Mujtaba Marine Private Limited v. Additional/ Joint/ Deputy/ Assitant Commissioner Of Incometax/ Income-Tax Officer

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 7697 of 2021 ========================================================== MUJTABA MARINE PRIVATE LIMITED Versus ADDITIONAL/ JOINT/ DEPUTY/ ASSITANT COMMISSIONER OF INCOMETAX/ INCOME-TAX OFFICER ========================================================== Appearance:MR DARSHAN B GANDHI(9771) for the Petitioner(s) No. 1M R BHATT & CO.(5953) for the Respondent(s) No. 1========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANIandHONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 23/12/2021 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) This is a petition preferred under Article 226 of theConstitution of India For the A.Y 2018-2019 the petitioner hadfiled the return of income on 26.10.2018 by declaring the totalincome as Rs 5,20,690/-. It was processed under Section 143 (1) ofthe Income Tax Act (hereinafter to be referred as “ITAT” Act”)and communicated to the petitioner on 17.4.2019. 2. The notice under Section 143(2) dated 26.9.2019 was issued onthe petitioner and return of the petitioner was selected for scrutinyassessment. 3. On 27.4.2021, a show cause notice was issued to the petitioner proposing to finalise the assessment as per the draft assessmentorder. 4. It further emerges that an adjournment application was soughtby the petitioner seeking 15 days’ of time, on account of thelockdown because of the pandemic due to Covid 19 as it was not feasible for the petitioner to comply with the directions. 5. Instead of responding to the said request of adjournment theassessment order came to be passed under Section 143(3), byholding that the assessee did not respond to the final show causenotice dated 27.4.21 and hence, the respondent had presumed thatthe assessee had nothing to offer in this regard and therefore, theadditions have been made whereby the total amount of Rs7,67,73,664 is treated as bogus purchase and added to the totalincome of the assessee under Section 69( C) of the Income TaxAct. Such income thus is brought to the tax within the meaningSection 115 (B)(D) (E) of the Act and the penalty proceedingsunder Section 270 (A) (C) (1) of the I.T Act has been initiated. 6.This has seriously aggrieved the petitioner as the demandnotice also has also been sent on 10.5.21. He has approached thisCourt by raising the serious grievance of breach of principles ofnatural justice and also for not adhering to the spirit of facelessassessment scheme as under: “14(A) This Hon’ble Court be pleased to call for therecords of the proceedings, look into them and be pleased toissue a writ of certiorari or any other appropriate writ, orderor direction quashing the assessment order passed by therespondent under Section 143(3) r.w.s 144 B of the Act dated10.5.2021 at Annexure H and demand notice under section156 of the Act dated 10.5.2021 at Annexure I (Coll.) andfurther direct the respondent to pass a fresh assessmentorder u/s 143(3) of the Act after providing opportunity offurnishing submissions in response to the show cause ntoicecum draft assessment order at Annexure D and E; B) Pending the hearing and final disposal of theapplication, this Hon’ble Court be pleased to stay operationand implementation of assessment order passed undersection 143(3) r.w.s 144B of the Act dated 10.5.2021 atAnnexure H and demand notice issued u/s 156 of the Act atAnnexure I (Coll.) and further stay the recovery of demand in pursuance of notice issued under section 156 of the Act atAnnexure I. (C ) This Hon’ble Court be pleased to grant any furtherrelief asthis Hon’ble Court deems just and proper in theinterest of justice. (D) This Hon’ble Court be pleased to allow this applicationwith costs against the respondent. “ B) Pending the hearing and final disposal of theapplication, this Hon’ble Court be pleased to stay operationand implementation of assessment order passed undersection 143(3) r.w.s 144B of the Act dated 10.5.2021 atAnnexure H and demand notice issued u/s 156 of the Act atAnnexure I (Coll.) and further stay the recovery of demand in pursuance of notice issued under section 156 of the Act atAnnexure I. (C ) This Hon’ble Court be pleased to grant any furtherrelief asthis Hon’ble Court deems just and proper in theinterest of justice. (D) This Hon’ble Court be pleased to allow this applicationwith costs against the respondent. “ 7. On issuance of notice by this Court, the respondents hasresponded to the same by affidavit-in-reply by the ITO Ms RupaShankar Prasad denying each and every averment. 7.1According to the Revenue, it is not in dispute that thereturn of the petitioner needed the scrutiny, hence, notice underSection 142(1) has been issued calling for the details of theparties and entities from whom the purchases of Rs 11,52,16, 211were made during the A.Y 2018-2019. The first notice was of10.12.2020 with a request to provide the details on or before24.12.2020 and thereafter, the reminders were sent on 28.12.20,5.1.21, 25.2.21, 1.3.21, 22..3.21 which were served upon theassessee and thus, in all , six months’ period was granted to the assessee and he failed to provide these details and therefore, thefinal show cause notice was issued on 27.4.21 fixing the date of compliance on 3.5.21. It is contended further that he since did notreply to the final show cause notice, considering the prevalentsituation, the reply was awaited till 9.5.21 and thereafter, on10.5.21 the assessment was finalised after finding no response onITBA Portal. 