Idex India Private Limited v. Additional/Joint/Deputy/Assistant Commissioner Of Income Tax/Income Tax Officer ==========================================================

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/SPECIAL CIVIL APPLICATION NO. 16690 of 2021 ========================================================== IDEX INDIA PRIVATE LIMITED VersusADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOMETAX/INCOME TAX OFFICER ========================================================== Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1NOTICE SERVED(4) for the Respondent(s) No. 2========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANIandHONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 14/12/2021 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1.This Court at the time of issuance ofnotice on 15.11.2021 passed the followingorder: “The petitioner is before this Court challenging underArticle 226 of the Constitution of India. The Assessmentorder passed under Section 143(3) read with Section 144Bof the Income Tax Act on the ground of non-compliance ofthe provision of law. It is the grievance on the part of thepetitioner that the respondent has failed to follow theprocedure under Section 144 B and straightaway pass theorder of assessment without issuing the show cause noticecum draft assessment order for giving any opportunity of hearing to the petitioner. The prayer sought for are as follows: 7 (a) quash and set aside the impugned order atAnnexure-’A’ to this petition; (b) pending the admission, hearing and final disposal ofthis petition, to stay implementation and operation of theorder at Annexure-A to this petition and stay the demandnotice at Annexure ‘G’ to this petition and the Penaltynotice at Annexure-H to this petition. (c) any other and further relief deemed just and proper begranted in the interest of justice; (d) to provide for the cost of this petition. 3. We have heard the learned Advocate Mr. BandishSoparkar who has not disputed that for the proposedvariation a show cause notice has not been issued. Wecould notice from 24.8.2021 show cause notice issued tothe petitioner the variation has been proposed by the lawofficer concerned. He has taken us to the order which isimpugned dated 22.9.2019 urging fervently that neitherthere is draft assessment order nor there is a complianceof the provision of Section 144 B particularly empasisingon 144 B(1) (xxv) to (xxxii). 4. Issue Notice as to interim relief returnable on22.11.2021. 5. Direct Service is permitted today by Speed Post.” 2. Thereafter, since the Jurisdictional Assessing Officer was to be joined as a party respondent, the order was passed on 25.11.2021 which deserves to be reproduced: “1.Draft amendment moved today is permitted byjoining jurisdictional Assessing Officer as a party fromVadodara and National Faceless Assessment Centre, NewDelhi will be a separate party. Necessary amendments tobe carried out today itself. 2. Let the service through the speed post be made to theNational Faceless Assessment Centre, New Delhi by nextweek. 3. We have heard the learned advocate, Mr.B.S.Soparkarappearing for the petitioner and learned senior standingcounsel, Mr.Varun Patel appearing for respondent-department. 4. Request has been made by the learned senior standingcounsel, Mr.Varun Patel to grant the time as there is no detail obtained from the National Faceless AssessmentCentre and it is not feasible for him to get it in a nearfuture. It is also further submitted that the cause titlesince was not proper, the concerned officer also wasunable to provide the necessary instructions. 5. We have also heard learned advocates on both the sideson the interim relief as the time is expiring on 29.11.2021for preferring the appeal. 3. We have heard the learned advocate, Mr.B.S.Soparkarappearing for the petitioner and learned senior standingcounsel, Mr.Varun Patel appearing for respondent-department. 4. Request has been made by the learned senior standingcounsel, Mr.Varun Patel to grant the time as there is no detail obtained from the National Faceless AssessmentCentre and it is not feasible for him to get it in a nearfuture. It is also further submitted that the cause titlesince was not proper, the concerned officer also wasunable to provide the necessary instructions. 5. We have also heard learned advocates on both the sideson the interim relief as the time is expiring on 29.11.2021for preferring the appeal. 6. Noticing the nature of litigation and the averment setout questioning the noncompliance of provision of law, weare inclined to accede to the request of stay theimplementation and operation of the assessment orderdated 27.09.2021 till 14.12.2021. 7. Affidavit-in-reply shall be filed in the instant case on orbefore 14.12.2021.” 