Sca/7541/2021 Of Sardar Co-Op. Credit Society Ltd v. Additional / Joint / Deputy / Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/SPECIAL CIVIL APPLICATION NO. 7541 of 2021 FOR APPROVAL AND SIGNATURE: HONOURABLE MR. JUSTICE J.B.PARDIWALA andHONOURABLE MS. JUSTICE NISHA M. THAKORE ==========================================================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 ?==========================================================SARDAR CO-OP. CREDIT SOCIETY LTD. VersusADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OFINCOME TAX ==========================================================Appearance:JAIMIN A GANDHI(8065) for the Petitioner(s) No. 1MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1,2 ========================================================== CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALAandHONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 10/01/2022 ORAL JUDGMENT (PER : HONOURABLE MS. JUSTICE NISHA M. THAKORE) 1.The writ applicant has invoked extraordinary writ jurisdictionof this Court under Article 226 of the Constitution of India and hasthereby prayed for the following reliefs: “7(A)The Hon’ble Court may be pleased to quash and setaside the impugned assessment order dated 07.04.2021and consequent proceedings / notices;aside the impugned assessment order dated 07.04.2021and consequent proceedings / notices; (B)Pending the hearing and final disposal of this application,this Hon’ble Court be pleased to stay the implementationof assessment order dated 07.04.2021;this Hon’ble Court be pleased to stay the implementationof assessment order dated 07.04.2021; (C)This Hon’ble Court may be pleased to grant any further orother relief as this Hon’ble Court deems just and proper inthe interest of justice; other relief as this Hon’ble Court deems just and proper inthe interest of justice; (D)The Hon’ble Court may be pleased to quash and setaside demand notice u/s. 156 and initiation of penaltyproceedings u/s. 270A, consequent to assessment orderdated 07/04/2021.”aside demand notice u/s. 156 and initiation of penaltyproceedings u/s. 270A, consequent to assessment orderdated 07/04/2021.” 2.The facts in brief giving rise to this writ application aresummarized as under: 2.1The writ applicant is a Cooperative Society registered underthe Gujarat State Cooperative Societies Act, 1960. The writapplicant Society is engaged in the business of providing Creditfacility to its members and collecting deposit from its members forthe purpose of lending finance. The writ applicant society alsomake investments in Scheduled Bank and other CooperativeBank. 2.2The writ applicant Society is thus assessed as ‘Associationof Persons’ and claimed to have filed return of income accordingly.The writ applicant had filed its return of income for annual A.Y.2018-19 on 09.09.2018 declaring total income of Rs.44,79,940/-.The assessee had claimed refund of Rs.2,62,830/- in the return ofof income. 2.3The respondent had selected the case of the writ applicant for limited scrutiny vide notice dated 22.09.2019 under Section143(2) of the Act. Thereafter, the respondent had issued furthernotice under Section 142(1) of the Act on 13.11.2020 calling forvarious information and clarifications, more particularly, with regardto the deduction under Section 80P of the Income Tax Act. 2.4It is the case of the writ applicant that the respondent had notissued any show cause notice seeking clarifications as regards theclaim of deduction under Section 80P(2)(a)(i) of Rs.2,08,05,240/-to be disallowed and further to be treated as income from othersource. 2.3The respondent had selected the case of the writ applicant for limited scrutiny vide notice dated 22.09.2019 under Section143(2) of the Act. Thereafter, the respondent had issued furthernotice under Section 142(1) of the Act on 13.11.2020 calling forvarious information and clarifications, more particularly, with regardto the deduction under Section 80P of the Income Tax Act. 2.4It is the case of the writ applicant that the respondent had notissued any show cause notice seeking clarifications as regards theclaim of deduction under Section 80P(2)(a)(i) of Rs.2,08,05,240/-to be disallowed and further to be treated as income from othersource. 2.5In absence of such opportunity and without providing draftassessment order, the respondent Authority straightway passedthe assessment order on 07.04.2021, whereby the AssessingOfficer disallowed the claim of deduction under Section 80P(2)(a)(i) and had treated an amount of Rs.2,08,05,240/- as an incomefrom other source. 2.6In such circumstances, the writ applicant being aggrievedhas approached this Court seeking relief as prayed for. 3.The principal ground pressed by the writ applicant is withregard to non-compliance of provisions, more particularly, Section144B(xiv), Section 144B(xvi)(b) and Section 144B(xxii) of the Act.The assessment order impugned is passed without issuing noticecum draft assessment order upon the writ applicant. 