Point of Law: Taxation - Assessment order - Demand Notice - Section 144B (7) mandatorily provides for issuance of a prior show cause notice and draft assessment order before issuing the impugned assessment order.

JUDGMENT :

Manmohan, J.

1. The petition has been heard by way of video conferencing.

2. Present writ petition has been filed challenging the assessment order under Section 143(3) read with Section 143(3A) and 143(3B) dated 09th April, 2021 and the accompanying notice of demand under Section 156 of the Income Tax Act, 1961 (for short ‘Act’) in the case of the petitioner for Assessment Year [AY] 2018-19 passed by the Respondent.

3. Learned counsel for the Petitioner states that the impugned order and the accompanying notice issued by the Respondents are patently illegal, bad in law, passed without application of mind and against the principles of natural justice. Learned counsel for petitioner submits that the impugned assessment order has been finalized without issuing prior notice as well as draft assessment order and without affording an opportunity of being heard to the petitioner as well as without providing an opportunity to the petitioner to file its objections.

4. Per contra, learned counsel for the respondent states that the present writ petition is not maintainable as the petitioner has an alternative effective remedy by filing an appeal.

5. Having heard learned counsel for the parties, this Court is of the view that once the assessment has been done by the respondent No. 1-National Faceless Assessment Centre, Delhi, it has to be in accordance with the procedure prescribed for assessment by the said Authority and cannot be in accordance with the procedure prescribed in the earlier regime.

6. This Court is also of the view that Section 144B (7) mandatorily provides for issuance of a prior show cause notice and draft assessment order before issuing the impugned assessment order. The said Section also provides for an opportunity of personal hearing, if requested, by the assessee. The relevant portion of Section 144B (7) and Section 144B (9) are reproduced hereinbelow: -

“144B. Faceless assessment –

(1) xxxx xxxx xxxx xxxx

(7) For the purposes of faceless assessment—

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(vii) in a case where a variation is proposed in the draft assessment order or final draft assessment 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);

xxxx xxxx xxxx xxxx

(xii) the Principal Chief Commissioner or the Principal Director General, in charge of the National Faceless Assessment Centre shall, with the prior approval of the Board, lay down the standards, procedures and processes for effective functioning of the National Faceless Assessment Centre, Regional Faceless Assessment Centres and the unit set up, in an automated and mechanised environment, including format, mode, procedure and processes in respect of the following, namely: —

xxxx xxxx xxxx xxxx

(h) circumstances in which personal hearing referred to clause (viii) shall be approved;….

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(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.”

7. Since in the present case no prior show cause notic