7.2 It is denied that any request had been sent by the assesseeon 2.5.2021 in ITBA Portal and therefore, the order underSection143 (3) read with Section 144(B) of the Act was duly passed and no interference, according to the respondents, is desirable. On merits also, much has been argued as to how the listof 32 parties without any email ids is indicative of the fact that the purchase transactions of the petitioner were found to bebogus. It is however, contended that the Court may choose not toenter into the merit of the matter. 8. We have heard extensively learned advocate Mr. DarshanGandhi for the petitioner and learned Senior advocate Mr. ManishBhatt assisted by learned advocate Mr Karan Sanghani for theRevenue. 9.The core question that we are required to address is as towhether there is a mechanism in place to allow the petitioner tomake a request for the adjournment, since, it is a facelessassessment regime. The dispute is with regard to the applicationfor adjournment sent by the petitioner as is reflected in e-filingportal of the Income Tax Department, Government of India andthe true copy of the same is produced by the petitioner whichreflects that such request on 3.5.2021 was made for adjournmentdue to pandemic.(annexure F pg 56). PAN/TAN details Notice SectionDescriptionNotice issue date 143(3) Detailed Reason Respected Sir/Madam, Sub. Request toextend the date of compliance fo the showcause notice dated 27.4.2021 bearingDIN:ITBA/ADT/F/143(3)(SCN)/2021-22/10326988458(1) due to lockdown, in ourcity on account of covid 19 pandemic yourgood self is requested to kindly extend thedate of compliance of the above referred notice fixed on 3.5.2021 for fifteen days.Yours Sincerely for Mujtaba Marin Pvt. Ltd.Sd/- Director. PAN/TAN details Notice SectionDescriptionNotice issue date 143(3) Detailed Reason Respected Sir/Madam, Sub. Request toextend the date of compliance fo the showcause notice dated 27.4.2021 bearingDIN:ITBA/ADT/F/143(3)(SCN)/2021-22/10326988458(1) due to lockdown, in ourcity on account of covid 19 pandemic yourgood self is requested to kindly extend thedate of compliance of the above referred notice fixed on 3.5.2021 for fifteen days.Yours Sincerely for Mujtaba Marin Pvt. Ltd.Sd/- Director. It is not in dispute by the petitioner that he has received allthe notices which had been sent to him on earlier occasions. Inresponse to the notices which has been sent by the department, thereplies sent by the petitioner were on 20.1.2021, 28.1.2021,25.2.2021, 9.3.2021, 12..3.2021. According to the petitionerthereafter 18.3.2021, 25.3.2021. All covering letters have come onrecord and according to learned advocate for the petitioner totalvolume of documents would be more than 700 pages uploaded onthe website of the Income Tax portal. 10. As could be noticed from the affidavit-in-reply filed by therespondent where it has emphatically urged before this Court thatthe assessee failed totally in providing the complete details which have been called for by way of different notices andreminders and final show cause notice was not replied to as welland on considering sympathetically the pandemic situation, a weekfurther was allowed to go and thereafter, the draft assessmentorder has been finalised. This according to the respondent shouldbe construed as sufficiently availed opportunity for the petitioner. 11. In our opinion, the action of the respondent is contrary tothe requirement of the provisions of Section 144(B) the facelessassessment which has been inserted by taxation and laws has been inserted w.e.f 1.4.2021. We need to at the outset to remindthe respondent that 144B(9) provides that notwithstandinganything contained in any other provision of this Act, anassessment made under sub section (3) of Section 143 or Section144 or in cases referred to in subsection 2 (other than the cases transferred under Subsection 8 Section 144 B) on or after firstday of April 2021 shall be nonest, if such assessment is not made in accordance with the procedure laid down under this section. 12. At this stage the reference would also be necessary tosubsection (7) of Section 144 B, more particularly, sub clause (xii)which provides thus :- “(xii) the Principal Chief Commissioner or the Principal Director General, incharge of the National Faceless Assessment Centre shall, with the priorapproval of the Board, lay down the standards, procedures and processes foreffective functioning of the National Faceless Assessment Centre, RegionalFaceless Assessment Centres and the unit set up, in an automated andmechanised environment, including format, mode, procedure and processesin respect of the following, namely:— (a) service of the notice, order or any other communication; (b) receipt of any information or documents from the person in response to thenotice, order or any other communication; (c) issue of acknowledgement of the response furnished by the person; (d) provision of “e-proceeding” facility including