Kumaravel Muthiah Mallika v. The Additional/Joint/Deputy/Asst.commissioner Of Income Tax/ Income Tax Officer, National Faceless Assessment Centre, Income Tax Department, Ministry Of Finance

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 07.12.2021 CORAM THE HONOURABLE MR.JUSTICE C.SARAVANAN W.P.Nos.25403 & 25406 of 2021and W.M.P.Nos.26826, 26827, 26828, 26830, 26831 & 26832 of 2021 (Through Video Conferencing) 1.Vellaian Selvaraj ...Petitioner in W.P.No.25403 of 2021 2.Kumaravel Muthiah Mallika...Petitioner in W.P.No.25406 of 2021 Vs 1. The Additional/Joint/Deputy/Asst.Commissioner of Income Tax/ Income Tax Officer, National Faceless Assessment Centre, Income Tax Department, Ministry of Finance, Room No.401, 2[nd] Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi - 110 003. 2. The Income Tax Officer, Ward 3, No.2, Barracks Cross Street, Officers Line, Vellore - 632 001. ...Respondents in both W.Ps Prayer in W.P.No.25403 of 2021: Petition filed under Article 226of the Constitution of India to issue a Writ of Certioraricalling for the records of the first respondent herein inAssessment Proceedings in PAN NO. for the AssessmentYear 2019-2020 and quash the Impugned Order DIN:ITBA/AST/S/143(3)/2021-2022/1035774105(1) dated 21.09.2021 passed by the firstrespondent for the Assessment Year 2019-2020, when in letter dated 26.08.2021 by the first respondent has duly admitted thefact that he has no jurisdiction to pass the impugned order. Prayer in W.P.No.25406 of 2021: Petition filed under Article 226of the Constitution of India to issue a Writ of Certiorari,calling for the records of the first respondent herein inAssessment Proceedings in PAN No. for the AssessmentYear 2019-2020 and quash the Impugned Order DIN:ITBA/AST/S/143(3)/2021-2022/1036005759(1) dated 29.09.2021 passed by the firstrespondent for the Assessment Year 2019-2020, when in letterdated 26.08.2021 by the first respondent has duly admitted thefact that he has no jurisdiction to pass the impugned order. Mr.Prabhu Mukund Arun Kumar, learned Junior Standing Counseltakes notice on behalf of the respondents. 2. These writ petitions have been filed by the petitionersagainst the impugned Assessment Orders dated 21.09.2021 and29.09.2021 for the Assessment Years 2019-2020. The petitionershave challenged the impugned Assessment Orders primarily on theground that the assessment by the National Faceless AssessmentCentre is contrary to the Board circular in CircularNo.225/61/2021/ITA-II dated 10.06.2021. 3.It is submitted that the National Faceless AssessmentCentre by a communication dated 26.08.2021 had also clarifiedthat the case has to be transferred back to the JurisdictionalAssessing Officer as the assessment emanated from a searchproceedings under Section 133A of the Income Tax Act, 1961. 4. The second round of attack on the impugned AssessmentOrders are that after the petitioners were issued with a ShowCause Notices dated 16.09.2021, the petitioners sent a detailedreply on 20.09.2021 within the time stipulated therein.However, the impugned Assessment Orders have been passed by thefirst respondent by merely reproducing the reply with oneaddition by simply stating that the reply of the petitionerswere not satisfactory. It is submitted that the orders arenon-speaking and are therefore liable to be quashed. 4. The second round of attack on the impugned AssessmentOrders are that after the petitioners were issued with a ShowCause Notices dated 16.09.2021, the petitioners sent a detailedreply on 20.09.2021 within the time stipulated therein.However, the impugned Assessment Orders have been passed by thefirst respondent by merely reproducing the reply with oneaddition by simply stating that the reply of the petitionerswere not satisfactory. It is submitted that the orders arenon-speaking and are therefore liable to be quashed. 5. Opposing the prayer, the learned Junior Standing Counselfor the respondents submits that the assessment is not purelybased on the documents that were impounded from the petitionersand that the petitioners had also not raised any objection as tojurisdiction of the National Faceless Assessment Centre to passan Assessment Order in response to the Show Cause Notice dated16.09.2021. The learned Additional Government Pleader furthersubmits that the petitioners are also acquiesced into theaforesaid proceedings by filing a reply on 20.09.2021. It isfurther submitted that the petitioner has also filed statutoryappeal on 20.10.2021 before the Appellate Commissioner underSection 246A of the Income Tax Act, 1961 and therefore on thiscount also the petitioners cannot maintain these writ petitionsas the petitioners have decided to rightly opted for analternate remedy before the Appellate Commissioner which is alsoan efficacious remedy under the Income Tax Act, 1961. 6. By way of rejoinder, the learned counsel for thepetitioners submits that the power of the Appellate Commissionerto remit the case back has been taken away under the Income TaxAct and therefore the petitioners will be prejudiced. Thepetitioners were driven to file an appeal before the AppellateCommissioner considering the fact that the limitation wasexpiring. 7.Heard the learned counsel for the petitioners and thelearned Junior Standing Counsel for the respondents. I haveperused the impugned Assessment Orders and the Board circularcited by the learned counsel for the petitioners and theprovisions of the Income Tax Act, 1961. 