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TMI Blog2022 (4) TMI 1184X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 had issued further notice under Section 142(1) of the Act on 13.11.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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. National EAssessment Centre. 7. SB Civil Writ Petition NO.6047 of 2021, Devgiri Exports Vs. ITO (Raj HC) 6. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued 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 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 requisition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntre, 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 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 ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lise 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 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 revise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 Facele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 conferencing or video telephony, in accordance wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of the Information Technology Act, 2000 (21 of 2000); (b) "authorised representative" shall have the same meaning as assigned to it in su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 electronic filing account registered by the assessee in designated portal; (t) "registered e-mail address" means the e-mail address at which an electronic communication may be delivered or transmitted to the addressee, including- (i) the e-mail addr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 act as inspite of the variation being prejudicial to the assessee, no opportunity has been given to the assessee by serving show cause notice along with draft assessment order calling upon him to show cause as to why the proposed variation should not be made. Thus, we have no doubt in holding that the impugned order of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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