login account facility, trackingstatus of assessment, display of relevant details, and facility of download; (e) accessing, verification and authentication of information and responseincluding documents submitted during the assessment proceedings; (f) receipt, storage and retrieval of information or documents in a centralisedmanner; (g) circumstances in which proviso to sub-section (6) shall apply; (h) circumstances in which personal hearing referred to clause (viii) shall beapproved;approved; (i) general administration and grievance redressal mechanism in therespective Centres and units.” (c) issue of acknowledgement of the response furnished by the person; (d) provision of “e-proceeding” facility including login account facility, trackingstatus of assessment, display of relevant details, and facility of download; (e) accessing, verification and authentication of information and responseincluding documents submitted during the assessment proceedings; (f) receipt, storage and retrieval of information or documents in a centralisedmanner; (g) circumstances in which proviso to sub-section (6) shall apply; (h) circumstances in which personal hearing referred to clause (viii) shall beapproved;approved; (i) general administration and grievance redressal mechanism in therespective Centres and units.” 12.1 This provides for the laying down of the standards procedure and process for effective functioning the national facelessassessment, regional faceless assessment and the unit set up andautomated and mechanised environment including the formatmode procedure and processes with the prior approval of theBoard in relation to the circumstances and the personalhearing referred to needs to be approved. The standard operatingprocedure (SOP) for assessment unit under faceless assessmentscheme 2019 as laid down by Principal Chief Commissioner of theIncome Tax national assessment center with the prior approval of Central Board of Direct Taxes, New Delhi on 19.11.2020 has beenplaced before this Court. 12.2 This SOP does not provide for any specific time period either for response or for availing an opportunity for personalhearing. It says that once the notice is sent to the assessee through NEFC with the approval of the unit head of the AO ,response time usually and normally shall be of 15 days, to begiven to the assessee for compliance of the notice under Section 142(1) from the date of issuance of the notice. It is advisable thattime may be reduced to 7 days for subsequent notices, however, this time guidelines must keep in view the period of limitationfor completing the assessment. It does not provide anywhere as toin what manner it should operate and what is the time period tobe given after once the final show cause notice along with thedraft assessment order is served upon the petitioner. It simplyspeaks of the reasonable time period . 13.This Court in case of Gandhi Realty (India) Private Ltd VsAssistant/Joint/ Deputy/ Assistant Commission of Income TaxOffiicer in SCA 7662 of 2021 dated 5.10.2021 has extensivelydealt with the issue of making available the opportunity ofhearing to the parties lest the final assessment shall be renderednon est. Relevant findings and observations read as under :- 7.05 It is pertinent to note that this introduction of facelessassessment under Section 144B has revolutionised the veryregime of assessment in very many ways and at the sametime, there are bound to be certain hiccups whileimplementing and creases also to be ironed out at the levelof department. For the officials and assessee also,acceptance of change, its comprehension andimplementation in true purport is a challenge as well. 7.06. Various issues arise in relation to the implementationof this provision, some due to limitation in comprehension,other for want of requisite training after its introductionand still others are begging the change of mindset. 7.07. This provision starts with non-obstant clause and itwarrants service of notice to the assessee in case ofscrutiny assessment under section 143(3) and 144(2) bereplied to by the assessee in 15 days’ time, after allocationthrough automated system to any Regional FacelessCentre. 7.08. For fulfilling the need of document etc. therequest of an assessment unit from regional faceless centrealso shall be through Faceless Assessment Centre. 7.06. Various issues arise in relation to the implementationof this provision, some due to limitation in comprehension,other for want of requisite training after its introductionand still others are begging the change of mindset. 7.07. This provision starts with non-obstant clause and itwarrants service of notice to the assessee in case ofscrutiny assessment under section 143(3) and 144(2) bereplied to by the assessee in 15 days’ time, after allocationthrough automated system to any Regional FacelessCentre. 7.08. For fulfilling the need of document etc. therequest of an assessment unit from regional faceless centrealso shall be through Faceless Assessment Centre. 