Sca/7477/2021 Of Agrawal Jmc Joint Venture v. Assistant / Joint / Deputy / Assistant Commissioner Of Income Tax/Income Tax Officer

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/SPECIAL CIVIL APPLICATION NO. 7477 of 2021 FOR APPROVAL AND SIGNATURE: HONOURABLE MS. JUSTICE SONIA GOKANI andHONOURABLE MR. JUSTICE RAJENDRA M. SAREEN ==========================================================1Whether Reporters of Local Papers may be allowedYESto see the judgment ?2To be referred to the Reporter or not ?YES3Whether their Lordships wish to see the fair copyNOof the judgment ?4Whether this case involves a substantial questionNOof law as to the interpretation of the Constitutionof India or any order made thereunder ?==========================================================AGRAWAL JMC JOINT VENTURE VersusASSISTANT / JOINT / DEPUTY / ASSISTANT COMMISSIONER OFINCOME TAX/INCOME TAX OFFICER ==========================================================Appearance:MR B S SOPARKAR(6851) for the Petitioner(s) No. 1MRS MAUNA M BHATT(174) for the Respondent(s) No. 1========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANIandHONOURABLE MR. JUSTICE RAJENDRA M. SAREEN Date : 11/10/2021 ORAL JUDGMENT (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1.The petitioner is before this Court under Article 226 of the Constitution of India challenging the order passed by the respondent under Section 143(3) of the Income Tax Act, 1961 (‘the Act’ hereinafter) dated 21.04.2021 assessing the incomeofthepetitionerat Rs.107,42,69,470/- for the Assessment Year 2018-2019 on the ground that the same beingan act which is bad, arbitrary, illegal andcontrary to the law. 2.The facts in the capsulized form are asfollow: 2.1The petitioner is a joint venture and is in the business of the infrastructure projects mainly involved forthe construction of highway. C/SCA/7477/2021 JUDGMENT DATED: 11/10/2021 2.2The petitioner filed its return of income for the Assessment Year 2018-2019 on 26.07.2018 at Rs.Nil. His case was processed under Section 143(1) of the Income Tax Act, 1961 by the CPC, Bangalore and on 05.11.2019 assessed the total incomeat Nil. 2.3 It is averred that his case was selected for limited scrutiny to examinetwo issues and notices had been issued under Section 143(2) and 143(1) on22.09.2019 and 30.01.2020 respectively. The show cause notice was as to why theaddition should not be made in respect of the interest income to the tune of Rs.35,20,89,796/- and a contract receipt amount of Rs.72,21,79,676/- from the National Highway Authority of India (‘the NHAI’ for short) received during the year under consideration. According to the petitioner, these were not income but theadvances contingent upon the final decisionof the Delhi High Court. 2.4According to the petitioner, in disregard to the submission as well as thedecision of the Apex Court, the respondentpassed the impugned assessment order addingthe income as mentioned above under Section144 (3) r/w Section 144B of the Act. 2.5The petitioner has questioned the action of the respondent on the ground ofnon-observance of principle of natural justice. A letter was sent by the petitioner to the Assessing Officer on07.04.2021 requesting for a personal hearing, however, the same was not granted without any cogent reasons and therefore,also request is made for indulgence. 2.6The petitioner has also on the ground of hardship and irreparable loss urged to quash the impugned order since thedemand raised is of Rs.50,91,15,240/-. 2.7According to the petitioner, the principle of alternative remedy also would not operate which is a self imposed restriction. Since the binding precedentshave not been followed and the principlesof natural justice also have not been observed, it is not necessary for the petitioner to exhaust the alternative justice. A letter was sent by the petitioner to the Assessing Officer on07.04.2021 requesting for a personal hearing, however, the same was not granted without any cogent reasons and therefore,also request is made for indulgence. 2.6The petitioner has also on the ground of hardship and irreparable loss urged to quash the impugned order since thedemand raised is of Rs.50,91,15,240/-. 2.7According to the petitioner, the principle of alternative remedy also would not operate which is a self imposed restriction. Since the binding precedentshave not been followed and the principlesof natural justice also have not been observed, it is not necessary for the petitioner to exhaust the alternative remedy, but, it can challenge thisillegality directly under Article 226 of the Constitution of India. 3.Prayers sought for in this petition are as follow: “7… (a)quash and set aside the impugned order atAnnexure-’A’ to this Petition; (b)pending the admission, hearing and final disposal of this petition,to stay implementation and operation of theorder at Annexure-’A’ to this petition and stay recoveryof tax for A.Y. 2018-19; (c)any other and further relief deemed just and properbe granted in the interest of justice; (d)to provide for the cost of this petition.” 4.This Court issued the notice on 15.06.2021. The Court on 29.06.2021 had called for the draft order dated C/SCA/7477/2021 JUDGMENT DATED: 11/10/2021 04.04.2021, which had been brought on the record. 