4.Mr. Jaimin Gandhi, learned advocate appearing for the writapplicant has taken us through the impugned assessment order and has emphasized on the aforesaid provisions. Mr. Gandhi hasdrawn attention of this Court to the notice dated 22.09.2019 issuedunder Section 143(2) of the Act read with Rule 12E of Rulesframed thereunder and has submitted that the Assessing Officermainly raised three issues which include deduction under Section80P. He further drew attention of this Court to the fact that noclarification was sought for regarding disallowance of deductionunder Section 80P(2)(a)(i) of the Act. He further relied uponcontents of notice dated 13.11.2020 issued under Section 142(1)of the Act whereby the writ applicant was called upon to submitresponse by 27.01.2020. He submitted that necessary details werefurnished along with explanation by way of reply dated 25.11.2020which was uploaded on portal in response to such notice.Thereafter, no further clarification as regards Section 80P(2)(a)(i)of the Act was sought for and suddenly after a period of fivemonths the impugned order of assessment came to be passed on07.04.2021. Thus, the Assessing Officer has completelyoverlooked the reply filed by the assessee and without followingmandatory provisions of the Act, more particularly, Section 144B(1) (xiv) (xvi) (b) has proceeded to make variation by way of disallowance to the prejudice of the writ applicant. He submitted thatsuch action of respondent Authority is in gross violation ofprinciples of natural justice as well as mandatory provisions of lawand is required to be quashed and set aside. It is, therefore,submitted that the assessment order passed in violation of themandatory provisions is nonest and is required to be quashed andset aside. 5.Mr. Gandhi, Learned advocate for the writ applicant insupport of his submissions has relied upon following decisions: 5.Mr. Gandhi, Learned advocate for the writ applicant insupport of his submissions has relied upon following decisions: 6.On the other hand, Mr. Varun K. Patel, learned advocateappearing on behalf of the Department has drawn attention of thisCourt to the affidavit-in-reply filed by the respondent No.2. In thereply, stance taken by the Revenue is that due opportunity ofhearing was given to the writ applicant, during the course of theassessment proceeding, however, there is lapse on the part of theRevenue in non-compliance of the provisions of issuance of showcause notice and draft assessment order, which may becondoned. Mr. Patel has also raised objection as regardsentertaining writ petition against final order of assessment beingpassed, as efficacious alternative remedy of appeal is available tothe writ applicant. It is therefore urged by the revenue to not toentertain the writ petition. 7.We have heard learned counsel of the parties and have perused the materials on record. The only short question whichfalls for our consideration is whether the impugned assessmentorder dated 07.04.2021 and the consequential demand notice isvalid and sustainable in law. 8.At this stage, it would be apt to reproduce Section 144B ofthe Income Tax Act, which reads as under: “144B. (1) Notwithstanding anything to the contrarycontained in any other provisions of this Act, the assessmentunder sub-section (3) of section 143 or under section 144, inthe cases referred to in sub-section (2), shall be made in afaceless manner as per the following procedure, namely:—(i) the National Faceless Assessment Centre shall serve anotice on the assessee under sub-section (2) of section 143;(ii) the assessee may, within fifteen days from the date ofreceipt of notice referred to in clause (i), file his response tothe National Faceless Assessment Centre; (iii) where the assessee— (a) has furnished his return of income under section 139or in response to a notice issued under sub-section (1) ofsection 142 under or sub-section (1) of section 148, anda notice under sub-section (2) of section 143 has beenissued by the Assessing Officer or the prescribedincome-tax authority, as the case may be; or or in response to a notice issued under sub-section (1) ofsection 142 under or sub-section (1) of section 148, anda notice under sub-section (2) of section 143 has beenissued by the Assessing Officer or the prescribedincome-tax authority, as the case may be; or (b) has not furnished his return of income in response toa notice issued under sub-section (1) of section 142 bythe Assessing Officer; or a notice issued under sub-section (1) of section 142 bythe Assessing Officer; or (c) has not furnished his return of income under sub-section (1) of section 148 and a notice under sub-section(1) of section 142 has been issued by the AssessingOfficer,section (1) of section 148 and a notice under sub-section(1) of section 142 has been issued by the AssessingOfficer, the National Faceless Assessment Centre shall intimate theassessee that assessment in his case shall be completed inaccordance with the procedure laid down under this section; (iv) the National Faceless Assessment Centre shall assignthe case selected for the purposes of faceless assessmentunder this section to a specific assessment unit in any oneRegional Faceless Assessment Centre through anautomated allocation system; (v) where a case is assigned to the assessment unit, it maymake a request to the National Faceless Assessment Centrefor— (a) obtaining such further information, documents or evidence from the assessee or any other person, as itmay specify; (b) conducting of certain enquiry or verification byverification unit; and (c) seeking technical assistance from the technical unit; (vi) where a request for obtaining further information, (v) where a case is assigned to the assessment