7.8.1. Once there is a need to make reference toverification unit or technical unit, it is necessarily to bedone through NFAC only and in absence of any response ofassessee, the NFAC would serve a notice under section 144of the I.T. Act as to why the best judgement assessment benot finalised and still if nor responsive, the concerned unitwhich is allocated the assessment would need to preparedraft assessment order to be sent to NFAC and even wheninformation called for, in clause (xii) have been received,the draft assessment order needs to be prepared with orwithout variations as ends also specifying penalty, if any. 7.09. The National Faceless Assessment Centre shallexamine the draft assessment order in accordance with therisk management strategy specified by the Board, if thereis variation prejudicial to the interest of the assessee, it canfinalise the assessment and serve copy of the order andnotice to the assessee for initiating penalty proceedings, orfor refund of any amount. However, when there is questionof any variation, which may prove to be prejudicial to theinterest of assessee, it is obligated to provide an opportunity to the assessee by serving a notice and callingupon him to show cause as to why proposed variation benot made or it has the third option of sending it back to theRegional Faceless Assessment Centre for conductingreview of such order; 7.10. It is quite clear from the very provision that theassessee is required to be provided an opportunity oncethere is a possibility of any variation which may turnprejudicial to the interest of the assessee. What is expectedof the NFAC is to serve a notice calling upon the assesseeto show cause as to why the proposed variation be notmade. This has to be done by furnishing Draft AssessmentOrder along with show cause notice. I It is in other words, statutory obligation of the NFAC is toserve upon the assessee the show cause notice along withthe draft assessment order for the assessee to be availedthe opportunity with regard to the variation proposed. Itgoes without saying that calling upon the assessee asprovided under clause (v) or (vi) or (viii) and availingopportunity thereunder or its failure to utilise suchopportunity or its failure to response would not permitNFAC or any authority to finalize the assessment oncethere is a variation proposed, prejudicial to the interest ofthe assessee. 7.11. With the advent of technology and with resorting tovirtual mode, more meticulous conduct is expected from allconcerned. Technology has made it extremely easy theaspect of service of notice, order, draft order etc. and herein Faceless Regime, placing in assaessee’s registeredaccount, sending to the e-mail or uploading in mobile APP,is a due service which can never be missed and its trail iseasily found, therefore, service or non-service also is nolonger an issue and the time and place of dispatch andreceipt of electronic record is detained in accordance withthe provisions of section 13 of the Information TechnologyAct, 2000.. 7.11. With the advent of technology and with resorting tovirtual mode, more meticulous conduct is expected from allconcerned. Technology has made it extremely easy theaspect of service of notice, order, draft order etc. and herein Faceless Regime, placing in assaessee’s registeredaccount, sending to the e-mail or uploading in mobile APP,is a due service which can never be missed and its trail iseasily found, therefore, service or non-service also is nolonger an issue and the time and place of dispatch andreceipt of electronic record is detained in accordance withthe provisions of section 13 of the Information TechnologyAct, 2000.. 7.12. Sub-section (9) of section 144B clearly provides thatthe assessment would be non-est if the said provision is notfollowed procedurally on or after 01.04.2021. This depictsa clear legislative intent that every step and stage ofprocedural requirement of this provision is needed to beregarded with matching seriousness. 8. The Orissa High Court in the case of Sribasta KumarVersus Union of India and another in WP © No.29279 of2021, was examining the issue where principal ground onwhich the assessment order had been challenged that was,that the mandatory requirement under section 144B of theAct has not been complied with prior to issuance of the assessment order, wherein the Court held thus: “5. It isobvious that in the present case the impugned assessmentorder was passed without communicating to the Petitionerany draft order of assessment under Section 144B of the ITAct. 6. In view of the clear legal position explained in theabove judgments, on the above short ground this Courtsets aside the impugned order of assessment dated 8thSeptember, 2021 of the NFAC as well as all consequentialnotices/orders. The Court nevertheless grants liberty to theDepartment to pass a fresh assessment order for the AY2017-18 after complying with the requirement of the lawby giving the Petitioner a personal hearing at a date andtime, which should be communicated to the Petitionersufficiently in advance. It is needless to say that thePetitioner assessee will cooperate in the fresh assessmentproceedings and furnish all the documents and informationas are available with it relevant to the proceedings.” 9. The Delhi High Court in W.P.(C) 5849/2021 in the caseof Gurgaon Realtech Limited versus National FacelessAssessment Centre Delhi (Earlier national EassessmentCentre Delhi), delivered on 04.06.2021 was considering theidentical issue where challenge to the assessment orderwas passed on the ground of the same having been passedwithout jurisdiction. Following are the findings andobservations which deserve reproduction. “9. We have considered the submissions made by thelearned counsel for the parties. 