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TMI Blog2023 (11) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the present case are as under: 4.1 The petitioner is a company and majority of its shareholders are citizens of India. 4.2 The petitioner filed return of income for the Assessment Year 2018-19 (ie. year under consideration) on 26.09.18. Later, revised return of income was filed by the petitioner declaring total loss at Rs. 1,25,90,388/-. The petitioner had substantial interest free funds at its disposal for the year under consideration, as is evident from the Audited Annual Accounts. 4.3 The respondent found that during the year under consideration, investments increased from Rs. 26,95,49,900/- to Rs. 28,57,99,000/- i.e. investments increased by Rs. 1,62,50,000/-. Hence, the respondent prepared a draft assessment order determining total income of petitioner at Rs. 1,62,50,000/- after proposing addition of Rs. 1,62,50,000/- under section 69 of the Act in respect of alleged unexplained investments and sent the same through show cause notice dated 25.03.21 calling upon the petitioner to show cause as to why assessment should not be completed as per draft assessment order. The respondent also stated in paragraph 3 of the show cause notice that response should be submitted thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s silent, with no positive words in the Act or the Rules spelling out the need to hear the party whose rights or interests are likely to be affected, requirement to follow fair procedure before taking a decision must be read into the statute, unless the statute provides otherwise. The principles of natural justice operate in areas not covered by any law. They do not supplant the law of the land but only supplement it. They are not embodied rules and their aim is to secure justice or to prevent miscarriage of justice. The principles of natural justice need to be adhered in each and every case. It is a settled law that it is not permissible for any authority to jump over the compliance of natural justice on the ground that even if opportunity of hearing had been afforded, it would have served no fruitful purpose. Whether opportunity of hearing would serve any purpose or not has to be considered at a later stage and such things cannot be presumed by the authority and therefore it is trite law that principles of natural justice are always to be observed and no authority can dispense with requirement of principles of natural justice on the presumption that no prejudice is going to be ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of this Act, the assessment under sub-section (3) of section 143 or under section 144, in the cases referred to in sub-section (2), shall be made in a faceless manner as per the following procedure, namely:- xxx (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 intimation referred to in clause (xiii) is received from the National Faceless Assessment Centre, 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upports video conferencing or video telephony, in accordance with the procedure laid down by the Board;" 9. Section 144B of the Act, 1961 provides detailed procedure for Faceless Assessment introduced by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 with effect from 1st April, 2021. Section 144B(1) starts with a non-obstante clause i.e. "notwithstanding anything to the contrary contained in any other provisions of this Act, the assessment under sub-section (3) of section 143 or under section 144, in the cases referred to in subsection (2), shall be made in a faceless manner..." as per the procedure prescribed therein. 10. The above-referred clause of section 144B(1) and 144B(7) deals with the procedure to be adopted by the National Faceless Assessment Centre on receipt of draft order from the assessment unit who has prepared the draft after providing opportunity to the assessee by serving a notice upon him to show cause as to why the assessment should not be completed as per such draft or final draft or revised draft assessment order. Therefore, such personal hearing in era of Faceless assessment is to be provided through video confere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice while framing assessment and affording an opportunity of personal hearing by not following the prescribed procedure laid down as per the provisions of section 144B of the Act, 1961 for Faceless assessment. 10. In the result, this petition succeeds and is accordingly allowed. The impugned order of assessment passed by the respondent under Section 147 read with Section 144B of the Income Tax Act, 1961 dated 28.09.2021 and demand notice dated 28.09.2021 for the assessment year 2018-19 under section 156 of the Act are quashed and set aside. The respondent/Revenue will be at liberty to proceed with assessment under the provisions of section 144B of the Act, 1961 as permissible under the law after issuance of show cause notice-cum-draft assessment order and to provide an opportunity of hearing to the petitioner. The petitioner shall be issued a show cause notice and be given an opportunity of hearing as per the provisions of section 144B of the Act, 1961. Such exercise shall be completed within 12 weeks from the date of receipt of copy of this order. 11. Rule is made absolute to the aforesaid extent. Direct service is permitted. 12. It is made clear that we have not examined the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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