5.Affidavit-in-reply by the respondenthas come from the Income Tax Officer, Ward-3(3)(1), Ahmedabad denying all avermentsraised in this petition. According to therespondent, if the petitioner is aggrievedby the Assessment Order, the alternativeefficacious remedy is available by way ofan Appeal to the CIT (Appeal) andthereafter, to the Appellate Tribunal asthe statutory forum is created for redressal of the grievance, the writpetition is not to be entertained relyingon the decision of the Apex Court renderedin case of CIT VS. Chhabildas Agrawal,reported in 357 ITR 357. It isthis deniedthat there has been any violation ofprinciples of natural justice. 5.1 It is specially denied that despite the specific request for a personal hearingon 07.04.2021, no personal hearing ingranted. What is requested in continuationto the reply dated 06.04.2021 is that ifthe respondent is not satisfied with theexplanation of the petitioner, then thepetitioner be provided video conferencingoption to discuss the issue. 5.2 It is a contention of the respondent that the opportunity of hearingthrough video conferencing could not beafforded to the petitioner on account offailure on the part of the petitioner tosubmit such request as per the guidelinesfor personal hearing.5.3The NFAC, New Delhi had issued theStandard Operating Procedure (SOP) for Assessment Unit,Verification Unit, Technical Unit and Review Unit under the Faceless Assessment Scheme, 2019 on 19.11.2020. The guidelines have beencirculated through the video conferencing issued by the NFAC through e-mail dated 13.04.2021 and the steps have been described. No such request for personal hearing as per the steps as detailed in this reply have been made although, the option for personal hearing through video conferencing was activated in the work list on the date of show cause notice dated04.4.2021. For preferring the personal hearingthroughvideoconferencing appropriate hyperlink is available in the e-filing portal every time the show cause notice is issued. Therefore, furnishing the written reply to show cause notice on 07.04.2021 without clicking on Faceless Assessment Scheme, 2019 on 19.11.2020. The guidelines have beencirculated through the video conferencing issued by the NFAC through e-mail dated 13.04.2021 and the steps have been described. No such request for personal hearing as per the steps as detailed in this reply have been made although, the option for personal hearing through video conferencing was activated in the work list on the date of show cause notice dated04.4.2021. For preferring the personal hearingthroughvideoconferencing appropriate hyperlink is available in the e-filing portal every time the show cause notice is issued. Therefore, furnishing the written reply to show cause notice on 07.04.2021 without clicking on the hyperlink is insufficient to providethe facility to the petitioner. The printof the case history noting is annexed tosubstantiate this aspect. 5.4 It is emphasised that if at all there is nonavailability of personal hearing, it is due to the technical challenge on the part of the petitioner. The written submissions/replies dated 06.04.2021 and 08.04.2021 in response tothe show cause notice have already beenduly taken care of before passing theAssessment Order. After analyzing theTechnical Assistance Report of the TechnicalUnit (TU) and Review Report from Review Unit(RU), the final Assessment Order has beenpassed on the basis of details submitted by the assessee and the documents available on the ITBA. 5.5It is reiteratively emphasised that the statutory mechanism cannot be overlooked for redressal of his grievanceand therefore, the Court need not entertainthis. 6.Affidavit-in-rejoinder has been filed by the authorised signatory of the petitioner. According to the petitioner, the stand of the respondent is selfcontradictory so far as its emphasis on theguidelines for personal hearing is concerned,the CBDT Circular is dated 23.11.2020 for thevideo conference. The written submission isrequired to be furnished as per thisSOP in response to the draft assessment C/SCA/7477/2021 JUDGMENT DATED: 11/10/2021 order. The written submissions were submitted on 07.04.2021 on the part of thepetitioner, and hence, the petition is inthe line of SOP issued by the CBDT. Thereis no evidence to show the existence of any hyperlink as on 04.04.2021 nor has the respondent provided any SOP or CBDTguidelines under which the hyperlink wascreated and provided. The screenshot of thecase history provided by the respondent shows the letter of the petitioner dated07.04.2021, however, it does not showexistence of any clickable hyperlink. 6.1According to the petitioner, due tochange in the entire ITBA Portal System andunavailability of the new system for morethan a month, the petitioner was unable toaccess to the portal to confirm the same. There is no SOP available in the public domain including the website of Income TaxDepartment regarding the system ofhyperlink available to be used in case ofthe application for the video conferencing. 6.2According to the petitioner, the guidelines issued by NeFAC dated 13.04.2021are issued only on 13.04.2021 whereas therequest was made on 07.04.2021 and hence,the guidelines did not exist at therelevant time and secondly, these guidelinesare not available in the public domain andhence, there is no way the petitioner couldhave known them. The website of the IncomeTax Department also does not reflect theseguidelines. There is nothing on the record toestablish that this had been madeknown to everyone. There is no SOP available in the public domain including the website of Income TaxDepartment regarding the system ofhyperlink available to be used in case ofthe application for the video conferencing. 