9.1. To our minds, if the challenge to the assessment orderis made on the ground that it was passed withoutjurisdiction, then, notwithstanding the fact that an appealwas filed, albeit, only to ensure that the limitation is notcrossed, is not an impediment in proceeding ahead withthe matter. In this particular case, the reason that we areproceeding ahead with the matter, is that, we arepersuaded by the arguments advanced by Mr. Vohra thatthe impugned assessment order dated 15.04.2021 couldnot have been passed under Section 143(3A) and 143(3B)after March 31, 2021, having regard to the provisions ofSection 143(3D) of the Act. For the sake of convenience.the said provisions are extracted below: "Section 143.Assessment XXXXXX (3A) The Central Government may make a scheine, bynotification in the Official Gazene, for the purposes ofmaking assessment of total income or loss of the assesserunder sub-section (3) so as to impart greater efficiency,transparency and accountability by (a) climinating the interface between the Assessing Officerand the assessee in the course of proceedings to the extent (3A) The Central Government may make a scheine, bynotification in the Official Gazene, for the purposes ofmaking assessment of total income or loss of the assesserunder sub-section (3) so as to impart greater efficiency,transparency and accountability by (a) climinating the interface between the Assessing Officerand the assessee in the course of proceedings to the extent technologically feasible: th) opumising utilisation of theresources through economics of scale and functionalspecialisation (c) introducing a team-based assessment with dynamicjurisdiction. (3B) The Central Government may, for the purpose ofgiving effect to the scheme made under subsection (3A), bynotification in the Official Gazette, direct that any of theprovisions of this Act relating to account of total income orloo shall not apply or shall apply with such exceptions,modifications and adaptations as may be specified in thenotification Provided that no direction shall be issued afterthe 31st day of March, 2021, XXX (3D) Nothing contained in sub-section (3A) and sub-section (3B) shall apply to the assessment made under sub-section (3) or under section 144, as the case may be, on orafter the 1st day of April, 2021) 9.2. Besides this, Mr. Vohra is also right in his contentionthat the CBDT notification dated 31.03.2021, to which, wehave made a reference. hereinabove, also says, in effect,the same thing, i.c., that after 01.04.2021, the assessmentorder could have only have been passed in consonancewith the provisions of Section 144B of the Act. 10. In view of the foregoing reasons, we are inclined to setaside the impugned assessment order dated 15.04.2021 asalso the notice of demand issued under Section 156 of theAct and the notice for initiating penalty) proceedingsissued under Section 274 read with Section 270A of theAct. 10.1. That being said, the respondent/revenue will haveliberty to proceed with the assessment process, albeit,under the provisions of Section 144B of the Act. Needlessto add, if a show cause notice-cum-draft assessment orderis served on the petitioner, an opportunity would be givento the petitioner to file its response/objections to the same.Furthermore, if there is a variation proposed in the incomeof the petitioner, an opportunity of personal hearing willalso be accorded. In sum, the procedure prescribed underSection 144B of the Act will be followed by the respondent/revenue.” 10. The Delhi High Court in the case of in W.P.(C)6662/2021 in the case of Rani Promotors Private RotomoterPvt. Ltd. Versus Additional Commissioner of Income Tax on19th July, 2021 also considered the same question. Thecourt availing an opportunity of hearing be set aside theimpugned order which was passed availing suchopportunity. Relevant paragraphs of the aforesaid decisions read thus: “ 12. In any event, this issue is no longer res integra as aCoordinate Bench of this Court in Gurgaon RealtechLimited v. National Faceless Assessment Centre Delhi,W.P. (C) 5849/2021 has held that the Assessment Ordercould not have been passed under Section 143(3A) and143(3B) of the Act by the Revenue after 31st March, 2021having regard to Section 143(3D) of the Act. 13. This Court also agrees with the submissions of thelearned counsel of the Petitioner that there was failure onthe part of the Respondents to comply with the mandatoryobligation laid down in Section 144B (1) (xvi) of the Act inasmuch as there wasnon-service of prior notice and draft assessment order. Therelevant portions of Section 144B xvi (a) and (b) as well asSection 144B(9) of the Act are reproduced hereinbelow: 13. This Court also agrees with the submissions of thelearned counsel of the Petitioner that there was failure onthe part of the Respondents to comply with the mandatoryobligation laid down in Section 144B (1) (xvi) of the Act inasmuch as there wasnon-service of prior notice and draft assessment order. Therelevant portions of Section 144B xvi (a) and (b) as well asSection 144B(9) of the Act are reproduced hereinbelow: "144B. (1) Notwithstanding anything to the contrarycontained in any other provisions of this Act, theassessment under sub section (3) of section 143 or undersection 144, in the cases referred to in sub-section (2),shall be made in a faceless manner as per the followingprocedure, namely: (xvi) the National Faceless AssessmentCentre shall examine the draft assessment order inaccordance with the risk management strategy specified bythe Board, including by way of an automated examinationtool, whereupon it may decide to - (a) finalise the assessment, in case no variation prejudicialto the interest of assessee is proposed, as per the draftassessment order and serve a copy of such order andnotice for initiating penalty proceedings, if any, to theassessee, along with the demand notice, specifying the sumpayable by, or refund of any. amount due to, the assesseeon the basis of such assessment; or (b) provide anopportunity to the assessee, in case any variationprejudicial to the interest of assessee is proposed, byserving a notice calling upon him to show cause as to whythe proposed variation should not be made; or assign thedraft assessment order to a review unit in any one RegionalFaceless Assessment Centre, through an automatedallocation system, for conducting review of such order. (9) Notwithstanding anything contained in any otherprovision of this Act, assessment made under sub-section(3) of section 143 or under section 144 in the casesreferred to in sub-section (2) [other than the cases transferred under subsection (8)],on or after the 1st day of April, 2021, shall be non est ifsuch assessment is not made in accordance with theprocedure laid down under this section." (emphasis supplied) 14. Keeping in view the aforesaid, this Court is of theopinion that learned counsel for the petitioner is correct insubmitting that Section 144B of the Act had been violatedand the assessment proceeding had been completed in thepresent case in violation of the principles of natural justice. 15. Consequently, this Court sets aside the impugnedassessment order dated 06th April, 2021 as also the noticeof demand issued under Section 156 of the Act and thenotice for initiating the penalty proceedings under Section274 read with Section 270A of the Act. 11. Reverting to the facts of the case on hand, we couldnotice from the chronology of the events presented beforeus by the respondent authority that the return of thepetitioner Company was selected for scrutiny and notice u/s 143(2) of the Act was issued on 22.09.2019. Date ofhearing was fixed on 07.10.2019. Various responses havebeen given by the petitioner. It also sought time and reviewwas also filed. Opportunity for filing reply and furnishingthe document was granted. The assessee was also informedon 15.10.2020 about transfer of proceedings to the NFACand notice was also issued to the assessee by the RegionalReassessment Centre on 04.01.2021 u/s. 142(1) of the Act.Notice of NFAC to the petitioner was issued on 03.02.2021under section 142(1) of the Act. 11. Reverting to the facts of the case on hand, we couldnotice from the chronology of the events presented beforeus by the respondent authority that the return of thepetitioner Company was selected for scrutiny and notice u/s 143(2) of the Act was issued on 22.09.2019. Date ofhearing was fixed on 07.10.2019. Various responses havebeen given by the petitioner. It also sought time and reviewwas also filed. Opportunity for filing reply and furnishingthe document was granted. The assessee was also informedon 15.10.2020 about transfer of proceedings to the NFACand notice was also issued to the assessee by the RegionalReassessment Centre on 04.01.2021 u/s. 142(1) of the Act.Notice of NFAC to the petitioner was issued on 03.02.2021under section 142(1) of the Act. 12. It appears from the assessment order which is claimedto have been placed for transfer on 08.04.2021 and averredto have been served upon the assessee under thecommunication dated 12.04.2021, is missing on the WebPortal of the Income Tax Department. Assessment orderissued u/s 144B of the Act on 20.04.2021 along with theDemand Notice have been served upon the petitioner.Barring the Draft Assessment Order, rest of all thedocuments are already found on the web portal of therespondent department. 13. It would be apt to refer to sub-sections (5) and (6) ofsection 144B, which provide that all communicationsamong the assessment unit, review unit, verification unit ortechnical unit or with the assessee or any other personwith respect to the information or documents or evidenceor any other details, as may be necessary for the purposesof making a faceless assessment shall be through theNational Faceless Assessment Centre and allcommunications between the National FacelessAssessment Centre and the assessee, or his authorisedrepresentative, or any other person shall be exchangedexclusively by electronic mode; and all internal communications between the National FacelessAssessment Centre, Regional Faceless Assessment Centresand various units shall be exchanged exclusively byelectronic mode. The proviso would not be necessary to bediscussed at this stage which concerns inquiry orverification conducted by the verification unit. 14. Sub-sections (7) of section 144B provides that for thepurposes of faceless assessment an electronic record shallbe authenticated by the National Faceless AssessmentCentre by affixing its digital signature and by assessee orany other person, by affixing if required his digitalsignature if he is required under digital signature. 