The assessment order was void ab initio as Sections 143(3A) and 143(3B) had ceased to exist with effect from 01st April, 2021, and there was a failure on the part of the Respondents to comply with the mandatory obligation laid down in Section 144B (1) (xvi) of the Act, and the assessment proceeding had been completed in violation of the principles of natural justice.

JUDGMENT

Manmohan, J. - Cm APPL. 20993/2021

1. Allowed, subject to all just exceptions.

2. Accordingly, the application stands disposed of.

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

W.P.(C) 6662/2021

4. Present writ petition has been filed challenging the assessment order and notice of demand dated 06th April, 2021 for the Assessment Year [AY] 2018-19 and seeking a stay on the operation of the impugned assessment order and the consequential initiation of penalty proceedings.

5. Learned counsel for the Petitioner submits that the Assessment Order dated 06th April, 2021 for assessment year 2018-19 under Section 143(3) of the Income Tax Act, 1961 read with Sections 143(3A) & 143(3B) is void ab initio as Sections 143(3A) and 143(3B) of the Act had ceased to exist with effect from 01st April, 2021, in terms of Section 143(3D) of the said Act.

6. He further submits that the impugned Assessment Order also deserves to be quashed for being illegal and bad in law because of the failure of the Respondent to comply with the mandatory provision of the "Faceless Assessment" under Section 144B (1) (xvi) of the said Act, by not serving a Notice as well as the draft assessment order to the Petitioner.

7. According to learned counsel for petitioner, the impugned assessment order was without jurisdiction and non-est in the eyes of law.

8. Issue notice, Mr. Ruchir Bhatia, learned counsel for respondent, accepts notice and waives opportunity to file a counter affidavit.

9. Mr. Ruchir Bhatia states that no prior notice or service of draft assessment order was required as all the documents were already on record.

10. Since the present case primarily pertains to interpretation and effect of Section143(3D),the same is reproduced hereinbelow :-

"(3D) Nothing contained in sub-section (3A) and subsection (3B) shall apply to the assessment made under subsection 144, as the case may be, on or after the 1st day of April, 2021."

11. Keeping in view the mandatory language of Section 143(3D) of the Act, this Court is of the view that after 01 st April, 2021, the assessment orders could have been passed in consonance with Section 144 B of the Act alone.

12. In any event, this issue is no longer res integra as a Coordinate Bench of this Court in Gurgaon Realtech Limited v. National Faceless Assessment Centre Delhi, W.P. (C) 5849/2021 has held that the Assessment Order could not have been passed under Section 143(3A) and 143(3B) of the Act by the Revenue after 31st March, 2021 having regard to Section 143(3D) of the Act.

13. This Court also agrees with the submissions of the learned counsel of the Petitioner that there was failure on the part of the Respondents to comply with the mandatory obligation laid down in Section 144B (1) (xvi) of the Act inasmuch as there was non-service of prior notice and draft assessment order. The relevant portions of Section 144B xvi (a) and (b) as well as Section 144B(9) of the Act are reproduced hereinbelow:-

"144B. (1) Notwithstanding anything to the contrary contained in any other provisions of this Act, the assessment under subsection (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: -.........

(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 propos