of the pandemic, setting out its response to the notice enclosing and specifically addressing the issue of increase in share capital. 32. This has come to be followed by the impugned assessment order dated 23.04.2021 making an addition under Section 56(2)(viib) of the Act. 33. In this matter as well, the Assessing Officer has not issued a DAO prior to the passing of the impugned assessment order. W.P. No.12845 of 2021 : 34.The petitioner is engaged in the manufacture of automotive components for two, three and four wheelers and states that it is a regular assessee under the provisions of the Act. The impugned assessment relates to AY 2018-19, for which, a return was filed within time. The assessment was picked u....
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.... respondent had been in communication with each other for the ongoing scrutiny proceedings. 42. According to the petitioner, despite furnishing of all details as sought for by the officer, the impugned order of assessment has come to be passed on 03.03.2021 without being preceded either by a SCN or a DAO. She thus, alleges violation of procedure under Section 144 of the Act and Notifications 60/2020 and 61/2020. She also alleges that she was not heard prior to passing of the order. 43. In counter, the authorities defend the impugned order urging the Court to relegate the petitioner to alternate remedy. The respondents state that the grant of personal hearing is not mandatory under the scheme of the Act. As in other writ petitions, there is no response in regard to the procedure under the e-assessment scheme relating to issuance of SCN/DAO. W.P.No.10687 of 2021 : 44. The petitioner is engaged in the business of structural glazing and wall cladding works and states that it is a regular assessee to Income tax. The challenge is to a final order of assessment dated 27.03.2021 passed, allegedly in violation of the procedures set out for Faceless assessment. 45. Pursuant to a return ....
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....axmann.com 424 Madras], the Hon'ble Supreme Court and this Court respectively considered the veracity of assessments where no statutory notice under Section 143(2) had been issued. 52.This Court, in the case of The Asst. Commissioner of Income Tax, Media Circle II and Ors. v. Vijay Television Private Ltd. And Ors. (W.A.Nos.1327 to 1329 of 2014 dated 23.04.2018) had set aside an assessment under Section 144C for want of a draft assessment order preceding the impugned assessment. The result was in favour of the assessee, the Courts holding that the absence of a statutory notice under Section 143(2) and DAO under Section 144C, would invalidate the assessments. They also rely upon the decision of the Bombay High Court in the case of Mantra Industries Ltd. v. National Faceless Assessment Centre [2021 131 taxmann.com 165 Bombay]. The petitioners, in one voice, thus pray that the impugned orders be quashed and the writ petitions allowed. 53. The respondents accede to the fact that no SCN/DAO was passed in the present cases. However, they defend the impugned orders stating that the omission to issue a DAO/SCN is only a technical violation and one that is curable. Their request is tha....
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...., after sub-section (3), enabling the Central Government to prescribe the aforementioned new scheme for scrutiny assessments, by way of notification in the Official Gazette. It is further proposed to insert sub-section (3B) in the said section, enabling the Central Government to direct, by notification in the Official Gazette, that any of the provisions of this Act relating to assessment shall not apply, or shall apply with such exceptions, modifications and adaptations as may be specified therein. However, no such direction shall be issued after the 31st March 2020. It is also proposed to insert sub-section (3C) in the said section, to provide that every notification issued under the subsection (3A) and sub-section (3B), shall be laid before each House of Parliament, as soon as may be. These amendments will take effect from 1st April, 2018. 57. The Scheme provides for the finalization of an assessment by the National Faceless Assessment Centre (NFAC), an umbrella unit, the Regional Assessment Unit, and the assessee concerned. 58. After the initial exchange of show cause notices and responses, the Assessment Unit is to prepare and forward a draft order proposing variations,....
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....nd initiate penalty proceedings, if any, and send it to the National Faceless Assessment Centre; (xxiii) upon receiving the final assessment order as per clause (xxii), the National Faceless Assessment Centre shall serve a copy of such order and notice for initiating penalty proceedings, if any, on the assessee, along with the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment; (xxiv) where a draft order is served on the assessee as referred to in clause (xxi), such assessee shall,- (a) file his acceptance of the variations proposed in such draft order to the National Faceless Assessment Centre; or (b) file his objections, if any, to such variations, with- (I) the Dispute Resolution Panel, and (II) the National Faceless Assessment Centre, within the period specified in sub-section (2) of section 144C; (xxv) the National Faceless Assessment Centre shall,- (a) upon receipt of acceptance from the eligible assessee; or (b) if no objections are received from the eligible assessee, within the period specified in sub-section (2) of section 144C, intimate the assessment unit to complete the assessme....
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....the assessments de novo, in accordance with law. I find overwhelming support from the following cases wherein the failure to issue a SCN/DAO has been construed as a procedural irregularity. Bombay High Court (i) Golden Tobacco Ltd. Vs. National Faceless Assessment Centre [2021 (132) taxmann.com 296 (Bombay)] (ii) Trendsutra Client Services (P.) Ltd. Vs. Assistant Commissioner of Income Tax [2021 (132) taxmann.com 104 (Bombay)] (iii) Piramal Enterprises Ltd. Vs Additional/Joint/Deputy/Assistnat Commissioner of Income Tax/Income Tax Officer [2021 (129) taxmann.com 18 (Bombay)] Delhi High Court (i) Pardesi Developers (P.) Ltd. Vs. National Faceless Assessment Centre [2021 (131) taxmann.com 246 (Delhi)] (ii) Akashganga Infraventures India Ltd. Vs. National Faceless Assessment Centre, Delhi [2021 (130) taxmann.com 401 (Delhi)] (iii) Pooja Singla Builders and Engineers (P.) Ltd. Vs. National Faceless Assessment Centre [2021 (132) taxmann.com 7 (Delhi)] (iv) YCD Industries Vs. National Faceless Assessment Centre, Delhi [2021 (127) taxmann.com 606 (Delhi)], Anju Jalaj Batra Vs. National E-Assessment Centre [2021 (128) taxmann.com 165 (Delhi)] (v) DJ Surfactants Vs. Nation....