15. Sub-section (2) of section 114 (B) says that every noticeor order or any other electronic communication shall bedelivered to the addressee, being the assessee, by way ofplacing an authenticated copy thereof in the assessee’sregistered account; or by sending an authenticated copythereof to the registered email address of the assessee orhis authorised representative; or uploading anauthenticated copy on the assessee’s Mobile App. Thus,there is specific requirement for service by electronic modeand in absence of placing before this Court any proof ofvirtual exchange or authenticated copy of service to theassessee, there is no reason for this Court to accept theversion of the respondent about the service. 16. We are in total disagreement with the revenue that onaccount of issuance of notice u/s. 143(2) dated P22.09.2019and opportunities provided earlier to the assessee,acceding to his request would be a mitigating circumstanceso far as non-service of the Draft Assessment Order isconcerned. The opportunity of furnishing the documentsand hearing which has been given time and again andrequests acceeded to by the authority to the assessee atthat stage would not eventually culminate into furnishingof the final assessment order without service of prior noticealong with draft assessment order, if any additions aremade to the prejudice of the assessee. 16. We are in total disagreement with the revenue that onaccount of issuance of notice u/s. 143(2) dated P22.09.2019and opportunities provided earlier to the assessee,acceding to his request would be a mitigating circumstanceso far as non-service of the Draft Assessment Order isconcerned. The opportunity of furnishing the documentsand hearing which has been given time and again andrequests acceeded to by the authority to the assessee atthat stage would not eventually culminate into furnishingof the final assessment order without service of prior noticealong with draft assessment order, if any additions aremade to the prejudice of the assessee. 17. It is a statutory requirement, as discussed hereinabove, moreparticularly when any assessment order is to be made which islikely to be prejudicial to the interest of the assessee. NFAC ifwould have served upon the assessee the draft assessment order,its presence on web portal would invariably there. In virtualregime, noticing of or presence or absence of trail of action is nota herculian task. Thus, in absence of any proof, the version of therespondent simply cannot be accepted. We could further noticefrom the documents which have been furnished by the petitioner that authenticated copy of notice/ order is not served to thepetitioner when otherwise all other documents on the web portalof the income tax department are existing. We have soughtassistance from the learned advocate of both the sides to pointout to us due service of the draft assessment order, as has beenclaimed by the respondent, however, the said order dated12.04.21 has been duly served to the petitioner, show causenotice which is claimed to have been issued along with the draftassessment order are surely missing. This being a simple case ofstatutory non-compliance of the provision, the same wouldamount to breach of not only principles of natural justice, butalso, of the action in complete disregard to the statutoryprovision. And therefore, the order of the respondent passedwithout following the mandate given by the statute under section144B of the Act deserves to be interfered with by quashing andsetting aside the same.”. 14.In the instant case, as could be noticed from the requestwhich has been made by the petitioner on 2.5.2021, it is arequest for 15 days’ time due to the lock down in the city onaccount of covid 19. It was an unprecedented time and the secondwave was already in progress. Not only the circular which has beenissued provides for a reasonable time and eventhough it does notspecify the time period, it is always the discretion of the authorityconcerned to consider such request. More particularly, wheneven the statutory time limit had already been extended by theApex Court by virtue of its extraordinary jurisdiction for thelarger cause of serving the citizens at the pandemic time. It wasnot unreasonable on the part of the assessee concerned to makea request for 15 days’ of time on 2.5.2021 and it is also noticeableto refer at this juncture that after the receipt of last notice, suchrequest was made within the 7 days of last final notice servedupon the petitioner along with the draft assessment order. TheSOP provides for grant of 15 days’ time for initial notice, and forsubsequent noticed a period of 7 days’, the request foradjournment on behalf of the petitioner had come within 7 days and hence, that ought to have been considered by the authorityconcerned instead of finalising the assessment by making a hugeaddition. It could have surely availed the opportunity of hearing tothe party as was requested for noticing unprecedented period ofpandemic and also respecting the SOPs prepared by thedepartment itself. and hence, that ought to have been considered by the authorityconcerned instead of finalising the assessment by making a hugeaddition. It could have surely availed the opportunity of hearing tothe party as was requested for noticing unprecedented period ofpandemic and also respecting the SOPs prepared by thedepartment itself. 