I) Ge Oil & Gas India Private Ltd., Coimbatore, Tamilnadu v. Assistant Commissioner Of Income Tax, Coimbatore Tamilnadu, Passed In W.p

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE C.SARAVANAN M/s.Nissan Motor India Private Limited,Represented by its Authorized SignatoryMr.Prantap Kalra,Plot No.1A, SIPCOT Industrial Park,Mattur Post, Oragadam, Sriperumbudur,Kancheepuram, Chennai,Tamil Nadu – 602 105....Petitioner 1. The Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, National e-Assessment Centre, Delhi. 2. The Assistant Commissioner of Income-tax, Corporate Circle 4(1), Aayakar Bhawan, No.121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034....RespondentsPrayer: Petition filed under Article 226 of the Constitutionof India to issue a Writ of Certiorari calling for the recordscomprisedintheImpugnedOrderbearingOrderNo.ITBA/AST/S/143(3)/2021-2022/1032600211(1) dated 22.04.2021passed by the first respondent under Section 143(3) read withSection 144B of the Act for the Assessment Year 2016-2017,quash the same. The petitioner has challenged the impugned order dated22.04.2021 passed by the first respondent on the ground thatthe impugned order has been passed without jurisdiction and inviolation of Section 144(C) of the Income Tax Act, 1961(hereinafter referred to as the IT Act).https://hcservices.ecourts.gov.in/hcservices/ 2. It is the case of the petitioner that the firstrespondent ought to have passed a Draft Assessment Order. Itis submitted that instead an Assessment Order has been passedbypassing the statutory safeguards under Section 144(C) of theIT Act and therefore it is liable to be quashed. In thisconnection, the learned counsel for the petitioner has reliedon the following three decisions:- (i) GE Oil & Gas India Private Ltd., Coimbatore, TamilNadu Vs Assistant Commissioner of Income Tax, Coimbatore TamilNadu, passed in W.P.No.1575 of 2020 dated 05.01.2021.(ii) Vijay Television (P) Ltd., Vs Dispute ResolutionPanel and others, passed in W.P.Nos.1526 & 1527 of 2014 dated29.04.2014. (iii) Assistant Commissioner of Income-tax, Media Circle-11, Chennai Vs Vijay Telivision (P) Ltd., passed inW.A.Nos.1327 to 1329 of 2014 dated 23.04.2018. 3. The learned counsel for the petitioner submits thatthe time for passing the Draft Assessment Order has alsoexpired and therefore the impugned order has to be merelyquashed, no further liberty should be given to the respondentsfor passing any fresh Draft Assessment Order. 4. Appearing on behalf of the respondents, the learnedsenior standing counsel submits that though the impugned orderhas passed under Section 143(3) read with Section 144B of theIT Act, nevertheless, the impugned order also indicates thatit is a Draft Assessment Order and therefore the petitionerhas an opportunity of filing appropriate objections before theDispute Resolution Panel and therefore no premium should begiven to the petitioner on account of the technical mistake inthe impugned order that the order has been passed underSection 143(3) of the IT Act, 1961. It is submitted that theorder also states that it is a draft assessment order underSection 144(C) of the IT Act, 1961. In this connection, thelearned senior standing counsel for the respondents has drawnreference to Paragraphs 3 to 5 of the Counter Affidavit whichreads as under:- “3. As regards the averments in paragraph 3, it issubmitted that the same are admitted to the extent thatit was a totally unintentional technical error and hasoccurred as it was the very first year of operation ofthe new scheme, that is Faceless Assessment Scheme 2019(FAS-2019) and many functionalities which were newi.e., operative for the first time under the onlinefaceless scheme were either from plain reading of PageNo.2 of body of the order dated 22.04.2021 where it isstated that it is a “Draft Order u/s 144C of the IncomeTax Act, 1961”. The order was in fact passed byRespondent Assessing Officer as Order passed undersection 144C of the Income Tax Act 1961 against whichhttps://hcservices.ecourts.gov.in/hcservices/the eligible assessee i.e., petitioner could raise objection before the Hon'ble Dispute Resolution Panel(Hon'ble DRP) so that the assessment order could befinalized on the basis of the Directions of the Hon'bleDRP. But due to technical error, inadvertently thedraft order was passed u/s 143(3) read with section144B of the Income Tax Act instead of Draft Order u/s144C of the Income Tax Act. As soon as this fact cameto the notice of the Predecessor Respondent AssessingOfficer, the same was brought to the notice of NeFAC,New Delhi by the Respondent Assessing Officer throughproper channel i.e., through the Range Head and theconcerned Commissioner of Income Tax seeking remedialaction on its own through emails.4. It is further submitted that what was intendedto be passed by the 1[st] respondent is only a draftassessment order u/s 144C. In fact it is the draftassessment order u/s.144C which was sent to the ReviewUnit and the Review Unit concurred with the same. Theaverments in paragraphs 4 to 15 are not traversed upon.As regards the averments in paragraphs 16 to 35, it isreiterated that the mentioning of Sec.143(3) r.w.s 144Band consequential mentioning of charging of interest,generation of computation sheet is a totallyunintentional technical error and has occurred as itwas the very first year of operation of the new scheme,that is Faceless Assessment Scheme, 2019 (FAS-2019) andmany functionalities which were new, that is operativefor the first time under the online Faceless Schemewere either not operating (at times) or operating witherrors at times. It is submitted that due toinadvertent technical error the case attained finalitytherefore, the system has generated Demand Notice wassent to the petitioner which is a part of onlineprocedure on attaining the finality of the case orcompletion of proceedings u/s 143(3) of the Income TaxAct. On the other hand, if upon completion ofassessment u/s 143(3) of the Income Tax Act if refundarises on excess charge of interest or otherwise thenthe system automatically generates Refund and sends itto the assessee. It is submitted that the fact thatthe order of the TOP was annexed as a part of theimpugned order and that there was no mention of penallyproceedings, shows that the impugned order was intendedto be a draft order only and not otherwise. 