unit, it maymake a request to the National Faceless Assessment Centrefor— (a) obtaining such further information, documents or evidence from the assessee or any other person, as itmay specify; (b) conducting of certain enquiry or verification byverification unit; and (c) seeking technical assistance from the technical unit; (vi) where a request for obtaining further information, documents or evidence from the assessee or any otherperson has been made by the assessment unit, the NationalFaceless Assessment Centre shall issue appropriate noticeor requisition to the assessee or any other person forobtaining the information, documents or evidencerequisitioned by the assessment unit; (vii) the assessee or any other person, as the case may be, shall file his response to the notice referred to in clause (vi), within the time specified therein or such time as may beextended on the basis of an application in this regard, to theNational Faceless Assessment Centre; (viii) where a request for conducting of certain enquiry or verification by the verification unit has been made by theassessment unit, the request shall be assigned by theNational Faceless Assessment Centre to a verification unit inany one Regional Faceless Assessment Centre through anautomated allocation system; (ix) where a request for seeking technical assistance from the technical unit has been made by the assessment unit,the request shall be assigned by the National FacelessAssessment Centre to a technical unit in any one RegionalFaceless Assessment Centre through an automatedallocation system; (x) the National Faceless Assessment Centre shall send the report received from the verification unit or the technical unit,based on the request referred to in clause (viii) or clause (ix)to the concerned assessment unit; (xi) where the assessee fails to comply with the notice referred to in clause (vi) or notice issued under sub-section(1) of section 142 or with a direction issued under sub-section (2A) of section 142, the National FacelessAssessment Centre shall serve upon such assessee a notice under section 144 giving him an opportunity to show-cause, on a date and time to be specified in the notice, whythe assessment in his case should not be completed to thebest of its judgment; (xii) the assessee shall, within the time specified in thenotice referred to in clause (xi) or such time as may beextended on the basis of an application in this regard, file hisresponse to the National Faceless Assessment Centre; (xiii) where the assessee fails to file response to the noticereferred to in clause (xi) within the time specified therein orwithin the extended time, if any, the National FacelessAssessment Centre shall intimate such failure to theassessment unit; (xiv) the assessment unit shall, after taking into account all the relevant material available on the record make in writing,a draft assessment order or, in a case where intimationreferred to in clause (xiii) is received from the NationalFaceless Assessment Centre, make in writing, a draftassessment order to the best of its judgment, eitheraccepting the income or sum payable by, or sum refundableto, the assessee as per his return or making variation to thesaid income or sum, and send a copy of such order to theNational Faceless Assessment Centre; (xv) the assessment unit shall, while making draft assessment order, provide details of the penaltyproceedings to be initiated therein, if any; (xvi) the National Faceless Assessment Centre shall examine the draft assessment order in accordance with therisk management strategy specified by the Board, includingby way of an automated examination tool, whereupon it maydecide to— (a) finalise the assessment, in case no variation (xv) the assessment unit shall, while making draft assessment order, provide details of the penaltyproceedings to be initiated therein, if any; (xvi) the National Faceless Assessment Centre shall examine the draft assessment order in accordance with therisk management strategy specified by the Board, includingby way of an automated examination tool, whereupon it maydecide 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, if any,to the assessee, along with the demand notice,specifying the sum payable by, or refund of any amountdue to, the 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 be made; or (c) assign the draft assessment order to a review unit in any one Regional Faceless Assessment Centre, throughan automated allocation system, for conducting review of such order; (xvii) the review unit shall conduct review of the draft assessment order referred to it by the National FacelessAssessment Centre whereupon it may decide to— (a) concur with the draft assessment order and intimate the National Faceless Assessment Centre about suchconcurrence; or (b) suggest such variation, as it may deem fit, in the draft assessment order and send its suggestions to theNational Faceless Assessment Centre; (xviii) the National Faceless Assessment Centre shall, uponreceiving concurrence of the review unit, follow theprocedure laid down in— (a) sub-clause (a) of clause (xvi); or (b) sub-clause (b) of clause (xvi); (xix) the National Faceless Assessment Centre shall, upon receiving suggestions for variation from the review unit,assign the case to an assessment unit, other than theassessment unit which has made the draft