15.We are conscious of the fact that the respondent has alsoproduced before this Court the auto generated order sheet whichdoes not reflect this application for adjournment, however, thefact is not denied that on e-filing portal of Income TaxDepartment, the request was sent on 2.5.2021 and the same isreflected clearly. Neither in the affidavit-in-reply nor thereafter byany mode, this has been disputed by the respondent. Evenotherwise, once this has been uploaded on the portal of thedepartment itself, there is no reason in any manner to question thissending of the request by the petitioner who has also stated onoath and that factum is once having clearly established, the non-reflection of the same on the automated generated order sheetwill have no bearing on the entire issue. It is ultimately beingmaintained by the department itself and it is for it to questionitself as to why this communication has not been reflected. Oncethe department gears up to promote the objective of facelessregime, it also is required to have a matching pace fortechnological advancements and any glitch if has adverse impacton the individual assessee, the same deserves judicious and fairerapproach on the part of the department. Even when suchprejudice is unintended nevertheless when it is a matter of fact, itdeserves to be fairly rectified. 16.According to learned advocate Mr. Gandhi appearing for thepetitioner the change in the software with updating of the same with the version at 2.01, may be one of the reasons why thisorder sheet has not been updated and the website is notreflecting the documents. There is no instruction received by thelearned senior counsel appearing for the department. We do notneed to venture into as to how the technically upward versionhas resulted into the non-reflection of the documents which runinto 700 pages nearly. The only aspect that can be deduced fromthe material which has been placed before the departmentbecause of certain technicalities and technical glitch did not cometo the notice of the department and when only mode available forany assessee is to approach the officer is through the portal, oncesuch request is made, onus would surely be of the respondent toacknowledge. Before this Court, the SOPs meant for theassessment unit under the faceless regime have not been placedand it can be held without any semblance of doubt that they havenot been adhered to in the manner was required. Thus, as therequest for hearing of the adjournment is not considered, muchless granted in the situation which prevailed, this amounts toserious prejudice caused to the petitioner. 17.In a faceless regime, the aim is to bring transparency andobjectivity through non accessibility of assessing officer which isa welcome step, brought about with a laudable objective.However, faceless regime cannot be allowed to become ear lessregime. What is needed to be done had the regular procedure ofassessment been followed, the same would apply to facelessassessment, and had such application been received in a pandemicperiod like the one which prevailed, grant of adjournment wouldhave been debateless. This entire regime has been brought to thestatute to curb certain undesirable weaknesses and strengthenthe system, with complete transparency with the help oftechnology, however, the same should not and could not have putthe assessee to any king of jeopardy where they would have nowhever to turn to. And therefore, we deem it appropriate sincethe final assessment has been passed in a complete breach ofnon-availment of the principles of natural justice and non-availmentof opportunity of furnishing the submissions in response to thefinal show cause notice when the draft assessment which hasresulted into huge addition in the assessment finalised, we quashthe order dated 10.5.2021 and also the demand notice underSection 136 considering the legal infirmity the impugned ordersuffers. The Court would also deem it appropriate to relegate thepetitioner to the stage where this has resulted into causinginjustice to the assessee. 18.As show cause notice has already been served and replied toby the assessee till March 2021 and issue is in relation to thelast and final show cause notice served upon the petitioner alongwith the draft assessment order, let the time of two weeks begiven to the assessee from the date of receipt of the copy. Thesame shall be responded to along with the accompanieddocuments and then the assessment order shall be finalisedfollowing the due procedure. 19.The petitioner if chooses to seek the personal hearing thesame shall be accorded in accordance with law. None of thefindings and observations shall have any adverse impact on thecase of either side and we have chosen not to opine anything onmerit at all. (SONIA GOKANI, J) (NISHA M. THAKORE,J)