TMI Blog2022 (12) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... does not record any reason for denial of opportunity of hearing to the petitioner. In faceless assessment procedure set in place w.e.f. 1.4.2022 by amendment in Section 144B(7), the personal hearing through video conferencing has been made mandatory, in case of the request made by the assessee. Thus having noticed that the petitioner herein had participated at every stage of the proceeding and submitted reply to the notices issued to him from time to time, the reply to the show cause-cum-draft assessment order dated 28.3.2022 given by the assessee runs into about 20 pages. The petitioner had specifically asked for grant of opportunity of personal hearing through video conferencing by communication on the website and the said request had been acknowledged by the respondent authorities. We, however, do not find any good reason for denial of such an opportunity to the petitioner herein. Personal opportunity of hearing was not granted to the petitioner, we do not find any good reason to grant any time to file response/counter affidavit. The impugned assessment order is, thus, found to be in violation of the principles of natural justice and against the procedure set in place f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2022 was then served upon the petitioner proposing to make certain additions in the return of total income of the petitioner. The petitioner filed response to the said notice on 28.3.2022 with the request for hearing in the matter through video conferencing as envisaged in the show cause-cum-draft assessment order. 5. It is contended that thereafter no response had been received by the petitioner and he kept waiting for personal hearing in the manner. The impugned assessment order dated 30.3.2022 has, thus, been passed in gross violation of the principles of natural justice, inasmuch as, no oral/personal hearing in the matter was granted to the petitioner, neither any communication was received by the petitioner from the office of respondent no. 2 of rejecting the request of the petitioner seeking personal hearing. 6. The challenge to the assessment order is two folds. Firstly, it is argued by the learned counsel for the petitioner that with the coming into force of the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 read with the Finance Act, 2021, a sea-change is brought in the administration of Income Tax Law, including the regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above submissions, learned counsel for the petitioner sought to impress upon the Court that Section 42 of the Finance Act, 2022, omitting sub-section (9) of Section 144B of the Income Tax Act be held unconstitutional, being ultra-vires to the Constitution. 11. In support of his arguments, learned counsel for the petitioner has placed the object and purpose of bringing the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020, the introduction of Section 144B, the statement of object of the amendment brought by the Finance Bill, 2022 and the decisions of the Apex Court in Commissioner of Customs (Import), Mumbai vs. Dilip Kumar and Company and others (2018) 9 SCC 1 ; Willie Slaney vs. The State of Madhya Pradesh AIR 1956 SC 116 and Commissioner of Income Tax vs. Vatika Township Private Limited (2014) 1 SCC 1 to assert that a legislature is not expected to enact a law which is contrary to the existing law or dilutes the rigor of law and the said principle assumes importance in the taxing statute which is to be construed strictly being fiscal statute. It was further argued that in procedural statute, if consequence provided, it has to be g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, it is proposed that the existing provisions of the section 144B of the Act may be amended to streamline the process of faceless assessment in order to address the various legal and procedural problems being faced in the implementation of the said section. Sub-section (9) of Section 144B, which provided that the assessment proceedings shall be void if the procedure mentioned in the section was not followed has been omitted, taking note of the fact that large number of disputes have been raised under the said sub-section involving technical issues arising due to use of information technology leading to unnecessary litigation. The amendments to omit sub-section (9) of Section 144B has been given effect retrospectively from 1st April, 2021, i.e. sub-section (9) of Section 144B has been omitted from its date of inception. 15. Taking note of the fact that the omission of sub-section (9) of Section 144B was with a view to streamline the process of faceless assessment, to remove legal and procedural problems being faced in the implementation of Section 144B introduced with the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, w.e.f. 1.4.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould not generally speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished. (v) A statute which not only changes the procedure but also creates new rights and liabilities shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication. The law relating to amendment of procedural statute, thus, as settled is that a statute which merely affects procedure is presumed to be retrospective in its application and should be given an extended meaning and should be strictly confined to its clearly defined limits. 18. In the instant case, a comparative study of the pre-amendment Section 144B and post-amendment Section 144B shows that various checks and measures have been added in the amendment by the Finance Act, 2022 in order to complete faceless assessment which has been brought in the Income Tax Act to increase ease of compliance for taxpayers, bring transparency and efficiency by removal of human interface with the department, in order to reduce litigation. The idea of bringing faceless assessment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the procedure prescribed under Section 144B. Even otherwise, Section 144B being a procedural statute, no right much less substantive right can be said to have been conferred by sub-section (9) of Section 144B upon the taxpayer which provided for the proceeding of the assessment being non-est if not made in accordance with the procedure laid down under Section 144B. The said sub-section in our considered opinion, was for imposing a burden upon the department rather than conferment of any right upon the assessee and further as noted in the amendment bill that it has lead to large number of litigation on technical grounds due to some procedural difficulty in implementation of faceless assessment. The challenge to the amendment brought by the Finance Act, 2022 in omission of sub-section (9) of Section 144B, for the above discussion, cannot be sustained. 20. The second limb of arguments of the learned counsel for the petitioner is that with the implementation of the faceless assessment with the introduction of Section 144B of the Income Tax Act, it is mandatory that the notice is served upon the assessee by National Faceless Assessment Centre as contemplated under Section 144B( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to by-pass the statutory remedy of appeal. 26. Considering the above submissions of the learned counsels for the parties and perused the record, we may note that it is brought before us that in the instant case, the proceedings for assessment were apparently conducted under the Faceless Assessment Scheme-2019. With the insertion of Section 143(3D) read with Section 144B w.e.f. 1.4.2021 by the Finance Act, 2021, the assessment proceedings were to be conducted in accordance with the procedure prescribed under Section 144B of the Income Tax Act, 1961 for faceless assessment. Sub-section 1(i) of Section 144B provided for service of notice on the assessee under sub-section (2) of Section 143 by the National Faceless Assessment Centre. 27. In the instant case, the notice under Section 143(2) read with Section 147 of the Income Tax Act, 1961 dated 30.6.2021 was issued by the Assistant C.I.T., Faizabad instead of the National Faceless Assessment Centre. 28. On receipt of the said notice, the assessee filed detailed objections dated 20.10.2021. The notice under Section 148 of the Income Tax Act, 1961 for the assessment year 2013-14 has, however, been issued to the assessee on 31.3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for providing personal hearing through video conferencing was uploaded on 29.3.2022. The copy of the response dated 29.3.2022 to the show cause notice-cum-draft assessment order with the request for hearing through video conferencing is appended as Annexure 11 to the writ petition and the copy of the E-filing page of the Income Tax Department, is appended at page 101 of the paper book, wherein the date of assessee s request for video conferencing was uploaded as 29th March, 2022 and the reason for seeking video conference is Matter requires explanation due to complexity of facts . Whereas ITD response-date and VC link details are blank. 34. The categorical submission of the learned counsel for the petitioner is that the petitioner awaited personal hearing in the matter but the order impugned dated 30th April, 2022 came to be passed in violation of the principles of natural justice. No oral/personal hearing was granted in the matter. 35. Taking note of the above fact, having noticed that the request was made by the petitioner for personal hearing in the matter on receipt of the show cause notice-cum-draft assessment order, the action of the respondent in not providing opp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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