assessmentorder, through an automated allocation system; (xx) the assessment unit shall, after considering thevariations suggested by the review unit, send the final draftassessment order to the National Faceless AssessmentCentre; (xxi) the National Faceless Assessment Centre shall, uponreceiving final draft assessment order follow the procedurelaid down in— (a) sub-clause (a) of clause (xvi); or (b) sub-clause (b) of clause (xvi); (xxii) the assessee may, in a case where show-cause notice has been served upon him as per the procedure laid down insub-clause (b) of clause (xvi), furnish his response to theNational Faceless Assessment Centre on or before the dateand time specified in the notice or within the extended time,if any; (xxiii) the National Faceless Assessment Centre shall,— (a) where no response to the show-cause notice isreceived as per clause (xxii),— (A) in a case where the draft assessment order or the final 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 orderto such assessee; or (B) in any other case, finalise the assessment as per the 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 from the assessee to the assessment unit; (xxiv) the assessment unit shall, after taking into account the response furnished by the assessee, make a reviseddraft assessment order and send it to the National FacelessAssessment Centre; (xxv) the National Faceless Assessment Centre shall, upon receiving the revised draft assessment order,— (B) in any other case, finalise the assessment as per the 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 from the assessee to the assessment unit; (xxiv) the assessment unit shall, after taking into account the response furnished by the assessee, make a reviseddraft assessment order and send it to the National FacelessAssessment Centre; (xxv) the National Faceless Assessment Centre shall, upon receiving the revised draft assessment order,— (a) in case the variations proposed in the revised draft assessment order are not prejudicial to the interest ofthe assessee in comparison to the draft assessmentorder or the final draft assessment order, and— (A) in case the revised draft assessment order is in respect of an eligible assessee and there is anyvariation prejudicial to the interest of the assesseeproposed in draft assessment order or the final draftassessment order, forward the said revised draftassessment order to such assessee; (B) in any other case, finalise the assessment as per the revised draft assessment order and serve a copy ofsuch order and notice for initiating penalty proceedings,if any, to the assessee, alongwith the demand notice,specifying the sum payable by, or refund of any amountdue to, the assessee on the basis of such assessment; (b) in case the variations proposed in the revised draft assessment order are prejudicial to the interest of theassessee in comparison to the draft assessment order or thefinal draft assessment order, provide an opportunity to theassessee, by serving a notice calling upon him to show-cause as to why the proposed variation should not be made; (xxvi) the procedure laid down in clauses (xxiii), (xxiv) and (xxv) shall apply mutatis mutandis to the notice referred to insub-clause (b) of clause (xxv); (xxvii) where the draft assessment order or final draftassessment order or revised draft assessment order isforwarded to the eligible assessee as per item (A) of sub-clause (a) of clause (xxiii) or item (A) of sub-clause (a) ofclause (xxv), such assessee shall, within the period specifiedin sub-section (2) of section 144C, file his acceptance of thevariations to the National Faceless Assessment Centre; (xxviii) the National Faceless Assessment Centre shall,— (a) upon receipt of acceptance as per clause (xxvii); or (b) if no objections are received from the eligibleassessee within the period specified in sub-section (2) ofsection 144C, finalise the assessment within the time allowed undersub-section (4) of section 144C and serve a copy of suchorder and notice for initiating penalty proceedings, if any,to the assessee, alongwith the demand notice, specifyingthe sum payable by, or refund of any amount due to, theassessee on the basis of such assessment; (xxix) where the eligible assessee files his objections with the Dispute Resolution Panel, the National Faceless AssessmentCentre shall upon receipt of the directions issued by theDispute Resolution Panel under sub-section (5) of section144C, forward such directions to the concerned assessmentunit; (xxx) the assessment unit shall in conformity of the directions issued by the Dispute Resolution Panel undersub-section (5) of section 144C, prepare a draft assessmentorder in accordance with sub-section (13) of section 144Cand send a copy of such order to the National FacelessAssessment Centre; (xxxi) the National Faceless Assessment Centre shall, upon (xxix) where the eligible assessee files his objections with the Dispute Resolution Panel, the National Faceless AssessmentCentre shall upon receipt of the directions issued by theDispute Resolution Panel under sub-section (5) of section144C, forward such directions to the concerned assessmentunit; (xxx) the assessment unit shall in conformity of the directions issued by the Dispute Resolution Panel undersub-section (5) of section 144C, prepare a draft assessmentorder in accordance with sub-section (13) of section 