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TMI Blog2023 (2) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... cation to the petitioner that the assessment shall be completed in accordance with the Faceless Assessment Scheme, 2019. 1.3. On 07.11.2020, notice in the form of questionnaire came to be issued under Section 142(1) of the Act requesting the petitioner to submit various details in the annexure appended to the notice. A further reminder was addressed to the petitioner on 18.12.2020 by giving reference of the notice dated 17.11.2020. The petitioner, on 25.12.2020, attempted to send all the details which were sought. Further details were called for on 29.12.2020. 1.4. It is averred that before the petitioner could submit the details sought for, the respondent on 06.02.2021 straightway passed the order of assessment without issuance of show cause notice-cum-draft order by adding sum of Rs. 1,18,87,449/-. 2. This Court (Coram:- Ms. Bela M. Trivedi, J. Her Ladyship then was and Dr. Ashokkumar C.Joshi, J.) while issuing notice on 25.08.2021 passed the following order:- "The learned senior advocate Mr. S. N. Soparkar for learned advocate Mr. B. S. Soparkar for the petitioner, pressing into service the provisions of the Scheme namely the E-assessment Scheme, 2019, submits that the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 144 B of the Income Tax Act, 1961. The assessment of the petitioner was completed in accordance with the Faceless Assessment Scheme, 2019 and the questionnaire had been issued on 17.11.2020 which had been submitted by the petitioner. A further reminder was also addressed on 18.12.2020 and eventually the Assessment Order has been passed on 06.02.2021, which according to the petitioner, is without issuance of show cause notice cum draft order for making an addition of Rs.1,18,87,449/-. 3. Noticing the Scheme of 2019 and 2020 since the order of assessment is of 06.02.2021 and provision of Section 144 B of the Income Tax Act has come into effect from 01.04.2021, we deem it appropriate to protect the interest of the Assessee by way of an interim relief in terms of para 6(b) till 04.10.2021. 4. In the meantime, let the pleadings be completed with the copy to the other side. The matter shall be taken up for final hearing on 04.10.2021. " 3. The affidavit-in-reply is filed by the respondent on 23.06.2022 refuting all averments and allegations as well as contentions raised before this Court in this petition. 3.1. The challenge is to the order dated 06.02.2021 passed under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act issued by the Central Government is perused, wherein the e- Assessment Scheme, 2019 published vide notification of the Government of India, Ministry of Finance (Department of Revenue), Central Board of Direct Taxes prescribes for procedure for assessment at para 5. The assessment, under the Scheme, is to be as per the following procedure:- "5. Procedure for assessment. - (1) The assessment under this Scheme shall be made as per the following procedure, namely: - (i) the National e-Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143, specifying the issues for selection of his case for assessment; (ii) the assessee may, within fifteen days from the date of receipt of notice referred to in clause (i), file his response to the National e-assessment Centre; (iii) where the assessee - (a) has furnished his return of income under section 139 or in response to a notice issued under subsection (1) of 142 or sub-section (1) of section 148; and a notice under sub-section (2) of section 143 has been issued by the Assessing Officer or the prescribed income-tax authority, as the case may be; or (b) has not furnished his return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to in clause (viii) or (ix) to the concerned assessment unit; (xi) where the assessee fails to comply with the notice referred to in clause (vi) or notice issued under subsection (1) of section 142 or with a direction issued under sub-section (2A) of section 142, the National e-Assessment Centre shall serve upon such assessee a notice under section 144 giving him an opportunity to show-cause, on a date and time to be specified in the notice, why the assessment in his case should not be completed to the best of its judgment; (xii) the assessee shall, within the time specified in the notice referred to in clause (xi) or such time as may be extended on the basis of an application in this regard, file his response to the National e-Assessment Centre; (xiii) where the assessee fails to file response to the notice referred to in clause (xi) within the time specified in the notice or within the extended time, if any, the National e-Assessment Centre shall intimate such failure to the assessment unit; (xiv) the assessment unit shall, after taking into account all the relevant material available on the record make in writing, a draft assessment order or, in a case where in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the modifications suggested by the review unit, send the final draft assessment order to the National e-assessment Centre; (xxi) The National e-assessment Centre shall, upon receiving final draft assessment order, follow the procedure laid down in sub-clause (a) or sub-clause (b) of clause (xvi), as the case may be; (xxii) the assessee may, in a case where show-cause notice under sub-clause (b) of clause (xvi) has been served upon him, furnish his response to the National e-assessment Centre on or before