8.The respondents are bound to complete the assessment in atime bound manner and therefore they passed the impugnedAssessment Orders. However while passing the impugned AssessmentOrders, there is no discussion in the impugned AssessmentOrders. 9. The impugned Assessment Orders merely reproduces thecontent of the respective reply. There is no discussion in theimpugned Assessment Orders to support the conclusion in theimpugned Assessment Orders. Only a conclusion has been given inthe impugned Assessment Orders that the reply filed by therespective petitioners were not satisfactory. This is notsufficient. The impugned Assessment Orders thus passed are non-speaking orders and are therefore liable to be quashed for freshconsideration by the first respondent to pass a speaking order.Though the assessment through National Faceless AssessmentCentre is both novel and welcome and was intended to weed outthe malaise that plagued the earlier system, the procedureadopted under the Faceless Assessment has left very little time for both the assessees and the Assessing Officer to respond tothe Show Cause Notices. 10. While, the assessees are driven to respond to the ShowCause Notices/the Draft Assessment Orders within few days fromthe date of receipt of Show Cause Notices, the AssessingOfficers are also expected to pass orders almost immediately. 11. The time given for the Assessing Officer in the NationalFaceless Assessment Centre to pass a well-reasoned and aspeaking orders appears to be hardly sufficient. Invariably,these proceedings are taken up at the fag end of the limitationas a result of which non-speaking orders and prone to challengeunder Article 226 of the Constitution of India. for both the assessees and the Assessing Officer to respond tothe Show Cause Notices. 10. While, the assessees are driven to respond to the ShowCause Notices/the Draft Assessment Orders within few days fromthe date of receipt of Show Cause Notices, the AssessingOfficers are also expected to pass orders almost immediately. 11. The time given for the Assessing Officer in the NationalFaceless Assessment Centre to pass a well-reasoned and aspeaking orders appears to be hardly sufficient. Invariably,these proceedings are taken up at the fag end of the limitationas a result of which non-speaking orders and prone to challengeunder Article 226 of the Constitution of India. 12. It is evident that the Assessing Officers hardly getenough time to go through the case file to pass a proper andwell-settled considered Assessment Order. Instances of orderbeing passed without proper consideration of all the facts areincreasing and results in mechanical orders which prone tochallenge under Article 226 of the Constitution of India. 13. Both the Assessees and the Assessing Officers are undertremendous pressure to meet deadlines as the Show Cause Noticesitself are being issued at the fag end of the limitation.Therefore, the assessment procedure needs to be strengthened bygiving adequate time both to the assessees and the AssessingOfficer who are assigned to pass Assessment Order under theNational Faceless Assessment Regime. 14. This needs to be addressed by the authorities who areimplementing the Faceless Assessment. This may be suitablyaddressed by the authorities and the system is strengthened sothat both the assessees and the Assessing Officer get adequatetime in the assessment proceedings. 15. Considering the fact that the impugned Assessment Ordershave been passed without any discussion, these Writ Petitionsare allowed by remitting the case back to the National FacelessAssessment Centre to pass a fresh order within a period of sixtydays based on the reply filed by the petitioners even though thepetitioners had filed statutory appeal under Section 246A of theIncome Tax Act, 1961 before the Appellate Commissioner. 16. The respondents are directed to fix a hearing throughvideo conferencing and also instruct the Administrator of theWeb Portal to permit the petitioners time to file additionalreply/representations, if any, before fresh orders passed. 17.This exercise shall be carried out by the respondents within a period of thirty days from the date of receipt of acopy of this order. The issue relating to the jurisdiction ofthe respondents is also left open to be canvassed by thepetitioners before the first respondent. No costs. Consequently,connected Writ Miscellaneous Petitions are closed. Sd/- Assistant Registrar(CS-VIII) //True Copy// arb/nst Sub Assistant Registrar To 1. The Additional/Joint/Deputy/Asst.Commissioner of Income Tax/ Income Tax Officer, National Faceless Assessment Centre, Income Tax Department, Ministry of Finance, Room No.401, 2[nd] Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi - 110 003. Income Tax Officer, National Faceless Assessment Centre, Income Tax Department, Ministry of Finance, Room No.401, 2[nd] Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi - 110 003. 2. The Income Tax Officer, Ward 3, No.2, Barracks Cross Street, Officers Line, Vellore - 632 001. Ward 3, No.2, Barracks Cross Street, Officers Line, Vellore - 632 001. +2cc to Mr.Arun Kurian Joseph, Advocate, S.R.No.65060 & 65061 +1cc to M/s.Hema Muralikrishnan, Advocate, S.R.No.25403 BS(CO)RGA(20/12/2021) andW.M.P.Nos.26826, 26827, 26828,26830, 26831 & 26832 of 2021