6.2According to the petitioner, the guidelines issued by NeFAC dated 13.04.2021are issued only on 13.04.2021 whereas therequest was made on 07.04.2021 and hence,the guidelines did not exist at therelevant time and secondly, these guidelinesare not available in the public domain andhence, there is no way the petitioner couldhave known them. The website of the IncomeTax Department also does not reflect theseguidelines. There is nothing on the record toestablish that this had been madeknown to everyone. 7.This Court had extensively heard thelearned advocate, Mr.Bandish Soparkar andlearned senior advocate, Mr.Manish Bhattassisted by the learned senior standingcounsel, Mrs.Mauna Bhatt. As the heavyreliance was placed on the guidelinesissued by the NFAC circulated through e-mail dated 13.04.2021, an order was passedon 29.09.2021 to let the Court know of thedate and the authority which had issued theguidelines for personal hearing throughvideo conferencing. Before initiating thedictation, the compliance of the order ofthis Court dated 29.09.2021 was inquiredabout and the reply to which has beengiven on the part of the respondent ofabsence of such instructions on the part of the department. 8.On the strength of the submissions madebefore this Court and also considering thematerial which has been placed on record,we at the outset make a mention that we arerestricting ourselves to the aspect ofavailment of the opportunity of hearing tothe petitioner at the time of framing theassessment in its case. It is alsonecessary for this Court to make a mentionat this stage that the self restraint forentertaining the petition under Article 226of the Constitution of India even when thestatutory remedies are available is a welllaid down principle which the Court neednot emphasize at this stage. Suffice tonote that there are settled position of lawand this Court can surely indulge into thematter when those grounds exist, one of which is of violation of principles of natural justice. 9.As is quite apparent from the detailsthat had been given hereinabove that theassessee a Joint Venture acted as developerand infrastructure project developer sinceit is involved in the construction ofhighway, whose case had been processedunder Section 143(1) of the Income Tax Actfor the Assessment Year 2018-2019 by CPC,Bangalore on 05.11.2019 on a total incomeof Rs.Nil. The petitioner’s case has beenselected for the limited scrutiny and theissues for selection were refund claim andthe contract receipt on fees. 10.The notice under Section 143(2) ofthe IT Act was issued electronically onthe IT Act was issued electronically on 22.09.2019 and served upon the Assessee on its e-mail id registered with the department and its reply was fixed on07.10.2019. 11. The notice under Section 142(1) of theIT Act along with the questionnaire alsowas issued on 30.01.2020, the compliance ofwhich was on dated 14.02.2020. Anothernotice under Section 142(1) of the IT Actalong with the questionnaire had been issued on 11.12.2020 sent through the electronic mode for compliance on20.12.2020 under the faceless scheme. Inreply to the notice dated 11.12.2020 underSection 142(1) on 24.12.2020 the point wisereply had been given by the petitioner. On22.02.2021 in reply to the notice underSection 142(1) of 19.02.2021 had been given. On 08.01.2020 with reference to the notice under Section 143 (2) of therespondent, the clarification on the issuesof refund claim, contract receipt and feeshad been made. 11.1 The show cause notice was issued issued on 11.12.2020 sent through the electronic mode for compliance on20.12.2020 under the faceless scheme. Inreply to the notice dated 11.12.2020 underSection 142(1) on 24.12.2020 the point wisereply had been given by the petitioner. On22.02.2021 in reply to the notice underSection 142(1) of 19.02.2021 had been given. On 08.01.2020 with reference to the notice under Section 143 (2) of therespondent, the clarification on the issuesof refund claim, contract receipt and feeshad been made. 11.1 The show cause notice was issued as to why the assessment should not becompleted as per the draft assessment orderon 04.04.2021, proposing to modify theincome and the sum payable which is servedelectronically to the petitioner. In response to the said show cause notice, thereply has been given 06.04.2021. Incontinuation of the reply dated 06.04.2021further communication had been sent to the Income Tax Officer on 07.04.2021 requestingspecifically that if the respondent is not satisfied with the explanation, the petitioner should be provided video conferencing option to discuss the issue. The reply mentions the continuation of reply dated 06.04.2021, the further submissions have been made on merits and on 15.04.2021 also, further reply has been tendered. 