144Cand send a copy of such order to the National FacelessAssessment Centre; (xxxi) the National Faceless Assessment Centre shall, upon receipt of draft assessment order referred to in clause (xxx),finalise the assessment within the time allowed under sub-section (13) of section 144C and serve a copy of such orderand notice for initiating penalty proceedings, if any, to theassessee, alongwith the demand notice, specifying the sumpayable by, or refund of any amount due to, the assessee onthe basis of such assessment; (xxxii) The National Faceless Assessment Centre shall, aftercompletion of assessment, transfer all the electronic records of the case to the Assessing Officer having jurisdiction overthe said case for such action as may be required under theAct. (2) The faceless assessment under sub-section (1) shall be made in respect of such territorial area, or persons or classof persons, or incomes or class of incomes, or cases orclass of cases, as may be specified by the Board. (3) The Board may, for the purposes of facelessassessment, set up the following Centres and units andspecify their respective jurisdiction, namely:— (i) a National Faceless Assessment Centre to facilitate the conduct of faceless assessment proceedings in acentralised manner, which shall be vested with thejurisdiction to make faceless assessment; (ii) Regional Faceless Assessment Centres, as it may deem necessary, to facilitate the conduct of facelessassessment proceedings in the cadre controllingregion of a Principal Chief Commissioner, which shallbe vested with the jurisdiction to make facelessassessment; (iii) assessment units, as it may deem necessary to facilitate the conduct of faceless assessment, toperform the function of making assessment, whichincludes identification of points or issues material forthe determination of any liability (including refund)under the Act, seeking information or clarification onpoints or issues so identified, analysis of the materialfurnished by the assessee or any other person, andsuch other functions as may be required for thepurposes of making faceless assessment; (iv) verification units, as it may deem necessary to facilitate the conduct of faceless assessment, toperform the function of verification, which includesenquiry, cross verification, examination of books ofaccounts, examination of witnesses and recording ofstatements, and such other functions as may berequired for the purposes of verification; (v) technical units, as it may deem necessary to facilitate the conduct of faceless assessment, toperform the function of providing technical assistancewhich includes any assistance or advice on legal,accounting, forensic, information technology,valuation, transfer pricing, data analytics, management or any other technical matter which may be required in a particular case or a class of cases, under thissection; and (vi) review units, as it may deem necessary to facilitate (v) technical units, as it may deem necessary to facilitate the conduct of faceless assessment, toperform the function of providing technical assistancewhich includes any assistance or advice on legal,accounting, forensic, information technology,valuation, transfer pricing, data analytics, management or any other technical matter which may be required in a particular case or a class of cases, under thissection; and (vi) review units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform thefunction of review of the draft assessment order, whichincludes checking whether the relevant and materialevidence has been brought on record, whether therelevant points of fact and law have been dulyincorporated in the draft order, whether the issues onwhich addition or disallowance should be made havebeen discussed in the draft order, whether theapplicable judicial decisions have been consideredand dealt with in the draft order, checking forarithmetical correctness of variations proposed, if any,and such other functions as may be required for the purposes of review. (4) The assessment unit, verification unit, technical unit andthe review unit shall have the following authorities, namely: — (a) Additional Commissioner or Additional Director orJoint Commissioner or Joint Director, as the case maybe; Joint Commissioner or Joint Director, as the case maybe; (b) Deputy Commissioner or Deputy Director or Assistant Commissioner or Assistant Director, orIncome-tax Officer, as the case may be; Income-tax Officer, as the case may be; (c) such other income-tax authority, ministerial staff, executive or consultant, as considered necessary bythe Board.the Board. (5) All communication among the assessment unit, review unit, verification unit or technical unit or with the assessee orany other person with respect to the information ordocuments or evidence or any other details, as may benecessary for the purposes of making a facelessassessment shall be through the National FacelessAssessment Centre. (6) All communications between the National FacelessAssessment Centre and the assessee, or his authorisedrepresentative, or any other person shall be exchangedexclusively by electronic mode; and all internalcommunications between the National Faceless AssessmentCentre, Regional Faceless Assessment Centres and variousunits shall be exchanged exclusively by electronic mode: Provided that the provisions of this sub-section shall notapply