3.Affidavit-in-reply has been filed for and on behalf of the respondent by the learned senior standing counsel, Mr.VarunPatel, where he has given the chronology ofevents to say that the draft assessmentorder after being approved by the Range Head of the Faceless Assessment Unit wassent to Assessing Officer of FacelessAssessment Unit on 22.09.2021. He submittedthe draft for review to National FacelessAssessment Centre on 23.09.2021. TheAssessing Officer sent the draft assessmentorder to the Assessee on 23.09.2021 bearingthe same date without any notings/remarks.Thereafter, National Faceless AssessmentCentre sent the said draft order to reviewunit on 23.09.2021. After reviewing theorder, the Assessing Officer of Review Unitforwarded the report to Range Head forapproval on 24.09.2021. The Range Head ofReview Unit had approved the review reportand forwarded it to the Assessing Officerof Review Unit on 24.09.2021 and on thesame day Assessing Officer, Review Unitforwarded it to National Faceless Assessment Centre. Assessing Officer ofAssessment Unit received review report fromReview Unit on 24.09.2021 and AssessingOfficer of Assessment Unit forwarded theAssessment Order for approval to Range Headon 24.09.2021. Thereafter, on 27.09.2021the final order, demand notice and penaltynotice have been dispatched. 4. It is admitted that only draft assessment order was served upon theAssessee on 23.09.2021 without fixing anydate for furnishing the reply and the finalshow cause notice availing the opportunityof hearing to the petitioner has not beenserved upon the Assessee. The AssessmentOrder was finalized and submitted forapproval of Range Head on 24.09.2021. Thus,it is clear that as per the provision of Income Tax Act, 1961 under Section 144B(1)(xvi) and 114B(1)(xx)(ii), the final noticealong with the draft assessment order hasnot been served upon the petitioner. 5.This Court has heard the learned senior advocate, Mr.Soparkar along with learnedadvocate, Mr.Bandish Soparkar for the petitioner and learned senior standingcounsel,Mr.VarunPatelfortherespondents-department. 6.Matter has been taken up for finalhearing at a initial stage noticing theclear admission in the affidavit-in-replyon behalf of the respondents. This Court incase of Gandhi Realty (India) PrivateLimited Versus Assistant /Joint/ Deputy/Assitant Commissioner Of Income Tax/ Income Tax Officerrendered in Special Civil Application No.7662 of 2021 hasalready dealt with this issue discussingSection 144B of the Income Tax Act, 1961.If there is any variation prejudicial tothe assessee, final notice with the draft assessment order needs to be served necessarily as per the mandate of thestatute and otherwise the order passed isnon-est as provided under the said provisions itself. The Court in that matter has held thus: 6.Matter has been taken up for finalhearing at a initial stage noticing theclear admission in the affidavit-in-replyon behalf of the respondents. This Court incase of Gandhi Realty (India) PrivateLimited Versus Assistant /Joint/ Deputy/Assitant Commissioner Of Income Tax/ Income Tax Officerrendered in Special Civil Application No.7662 of 2021 hasalready dealt with this issue discussingSection 144B of the Income Tax Act, 1961.If there is any variation prejudicial tothe assessee, final notice with the draft assessment order needs to be served necessarily as per the mandate of thestatute and otherwise the order passed isnon-est as provided under the said provisions itself. The Court in that matter has held thus: “19.However, we direct that the respondent/revenue willbe at liberty to proceed with the assessment process underthe provisions of Section 144B of the Act, as permissibleunder the law obviously after issuance of the prior notice-cum-draft assessment order and on availing an opportunityto the petitioner. The petitioner shall file response and theobjection to the same. Opportunity of hearing if is soughtfor, the same shall be accorded including opportunity ofpersonal hearing. Let the procedure under section 144B ofthe Act be followed by the revenue scrupulously.” 7.In view of the above, present petition is allowed. The impugned order ofassessment and consequent notice of demand isquashedandsetaside.The respondent/revenue will be at liberty to proceed with the process of assessment under the provisions of Section 144B readwith section 144C of the Income Tax Act,1961 as permissible under the law obviouslyafter issuance of the final notice-cum-draft assessment order and on availing an opportunity to the petitioner. The petitioner shall be given the opportunityto prefer response and the objection to thesame, if it so desires. Opportunity ofhearing if is sought for, the same shall beaccorded including opportunity of personalhearing. Let the procedure under section144B read with Section 144C of the Income Tax Act, 1961 be followed by the revenuescrupulously the final order shall be filedas far as possible within a period oftwelve weeks from the date of receipt of acopy of this order. 8.Over and above the regular mode ofservice, direct service is permittedthrough speed post as well as e-mode. (SONIA GOKANI, J) M.M.MIRZA (NISHA M. THAKORE,J)