TaxTMI 
TaxTMI 
2026 (6) TMI 1451
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....enalty under Section 270A read with Section 274 of the Income Tax act are also challenged in these writ petitions. 2. The facts that led to the filing of these writ petitions are as follows: The petitioner is a partnership firm engaged in the business of construction of apartments, villas and commercial complexes. The petitioner had submitted the return of income under Section 139(1) of the Income Tax Act pertaining to the assessment year 2020-21. The faceless assessment authority issued a notice under Section 143(2) of the Act, requiring the petitioner to submit certain clarifications regarding its stock valuation. Ext.P2 reply was submitted by the petitioner on 21.07.2021. Later, Ext.P3 notice was served upon the petitioner under Section 142(1) of the Act, requiring the petitioner to furnish the Balance Sheet, Profit and Loss A/c, Cash Flow statement, Form 26AS, note on nature of business activity, details of raw materials used, output produced, technology used for production etc. According to the petitioner, Exts.P4 and P5 replies were submitted by the petitioner along with necessary documents. However, the petitioner was thereafter, issued with a show cause notice d....
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....ents fail to furnish a draft assessment order to the petitioner, as contemplated under Section 144 B(1) of the Act, before finalizing the proceedings of assessment as per Ext.P8. The learned counsel also placed reliance upon the decisions rendered in Chander Arjandas Manwani v. National Faceless Assessment Centre [(2022) 442 ITR 197(Bom)], Deputy Commissioner of Income Tax v. Abacus Real Estate Private Limited [(2023) 332 CTR (SC) 38], Golden Tobacco Ltd. v. National Faceless Assessment Centre[(2022) 442 ITR 204 (Bom)], Multiplier Brand Solutions Pvt.Ltd V. Addl. Joint Deputy Asst. Commissioner of Income Tax Officer and Ors [(2022) 442 ITR 202(Bom)], P.T.Lee Chengalvaraya Naicker Trust v. Income Tax Officer, National Faceless Assessment Center and Ors. [(2022) 329 CTR (Mad) 613] and The National Faceless Assessment Center v. Automotive Manufactures Pvt.Ltd.[(2023) 331 CTR (SC) 717]. 7. On the other hand, learned standing counsel stoutly opposed the aforesaid contentions by pointing out that, the assessment was finalized after strictly following the procedure contemplated under the Act and giving the petitioner a proper opportunity to submit objections and thereby fulfilling the ....
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....lated that, in the case of an "eligible assessee", where there is a proposal to make any variation which is prejudicial to the interest of "such assessee" as mentioned in Sub Section (1) of Section 144C, the National Faceless Assessment Center shall serve the draft assessment order on the assessee. Section 144(C) (15)(b) defines the eligible assessee which reads as follows: ""Eligible assessee" means,- (i) any person in whose case the variation referred to in sub-section (1) arises as consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of Section 92CA; and [(ii) any non-resident not being a company, or any foreign company.] [Provided that, such eligible assessee shall not include person referred to in sub-section (1) of Section 158BA or other person referred to in Section 158BD]" 11. Thus, going by the procedure contemplated as above, the requirement of issuing a draft assessment order before finalizing the proceedings is necessitated only in the case of an "eligible assessee" as defined under Section 144(C)(15)(b) of the Act. The petitioner does not have a case that, he is falling under the category of "eligi....
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....sessment 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 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; (b) in case the variations proposed in the revised draft assessment order are prejudicial to the interest of the assessee in comparison to the draft assessment order or the final draft assessment order, provide an opportunity to the assessee, by serving a notice calling upon him to show-cause as to why the proposed variation should not be made. 13. Thus, from the above statutory provisions, it is evident that, since there is a distinction made between the "eligible assessee" and other assessee, as per the provisions of the Act and that the requirement of issuance of draft assessment order is made only in respect of an "eligible assessee", which term is clearly defined under the Income Tax Act itself, unless it is shown that, the petitioner is an "eligible assessee", he cannot insist that a draft assessme....
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.... sustain the impugned judgment of the learned Single Judge which takes a view contrary to the express provisions of the statute while finding that there was a violation of the principles of natural justice that vitiated the assessment completed against the respondent - assessee." 15. Thus, in the light of the above, the aforesaid contention of the petitioner is only to be rejected. It is to be noted in this regard that, in Ext.P6 show cause notice, the proposals for variation were specifically highlighted and the response of the petitioner was also sought. Going by the statutory procedure applicable to an assessee, who is not an eligible assessee as referred to above, the requirement is that, the assessee should be served with a show cause notice intimating about the proposal. In this case, it is discernible that, in Ext.P6, that statutory requirement has been fulfilled and therefore, no interference is warranted. 16. The learned counsel for the petitioner also raised a contention that the petitioner was not afforded with an opportunity for being heard. The decision of High Court of Bombay in Chander Arjandas Manwani's case (supra) was also relied on by the petitioner. Ho....