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2024 (1) TMI 117
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.... 1961 and the Demand Notice under Section 156 dated 30/03/2022, annexed hereto at Annexure - 'H colly.' (B) Pending admission, hearing and disposal of this petition, ad-interim relief be granted and the Respondent be ordered to restrain from enforcing compliance of the impugned Assessment order under Section 147 read with Section 144B of the Income Tax Act, 18961 and the Demand Notice under Section 156 dated 30.03.2022, annexed hereto at Annexure - 'H colly.'" 3. Brief facts in nutshell are reproduced as under: 3.1 The writ applicant claims to be paying regular income tax return and is subjected to such assessment of income by the Income Tax Office at Ahmedabad. According to the writ applicant, the return of income for the A.Y. 2016-17 was filed on 22.07.2016, however, on 30.03.2021, the writ applicant had received a notice under Section 148 of the Income Tax Act. On 06.07.2021, the writ applicant was served with a copy of reasons recorded, thereby pointing out the significant transactions noticed by the Income Tax Department entered into by the assessee. It was further mentioned that on perusal of the details available on record, the assessee had undertaken financia....
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.... by the respondent authorities. In such circumstances, the writ applicant had directly approached this Court in writ jurisdiction praying for quashing and setting aside the aforesaid final order as well as demand notice dated 30.03.2022 raised by the respondent Department. 4. Considering the averments made in the writ petition, this Court by order dated 19.04.2022, had issued Notice upon the respondent authorities and by ad interim order had restricted the respondent authorities from enforcing the compliance of the impugned assessment order under Section 147 read with Section 144B of the Act and the demand notice dated 30.03.20922 under Section 156 of the Act. 5. We have heard Mr. Darshan Patel, learned advocate, who has appeared on behalf of the writ applicant and Mr. Varun Patel, learned advocate on panel of the respondent Department. 6. Learned advocate for the writ applicant at the outset, has invited attention of this Court to the aforesaid facts of the case and has submitted that the respondent authorities have failed to comply with the mandatory procedure laid down under Section 144B of the Act. By referring to the aforesaid provisions, the learned advocate has subm....
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.... Civil Application No. 7541 of 2021). 8. Learned advocate Mr. Varun Patel for the respondent authorities has referred to the affidavit in reply filed by Mr. Manish H. Dafda, Income Tax Officer - Ward 1(3)(1), Ahmedabad to submit that from the perusal of the order-sheet of ITBA, it appears that the assessment order was passed without serving draft order upon the writ applicant. He, therefore, urged this Court to pass the appropriate order. 9. Having heard the learned advocates appearing for the respective parties and having perused the record, indisputably, the aspect of non-service of draft assessment order, which was otherwise required to be sent along with show cause notice as per the procedure prescribed under Section 144B(1), clause (xvi)(b) of the Income Tax Act has been confirmed. The compliance of mandatory procedure as envisaged in the aforesaid provision ie. of issuance of show cause notice, the draft assessment order, the final assessment order and the consequential demand notice is no more res integra. The plain reading of the provisions of Section 144B of the Act, which provides for Faceless Assessment for determination to be carried out under Sections 143(3) and ....
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....location 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 the assessment unit, the National Faceless Assessment Centre shall issue appropriate notice or requisition to the assessee or any other person for obtaining the information, documents or evidence requisitioned by the assessment unit; (vii) the assessee or any other person, as the case may be, shall file his response to the notice referred to in clause (vi), within the time specified therein or such time as may be extended on the basis of an application in this regard, to the National Faceless Assessment Centre; (viii) where a request for conducting of certain enquiry or verification by the verification ....
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.... 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 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; or (b) provide an opportunity to the assessee, in case any variation prejudicial to the interest of assessee is proposed, by serving a notice calling upon him to show cause as to why the proposed variation should not be made; or (c) assign the draft assessment order to a review unit in any one Regional Faceless Assessment Centre, through an automated allocation system, for conducting review of such order; (xvii) the review unit shall conduct review of the d....
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.... 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 draft assessment order are not prejudicial to the interest of the assessee in comparison to the draft assessment order or the final draft assessment order, and- (A) in case the revised draft assessment order is in respect of an eligible assessee and there is any variation prejudicial to the interest of the assessee proposed in draft assessment order or the final draft assessment order, forward the said revised draft assessment order to such assessee; (B) in any other case, finalise the assessment as per the revised draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if ....
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....eipt 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 having jurisdiction over the said case for such action as may be required under the Act. (2) The faceless assessment under sub-section (1) shall be made in respect of such territorial area, or persons or class of persons, or incomes or class of incomes, or cases or class of cases, as may be specified by the Board. (3) The Board may, for the purposes of faceless assessment, set up the following Centres and units and specify their respective jurisdiction, namely:- (i) a National Faceless Assessment Centre to facilitate the conduct of faceless assessment proceedings in a centralised manner, which shall be vested ....
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.... 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 unit or technical unit or with the assessee or any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making a faceless assessment shall be through the National Faceless Assessment Centre. (6) All communications between the National Faceless Assessment Centre and the assessee, or his authorised representative, or any other person shall be exchanged exclusively by electronic mode; and all internal communications between the National Faceless Assessment Centre, Regional Faceless Assessment Centres and various units shall be exchanged ex....
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....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 the Regional Faceless Assessment Centre, under which the concerned unit is set up, may approve the request for personal hearing referred to in clause (vii) if he is of the opinion that the request is covered by the circumstances referred to in sub-clause (h) of clause (xii); (ix) where the request for personal hearing has been approved by the Chief Commissioner or the Director General, in charge of the Regional Faceless Assessment Centre, such hearing shall be conducted exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video confere....
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....l 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 approval of the Board. (9) Notwithstanding anything contained in any other provision of this Act, assessment made under sub-section (3) of section 143 or under section 144 in the cases referred to in sub-section (2) (other than the cases transferred under sub-section (8), on or after the 1st day of April, 2021), shall be non-est if such assessment is not made in accordance with the procedure laid down under this section. Explanation.-In this section, unless the context otherwise requires- (a) "addressee" shall have the same meaning as assigned to it in clause (b) of sub-section (1) of section 2....
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....r 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 downloaded and installed on the registered mobile number of the assessee; (q) "originator" shall have the same meaning as assigned to it in clause (za) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000); (r) "real time alert" means any communication sent to the assessee, by way of Short Messaging Service on his registered mobile number, or by way of update on his Mobile App, or by way of an e-mail at his registered email address, so as to alert him regarding delivery of an electronic communication; (s) "registered account" of the assessee means the electr....
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.... 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 in (2021) 133 taxmann.com 83 ( Gujarat), wherein it is held that breach of mandatory statutory provision itself is fatal to the assessment order. 10. In the facts of the present case, nothing has been brought on record by the respondent to suggest that the show cause notice along with draft assessment order was served upon the writ applicant. We find from the impugned assessment order that there are variations from the return filed by the writ applicant as regards disallowance. The final assessment order is not made in accordance with the procedure envisaged under section 144 (xvi) (b) of the ....