12. There is no reference in the communication dated 08.04.2021 of the letter of 07.04.2021, however, according to the petitioner. The communication dated 08.04.2021 addressed to the Income Tax Officer is a reply on merits therefore, incontinuation of the earlier reply dated06.04.2021thishadbeensent electronically. As mentioned, the draft assessment order was served upon the petitioner on 04.04.2021. It is not being disputed that in continuation of the reply dated 06.04.2021, the request was made tothe respondent to provide the option of thevideo conferencing for discussing the issuepersonallyon07.04.2021.However, according to the respondent, such request since had not been made as per theguidelines issued for the personal hearingby the petitioner as provided under theFaceless Assessment Scheme, 2019, suchpersonal hearing naturally could not be given to him. He himself has not availedthe opportunity and therefore, he has noone to blame to. NFAC circulated through e-mail, the guidelines issued for personalhearing on dated 13.04.2021 in connectionwith the SOP. The steps mentioned are asfollow: “1.The assessee has to request for a personal hearing by clicking on the hyperlink for video conferencing VC which shall be available to him on e-filing portalagainst the Show Cause Notice. This hyperlink isenable only when an SCN issued to the assessee andremains active till the compliance date of SCN. 2. The video conferencing requests made by taxpayerafter clicking the above link, will be available in thecase History/Nothing screen in Assessment Proceedings.A link will be available to FAO in CaseHistory/Notings against the Show Cause Notice row toschedule a VC.” 13. This reiterative emphasis on the part of the respondent is of already having afforded the opportunity. There is an acquiescence by the petitioner, according to the respondent, of existence of the link which it has chosen not to avail. The proceedings have been initiated on 22.09.2019. According to the respondent, the petitioner was given an opportunity to show cause why the assessment should not be completed as per the draft assessment order. If the assessee desires to respond through the registered e-filing account, he could (a) accept the proposed modification; (b) file written reply objecting to theproposed modification and (c) if required, he may request for personal hearing so asto make oral submissions to present hiscase after filing of written reply. Onapproval of the request, personal hearingis permitted to be conducted exclusively acquiescence by the petitioner, according to the respondent, of existence of the link which it has chosen not to avail. The proceedings have been initiated on 22.09.2019. According to the respondent, the petitioner was given an opportunity to show cause why the assessment should not be completed as per the draft assessment order. If the assessee desires to respond through the registered e-filing account, he could (a) accept the proposed modification; (b) file written reply objecting to theproposed modification and (c) if required, he may request for personal hearing so asto make oral submissions to present hiscase after filing of written reply. Onapproval of the request, personal hearingis permitted to be conducted exclusively through the video conference. It provided that if there is no response of theassessee by the given time and date, theassessment shall be finalised as per thedraft assessment order. 14. According to the respondent, the petitioner had exercised option (b) and filed the reply, however, his request for personal hearing on 07.04.2021 is an afterthought. He of course had three options and yet, once having accepted the option (b) and having acted upon, he cannot insist on hearing on 07.04.2021. The opportunity was already given to him and he could not have then asked and alleged on21.04.2021 of non availment of opportunity. There is no element of prejudice as isbeing sought to be made. 15. We are not in an agreement with the submissions made by the Revenue for the simple reason that the request was in continuation of the reply which had been filed by the petitioner after the final notice was issued on 04.04.2021 with thedraft assessment order.Within two days, the reply came to be filed on 06.04.2021 inresponse to the said notice. His requestfor the personal hearing had come on thethird day of the issuance of the notice.The Court cannot be oblivious of the fact that it was not the case where the assessment was getting time barred. Theaddition proposed by way of the draftamendment was substantial therefore, withinthree days of the issuance of the noticeand within a day’s time of filing of thereply, if a request is made on the part ofthe petitioner for personal hearing, it isnot a sustainable stand of the revenue thatsuch request having come on 07.04.2021after having exercised the option of filing the reply, needs to be termed as anafterthought and to be brushed aside. 