5. It is submitted that the respondents had nointention of violating any statutory provisions,principles of natural justice or judicial precedents.However, the mistake has arisen due to technicalglitches and neither the petitioner nor the respondentshould benefit or suffer because of the same. It istherefore most respectfully submitted that this Hon'bleCourt may be pleased to direct the petitioner as wellas the respondents to treat the impugned order as anhttps://hcservices.ecourts.gov.in/hcservices/order u/s.144C(1) and further actions in consonance with the provisions of Sec.144C may be taken by thepetitioner and the respondents herein.” 5. It is submitted that the respondents had nointention of violating any statutory provisions,principles of natural justice or judicial precedents.However, the mistake has arisen due to technicalglitches and neither the petitioner nor the respondentshould benefit or suffer because of the same. It istherefore most respectfully submitted that this Hon'bleCourt may be pleased to direct the petitioner as wellas the respondents to treat the impugned order as anhttps://hcservices.ecourts.gov.in/hcservices/order u/s.144C(1) and further actions in consonance with the provisions of Sec.144C may be taken by thepetitioner and the respondents herein.” 5. The learned senior standing counsel for therespondents further submits that there was an interimprotection given to the petitioner on 02.06.2021 by keepingall the proceedings in abeyance. The learned senior standingcounsel for the respondents further submits that as perNotification No.S.O.4805 (E) dated 31.12.2020 passed underSection 3(1) of the Taxation and Other Laws (Relaxation andAmendment of Certain Provisions) Act, 2020, the time limit forpassing appropriate order would have expired on 30.09.2021 andthat the interim protection given to the petitioner on02.06.2021 has operated against the Department and thereforethe Department should be left free to pass a fresh DraftAssessment Order, if the Court is so inclined to interfere byquashing the impugned order. 6. By way of rejoinder, the learned counsel for thepetitioner submits that the Department is aware of theconsequences of the wrong orders passed and therefore noleverage should be given to the Department. It is furthersubmitted that the impugned order should be quashed and nofurther liberty should be given to the respondents to pass anyDraft Assessment Order at this distant point of time. Thelearned counsel for the petitioner refers to Paragraph 8 ofthe counter, which reads as under:- “8. As regards the averments of the SecondRespondent that the inadvertent technical errorhappened as the impugned order was issued in the firstyear of operation of Faceless Assessment Scheme, 2019,the Petitioner submits that it is still incumbent uponthe First Respondent to follow the mandatory procedurelaid down under section 144B read with section 144C ofthe Act and if there is a violation, the assessmentorder is liable to the declared as one withoutjurisdiction, null and void and unenforceable. TheFaceless Assessment Scheme, 2019, was brought into thestatute vide section 144B of the Act by the Taxationand Other Laws (Relaxation and Amendment of CertainProvisions) Act, 2020. By virtue of item (A) of subclause (a) of section 144B(XXV) of the Act, it isincumbent upon the National Faceless Assessment Centreto forward a draft assessment order to the eligibleassessee, where any variation made is prejudicial tothe interest of assessee. It is also pertinent to notethat the provisions of sub section (9) to section 144Bexplicitly provide that an assessment made undersection 143(3) shall be non-est if the statutoryprocedure laid down under section 144B is not compliedwith.” 7. Heard the learned counsel for the petitioner and thehttps://hcservices.ecourts.gov.in/hcservices/learned senior standing counsel for the respondents. I have 7. Heard the learned counsel for the petitioner and thehttps://hcservices.ecourts.gov.in/hcservices/learned senior standing counsel for the respondents. I have perused the impugned order and the provisions of the Act andthe notification issued therein. It is noticed that theimpugned order dated 22.04.2021 is a hybrid order whichindicates that it has been passed both as an Assessment Orderand also as Draft Assessment Order. The explanation given bythe respondents in their counter affidavit appears to bereasonable. The consequential demand notice dated 22.04.2021appears to have been issued that on account of the confusionprevailing after adoption of Faceless Assessment, during theinitial stage of implementation. Considering the same, theimpugned order dated 22.04.2021 passed by the respondents bothunder Section 143(3) and under Section 144(C) of the IT Actstands quashed. 8. The respondents are directed to pass a fresh DraftAssessment Order within a period of thirty days from the dateof receipt of a copy of this order. If such orders arepassed, the petitioner is free to exercise one of the optionunder Section 144(C) of the IT Act, 1961. In case thepetitioner fails to exercise such action, the first respondentmay pass appropriate Assessment Orders on merits and inaccordance with law. 9. This Writ Petition stands partly allowed in terms ofthe above observations. No costs. Consequently, connectedWrit Miscellaneous Petitions are closed. arb To 1.The Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, National e-Assessment Centre, Delhi. 2.The Assistant Commissioner of Income-tax, Corporate Circle 4(1), Aayakar Bhawan, No.121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. +1cc to Mr.N.V.Balaji, Advocate SR. No.57954+1cc to Mrs.Hema Murali Krishnan, Advocate SR. No.57374 PMK (CO)https://hcservices.ecourts.gov.in/hcservices/PR (06/12/2021)