Failure to provide a personal hearing as required under Section 144B of the Income Tax Act violates principles of natural justice, rendering the assessment order invalid.

JUDGMENT

Manmohan, J.: (Oral)--The present petition has been heard by way of video conferencing.

2. Present writ petition has been filed challenging the assessment order and notice of demand dated 30th April 2021. Petitioner also seeks directions to restrain the Respondent from giving effect to the impugned assessment orders and notices.

3. Learned counsel for the Petitioner states that vide show cause notice- cum-draft assessment order dated 23rd April 2021 respondent set the date of compliance as 26th April, 2021 with a proposal to vary the declared income by making substantial additions on account of unsecured loans of 33 lenders. He states that Petitioner filed objections against the show cause notice within the short time allowed and requested for grant of personal hearing in terms of Section 144B(7)(vii) of the INCOME TAX ACT , 1961 (hereinafter referred to as the `Act') to demonstrate the material not considered in show cause notice and explain the evidence filed, which was neither allowed nor rejected by the respondent.

4. He points out that on 24th April 2021, the CBDT had extended timeline for completing assessment till 30th June 2021 but the respondent passed the impugned Assessment Order under Section 143 (3) read with Section 144B of the Act along with issuance of notice of penalty under Section 27l AAC, 270A and demand notice raising a high pitched demand of Rs.3,90,35,560/- on 30th April 2021, which is against the specific provisions of the Act as well as a complete breach of principles of natural justice.

5. He states that though the statutory appeal against such an order is not an effective remedy, but as the Petitioner was not aware about admittance of writs against such orders by this court, hence, under compulsion filed appeal before Commissioner (Appeals) on 31st May 2021 in terms of CBDT circular no. 08/2021 dated 30th April 2021.

6. Learned counsel for the Petitioner submits that the said impugned order and notices have been passed without proper appreciation of the facts of the present case and without affording the Petitioner an opportunity of hearing and hence the same is in gross violation of principles of natural justice and therefore, is not in accord with the provisions of the Act, i.e., Clause (vii) of sub-Section (1) of Section 144B and Section 144B (7) as well as provisions of the Scheme.

7. Issue notice. Mr. Sanjay Kumar, learned counsel accepts notice on behalf of respondent and waives the right to file counter affidavit.

8. He states that the present writ petition is not maintainable as the petitioner had already availed of an alternative effective remedy by filing an appeal.

9. Having heard learned counsel for the parties, this Court is of the view that Section 144B (7) provides for a personal hearing. 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--

xxxx xxxx xxxx xxxx

(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 i