16. The Court is required to take into consideration the addition of Section 144Bof the IT Act, which is a faceless regimeunder the heading of faceless assessment inserted by the Taxation and other laws (Relaxation and Amendment of Certain provisions) Act, 2020 w.e.f. 01.04.2021where assessment under sub-section (3) ofSection 143 or under Section 144 of the ITAct has been covered. In the case referredto in sub-section (2) of Section 143 now is mandatorily made in a faceless manner as per the procedure prescribed in thisscheme.The scheme of the Act as it goesreflects that the National FacelessAssessment Centre is authorised to serveupon the assessee a notice under Section144 giving him an opportunity to show causeon a date and time to be specified in the 16. The Court is required to take into consideration the addition of Section 144Bof the IT Act, which is a faceless regimeunder the heading of faceless assessment inserted by the Taxation and other laws (Relaxation and Amendment of Certain provisions) Act, 2020 w.e.f. 01.04.2021where assessment under sub-section (3) ofSection 143 or under Section 144 of the ITAct has been covered. In the case referredto in sub-section (2) of Section 143 now is mandatorily made in a faceless manner as per the procedure prescribed in thisscheme.The scheme of the Act as it goesreflects that the National FacelessAssessment Centre is authorised to serveupon the assessee a notice under Section144 giving him an opportunity to show causeon a date and time to be specified in the notice. Where the assessee fails to complywith the notice referred to in clause (4)or notice issued under sub-section (1) ofSection 142 or with a direction issuedunder sub-section 2A of Section 142 as towhy the assessment in his case should notbe completed to the best of its judgment.The assessee shall also within the timespecified in the notice is required to filethe response or within such time as may beextended on the basis of an application inthis regard. The Assessment Unit shallafter taking into account the relevantmaterial available on the record and makein writing as per Section 144 (1) XL thedraft assessment order either accepting theincome or sum payable by or sum refundableto the assessee and send a copy of suchorder to National Faceless Assessment Centre. 16.1Worthwhile would it be to refer toSection 144 B (1) xvi, it clearly providesfor the National Faceless Assessment Centreto examine the draft assessment order. There are three options one of which is toprovide an opportunity to the assessee incase of any variation prejudicial to theinterest of the assessee is proposed andthe same is to be done by serving a noticecalling upon him to show cause as to whythe proposed variation should not be made. “144B(1)xvi: the National Faceless Assessment Centreshall examine the draft assessment order in accordancewith the risk management strategy specified by theBoard, including by way of an automated examinationtool, whereupon it may decide to- (a) finalise the assessment, in case no variation prejudicial to the interest of assessee is proposed, as perthe draft assessment order and serve a copy of suchorder and notice for initiating penalty proceedings, ifany, to the assessee, along with the demand notice,specifying the sum payable by, or refund of any amountdue to, assessee on the basis of such assessment; or (b) provide an opportunity to the assessee, in case anyvariation prejudicial to the interest of assessee isproposed, by serving a notice calling upon him to showcause as to why the proposed variation should not bemade; or (c) assign the draft assessment order to a review unit inany one Regional Faceless Assessment Centre, throughan automated allocation system, for conducting reviewof such order; 16.2 The assessee in case where a show cause notice has been served upon him asper the procedure laid down in Clause xviof Section 144B(1) furnishes response tothe National Faceless Assessment Centre onor (b) provide an opportunity to the assessee, in case anyvariation prejudicial to the interest of assessee isproposed, by serving a notice calling upon him to showcause as to why the proposed variation should not bemade; or (c) assign the draft assessment order to a review unit inany one Regional Faceless Assessment Centre, throughan automated allocation system, for conducting reviewof such order; 16.2 The assessee in case where a show cause notice has been served upon him asper the procedure laid down in Clause xviof Section 144B(1) furnishes response tothe National Faceless Assessment Centre onor before the scheduled date and time orwithin the extended time.16.3Clause (xxiii) provides for theNational Faceless Assessment Centre tofinalize the draft assessment where noresponse to the show cause notice isreceived in a case where the draftassessment order along with the finalnotice is proposed for making anyvariation, prejudicial to the interest ofassessee. The draft assessment order orfinal draft assessment order, in case ofsuch assessee or in any other case oncefinalised as per the draft assessmentorder, a copy needs to be served of suchorder and notice for initiation of thepenalty proceedings to the assessee alongwith the demand notice. In any other case,the National Faceless Scheme Centre to send the response received from the assessee to theAssessment Unit. “Clause xxiii: the National Faceless Assessment Centreshall (a) where no response to the show-cause noticeis received as per clause (xxii), (A) in a case where the draft assessment order or thefinal draft assessment order is in respect of an eligibleassessee and proposes to make any variation which isprejudicial to the interest of said assessee, forward thedraft assessment order or final draft assessment tosuch assessee; or (B) in any other case, finalise the assessment as perthe draft assessment order or the final draft assessmentorder and serve a copy of such order and notice forinitiating penalty proceedings, if