the date and time specified in the notice or within the extended time, if any; (xxiii) the National e-assessment Centre shall,- (a) in a case where no response to the show-cause notice is received, finalise the assessment as per the draft assessment order, as per the procedure laid down in sub-clause (a) of clause (xvi); or (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 e-assessment Centre; (xxv) the National e-assessment Centre shall, upon receiving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an automated examination tool, whereupon, it may decide to finalize the assessment as per the draft assessment order and serve a copy of such order and notice for intimating penalty proceedings, if any, to the assessee, along with the demand notice specifying the sum payable by, or refund of any amount. It is also required to provide an opportunity to the assessee in case a modification is proposed by serving the notice calling upon him to show cause as to why the assessment should not be completed as per the draft assessment order. 7. We noticed that subsequently, the law has been amended. Section 144(B) of the Act has been introduced from 01.04.2021. This change, of course, is after the assessment order passed on 06.02.2021 has come. What is applicable in case of the present petitioner is the aforementioned notification of 13.08.2020 which is known to be the e- Assessment Scheme. 8. In absence of following of the scheme where it is a must for the authority to provide the show cause notice - cum - draft assessment order and also availing the opportunity to the petitioner, in absence of vital and mandatory procedure having been followed, the Court needs to accede to the request ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and various units shall be exchanged exclusively by electronic mode. The proviso would not be necessary to be discussed at this stage which concerns inquiry or verification conducted by the verification unit. 14. Sub-sections (7) of section 144B provides that for the purposes of faceless assessment an electronic record shall be authenticated by the National Faceless Assessment Centre by affixing its digital signature and by assessee or any other person, by affixing if required his digital signature if he is required under digital signature. 15. Sub-section (2) of section 114 (B) says that every notice or order or any other electronic communication shall be delivered to the addressee, being the assessee, by way of placing an authenticated copy thereof in the assessee's registered account; or by sending an authenticated copy thereof to the registered email address of the assessee or his authorised representative; or uploading an authenticated copy on the assessee's Mobile App. Thus, there is specific requirement for service by electronic mode and in absence of placing before this Court any proof of virtual exchange or authenticated copy of service to the assessee, there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand issued by the respondent authority and any other proceedings initiated pursuant to the said. 19. However, we direct that the respondent/revenue will be at liberty to proceed with the assessment process under the provisions of Section 144B of the Act, as permissible under the law obviously after issuance of the prior notice-cum-draft assessment order and on availing an opportunity to the petitioner. The petitioner shall file response and the objection to the same. Opportunity of hearing if is sought for, the same shall be accorded including opportunity of personal hearing. Let the procedure under section 144B of the Act be followed by the revenue scruplously." 9.1. This aspect not being in dispute and in challenge, the Court needs to interfere. 10. The Decision of Madras High Court in case of Kandan & Kannan Medical Agency vs. Income Tax Officer, Non Corp Ward 10(2), Chennai [(2020) 113 taxmann.com 340 (Madras)], where the Assessing Officer made two additions. The show cause notice under Section 142(1) was issued only in respect of one of the issues, the impugned order was set aside and the matter was remanded back for redoing the assessment after considering the reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r reasons its PAN ABFFA6446E is with ITO, Ward-1 Churu, he already has made a request in the month of November, 2021 for the transfer with a further request that necessary directions to be issued for long term effect of this. 13. Learned advocate Mr. Soparkar has emphatically urged that there is no way in which the petitioner has contributed to the matter going on before the ITO, Ward-1, Churu. He has no connection with Rajasthan and therefore, he has made an application before the concerned authority. This is not only a unilateral request which has come from the petitioner, but, the Income Tax Officer looking after this aspect has also made a request for such transfer. 14. Undoubtedly, the part of cause of action has arisen in Gujarat. The Supreme Court's decision in case of Rajendran Chingaravelu vs. R.K.Mishra, Additional Commissioner of Income-tax [(2010) 186 Taxman 305 (SC)], was considering the maintainability of the petition under Article 226 of the Constitution of India to hold that whether even if a small fraction of cause of action arises within the jurisdiction of the State, the same would accrue within the territory of the State and the State would have a jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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