any, to the assessee,alongwith the demand notice, specifying the sumpayable by, or refund of any amount due to, theassessee on the basis of such assessment; (b) in any other case, send the response received fromthe assessee to the assessment unit;” For the purpose of faceless assessment, sub-section (7) of Section 144B of the IT Act would require reproduction. “(7) For the purposes of faceless assessment - (i)an electronic record shall be authenticated by-(a) the National Faceless Assessment Centre by affixingits digital signature; (b) assessee or any other person, by affixing his digitalsignature if he is required to furnish his return ofincome under digital signature, and in any other case,by affixing his digital signature or under electronicverification code in the prescribed manner; (ii) every notice or order or any other electroniccommunication shall be delivered to the addressee,being the assessee, by way of- (a) placing an authenticated copy thereof in theassessee's registered account; or (b) sending an authenticated copy thereof to theregistered email address of the assessee or hisauthorised representative; or (c) uploading an authenticated copy on the assessee's Mobile App. and followed by a real time alert; (iii) every notice or order or any other electroniccommunication shall be delivered to the addressee,being any other person, by sending an authenticatedcopy thereof to the registered email address of suchperson, followed by a real time alert; (iv) the assessee shall file his response to any notice ororder or any other electronic communication, throughhis registered account, and once an acknowledgementis sent by the National Faceless Assessment Centrecontaining the hash result generated upon successfulsubmission of response, the response shall be deemedto be authenticated; (c) uploading an authenticated copy on the assessee's Mobile App. and followed by a real time alert; (iii) every notice or order or any other electroniccommunication shall be delivered to the addressee,being any other person, by sending an authenticatedcopy thereof to the registered email address of suchperson, followed by a real time alert; (iv) the assessee shall file his response to any notice ororder or any other electronic communication, throughhis registered account, and once an acknowledgementis sent by the National Faceless Assessment Centrecontaining the hash result generated upon successfulsubmission of response, the response shall be deemedto be authenticated; (v) the time and place of dispatch and receipt ofelectronic record shall be determined in accordancewith the provisions of section 13 of the InformationTechnology Act, 2000; (vi) a person shall not be required to appear eitherpersonally or through authorised representative inconnection with any proceedings before the income-taxauthority at the National Faceless Assessment Centreor Regional Faceless Assessment Centre or any unit set up under this sub-section; (vii) in a case where a variation is proposed in thedraft assessment order or final draft assessment orderor revised draft assessment order, and an opportunityis provided to the assessee by serving a notice callingupon him to show cause as to why the assessmentshould not be completed as per the such draft or finaldraft or revised draft assessment order, the assessee orhis authorised representative, as the case may be, mayrequest for personal hearing so as to make his oralsubmissions or present his case before the income taxauthority in any unit; (viii) the Chief Commissioner or the Director General,in charge of the Regional Faceless Assessment Centre,under which the concerned unit is set up, mayapprove the request for personal hearing referred to inclause (vii) if he is of the opinion that the request iscovered by the circumstances referred to in sub-clause(h) of clause (xii); (ix) where the request for personal hearing has beenapproved by the Chief Commissioner or the DirectorGeneral, in charge of the Regional Faceless AssessmentCentre, such hearing shall be conducted excluively through video conferencing or video telephony,including use of any telecommunication applicationsoftware which supports video conferencing or videotelephony, in accordance with the procedure laiddown by the Board; (x) subject to the proviso to sub-section (6), anyexamination or recording of the statement of theassessee or any other person (other than statementrecorded in the course of survey under section 133A ofthe Act) shall be conducted by an income-tax authorityin any unit, exclusively through video conferencing orvideotelephony,includinguseofanytelecommunication application software which supportsvideo conferencing or video telephony in accordancewith the procedure laid down by the Board; (xi) the Board shall establish suitable facilities forvideo conferencing or video telephony includingtelecommunication application software which supportsvideo conferencing or video telephony at suchlocations as may be necessary, so as to ensure that theassessee, or his authorised representative, or any otherperson is not denied the benefit of faceless assessmentmerely on the consideration that such assessee or hisauthorised representative, or any other person does not have access to video conferencing or videotelephony at his end; (xi) the Board shall establish suitable facilities forvideo conferencing or video telephony includingtelecommunication application software which supportsvideo conferencing or video telephony at suchlocations as may be necessary, so as to ensure that theassessee, or his authorised representative, or any otherperson is not denied the benefit of faceless assessmentmerely on the consideration that such assessee or hisauthorised representative, or any other person does not have access to video conferencing or videotelephony at his end; (xii) the Principal Chief Commissioner or the PrincipalDirector General, in charge of the National FacelessAssessment Centre shall, with the prior approval of theBoard, lay down the standards, procedures andprocesses for effective functioning of the NationalFaceless Assessment Centre, Regional FacelessAssessment Centres and the unit set up, in anautomated and mechanised environment, includingformat, mode, procedure and processes in respect ofthe following, namely:- (a) service of the notice, order or any othercommunication; (b) receipt of any information or documents from theperson in response to the notice, order or any othercommunication; (c) issue of acknowledgment of the response furnishedby the person; (d) provision of "e-proceeding" facility including loginaccount facility, tracking status of assessment, displayof relevant details, and facility of download; (e) accessing, verification and authentication ofinformation and response including documentssubmitted during the assessment proceedings; (f) receipt, storage and retrieval of information ordocuments in a centralised manner; (g) circumstances in which proviso to sub-section(6) shall apply; (h) circumstances in which personal hearing referred toclause (viii) shall be approved; (i) general administration and grievance redressalmechanism in the respective Centres and units.” 16.5 Clause (vii) of sub-section (7) of Section 144 A provides that where a variation is proposed in the draft assessment order or final draft assessment order or revised draft assessment order, anopportunity is provided to the assessee byserving a notice calling upon him to show cause as to why the assessment should not be completed as per such draft or finaldraft or revised draft assessment order. Theassesseeorhisauthorised 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. Such request may be approved forpersonal hearing, if the Chief Commissioneror the Director General, In-charge of Regional Faceless Assessment Centre is ofthe opinion that the request is covered bythe circumstances referred to in sub-clause(h) of clause (xii), where such request for personal hearing is approved, such hearingis required to be conducted exclusivelythrough video conferencing or through video telephony including by use of any C/SCA/7477/2021 JUDGMENT DATED: 11/10/2021 telecommunication software, which support the video conferencing or video telephonyin accordance with the procedure laid downby the Court. The Board is required toestablish the suitable facility for videoconferencing as per clause (xii) of sub- section 7 of Section 144B or videotelephonyincludingtelecommunicationapplication software which supports thevideo conferencing or video telephony toensure that the assessee or its authorisedrepresentatives or any other person is notdenied the benefit of faceless assessmentmearly on the consideration that suchassessee or its authorised representativesdo not have access to the videoconferencing or video telephony at a website. 16.6 Clause (xii) of sub-section 7 of telecommunication software, which support the video conferencing or video telephonyin accordance with the procedure laid downby the Court. The Board is required toestablish the suitable facility for videoconferencing as per clause (xii) of sub- section 7 of Section 144B or videotelephonyincludingtelecommunicationapplication software which supports thevideo conferencing or video telephony toensure that the assessee or its authorisedrepresentatives or any other person is notdenied the benefit of faceless assessmentmearly on the consideration that suchassessee or its authorised representativesdo not have access to the videoconferencing or video telephony at a website. 16.6 Clause (xii) of sub-section 7 of section 144 B provides for the PrincipalChief Commissioner or Principal DirectorGeneral, In-charge of the National FacelessAssessment Scheme Centre with the prior approval of the Board to lay down the standard procedure and process for effective functioning of the National Faceless Assessment Centres, Regional Faceless Assessment Centres and the Unitset up in an automated and mechanised environment for the various services including the service of notice, order or other communication, the receipt of aninformation or document, etc. One of whichis important is sub-clause (h) of clause(xii) which provides for the circumstancesin which the personal hearing referred tothe clause (viii) needs to be approved. 16.7 Specific mention of sub-section (9) ofSection 144 B needs at this stage which startswith Non-obstante clause and declares that theassessment made under sub-section (3) of Section143 or under Section 144 in the cases referred toin sub-section (2)other than sub-section(8) on orafter the 1[st] day of April, 2021, shall be nonestif such assessment is not made in accordancewith the procedure laid down under the saidsection. Principles of natural juristic writslarge in this provision and legislature’s insteadto avail the opportunity of hearing also isstamped all over. A very strong deterrence issuedby the legislature for the revenue to adhere tothe detailed requirement of this provision asotherwise the assessment would be non-est.16.8 In this backdrop, worthwhile would be torefer to the decision of the Delhi HighCourt rendered in case ofSanjay Aggarwalvs. National Faceles Assessment Centre,Delhi,reportedin(2021)127 taxmann.com 637 (Delhi)where the High Court was considering the challenge to theassessmentorderandconsequential proceedings. While interpreting the word ‘may’ in section 144 B(vii) according tothe Delhi High Court, the provision cannotabsolve the revenue from obligation cast upon it to consider the request made for grant of personal hearing. Where therevenue served a show cause notice-cum- draft assessment order on assessee proposing to vary the income disclosed bythe assessee and thereafter without affording a personal hearing to theassessee when passed the assessment orderthe same was quashed. 16.9The relevant paragraphs discussing this aspect deserves reproduction. “11. Having perused the record and heard the learnedcounsel for the parties, in our view, what has clearlyemerged is, as follows: (i) That prior to the issuance of the how cause notice-cum-draft assessment order dated 23-4-2021, a show-cause notice-cum-draft assessment order was issued on13-4 2021. In between these two dates, the petitionerhad, on two occasions, i.e., 15-4-2021 and 20-4-2021,asked or personal hearing in the matter. (ii) After the show cause notice-cum-draft assessmentorder dated 23-4-2021 was issued, via which thepetitioner was invited to file his response/objections,the petitioner, once again, while filing his reply, on24-4-2021, asked for being accorded personal hearingin the matter. 16.9The relevant paragraphs discussing this aspect deserves reproduction. “11. Having perused the record and heard the learnedcounsel for the parties, in our view, what has clearlyemerged is, as follows: (i) That prior to the issuance of the how cause notice-cum-draft assessment order dated 23-4-2021, a show-cause notice-cum-draft assessment order was issued on13-4 2021. In between these two dates, the petitionerhad, on two occasions, i.e., 15-4-2021 and 20-4-2021,asked or personal hearing in the matter. (ii) After the show cause notice-cum-draft assessmentorder dated 23-4-2021 was issued, via which thepetitioner was invited to file his response/objections,the petitioner, once again, while filing his reply, on24-4-2021, asked for being accorded personal hearingin the matter. 11.1 The sum and substance of the requests made, isthat, both before and after the issuance of the show-cause notice-cum-draft assessment order dated 23-4-2021, the petitioner continued to press therespondent/revenue to accord him a personal hearing,before it proceeded to pass the impugned assessmentorder. As noticed above, according to the petitioner,the request was made as the matter was complex and therefore, required some bit of explanation. 11.2 It has also emerged that [something which is notin dispute], the respondent/revenue made proposalsfor varying the income, both via the show-causenotice dated 13-4-2021 as well as the show-causenotice-cum-draft assessment order dated 23-4-2021. Asnoticed above, the declared income was proposed tobe, substantially, varied. 11.3 In this context, if one were to look at therelevant provisions, [which, or the sake ofconvenience are extracted hereafter], then, one wouldget a sense as to why the legislature has provided apersonal hearing in the matter: "144B. Faceless assessment - (1).** (7) For the purposes of faceless assessment- (vii) in a case where a variation is proposed in thedraft assessment order, or final draft assessment orderor revised draft assessment order, and an opportunityis provided to the assessee by serving a notice calling upon him to show-cause as to why the assessmentshould not be completed as per the such draft or finaldraft or revised draft assessment order, the assessee orhis authorised representative, as the case may be,may request for personal hearing so as to make hisoral submissions or present his case before the incometax 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 is set up mayapprove the request for personal hearing referred to inclause (vi) if he is of the opinion that the request iscovered by the circumstances referred to in sub-clause(h) of clause (xii); (xii) the Principal Chief Commissioner or the PrincipalDirector General, in charge of the National FacelessAssessment Centre shall, with the prior approval ofthe Board, lay down the standards, procedures andprocesses for effective functioning of the NationalFaceless Assessment Centre, Regional FacelessAssessment Centres and the unit set up, in automatedand mechanised environment, including format, mode,procedure and process in respect of the following,namely: (h) circumstances in which personal hearing referredto clause (viii) shall be approved; (xii) the Principal Chief Commissioner or the PrincipalDirector General, in charge of the National FacelessAssessment Centre shall, with the prior approval ofthe Board, lay down the standards, procedures andprocesses for effective functioning of t