to the enquiry or verification conducted by theverification unit in the circumstances referred to in sub-clause (g) of clause (xii) of sub-section (7). (7) For the purposes of faceless assessment— (i) an electronic record shall be authenticated by— (a) the National Faceless Assessment Centre by affixing its digital signature; (b) assessee or any other person, by affixing his digital signature if he is required to furnish his return of incomeunder digital signature, and in any other case, by affixinghis digital signature or under electronic verification codein the prescribed manner; (ii) every notice or order or any other electronic communication shall be delivered to the addressee, beingthe assessee, by way of— (a) placing an authenticated copy thereof in the assessee’s registered account; or (b) sending an authenticated copy thereof to the registered email address of the assessee or hisauthorised representative; or authorised 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 electronic communication shall be delivered to the addressee, beingany other person, by sending an authenticated copy thereofto the registered email address of such person, followed bya real time alert; (iv) the assessee shall file his response to any notice or communication shall be delivered to the addressee, beingthe assessee, by way of— (a) placing an authenticated copy thereof in the assessee’s registered account; or (b) sending an authenticated copy thereof to the registered email address of the assessee or hisauthorised representative; or authorised 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 electronic communication shall be delivered to the addressee, beingany other person, by sending an authenticated copy thereofto the registered email address of such person, followed bya real time alert; (iv) the assessee shall file his response to any notice or order or any other electronic communication, through hisregistered account, and once an acknowledgement is sentby the National Faceless Assessment Centre containing thehash result generated upon successful submission ofresponse, the response shall be deemed to beauthenticated; (v) the time and place of dispatch and receiptof electronic record shall be determined in accordance withthe provisions of section 13 of the Information TechnologyAct, 2000 (21 of 2000); (vi) a person shall not be required to appear either personally or through authorised representative inconnection with any proceedings before the income-taxauthority at the National Faceless Assessment Centre or Regional Faceless Assessment Centre or any unit set upunder this sub-section; (vii) in a case where a variation is proposed in the draft assessment order or final draft assessment order or reviseddraft assessment order, and an opportunity is provided tothe assessee by serving a notice calling upon him to showcause as to why the assessment should not be completedas per the such draft or final draft or revised draftassessment order, the assessee or his authorisedrepresentative, as the case may be, may request forpersonal hearing so as to make his oral submissions orpresent his case before the income-tax authority in any unit;(viii) the Chief Commissioner or the Director General, incharge of the Regional Faceless Assessment Centre, underwhich the concerned unit is set up, may approve the requestfor personal hearing referred to in clause (vii) if he is of theopinion that the request is covered by the circumstancesreferred to in sub-clause (h) of clause (xii); (ix) where the request for personal hearing has been approved by the Chief Commissioner or the DirectorGeneral, in charge of the Regional Faceless AssessmentCentre, such hearing shall be conducted exclusively throughvideo conferencing or video telephony, including use of anytelecommunication application software which supportsvideo conferencing or video telephony, in accordance withthe procedure laid down by the Board; (x) subject to the proviso to sub-section (6), any examination or recording of the statement of the assessee or any otherperson (other than statement recorded in the course ofsurvey under section 133A of the Act) shall be conducted byan income-tax authority in any unit, exclusively throughvideo conferencing or video telephony, including use of anytelecommunication application software which supportsvideo conferencing or video telephony in accordance withthe procedure laid down by the Board; (xi) the Board shall establish suitable facilities for video conferencingorvideotelephonyincludingtelecommunication application software which supportsvideo conferencing or video telephony at such locations asmay be necessary, so as to ensure that the assessee, or hisauthorised representative, or any other person is not deniedthe benefit of faceless assessment merely on theconsideration that such assessee or his authorised representative, or any other person does not have access tovideo conferencing or video telephony at his end; (xii) the Principal Chief Commissioner or the Principal (xi) the Board shall establish suitable facilities for video conferencingorvideotelephonyincludingtelecommunication application software which supportsvideo conferencing or video telephony at such locations asmay be necessary, so as to ensure that the assessee, or hisauthorised representative, or any other person is not deniedthe benefit of faceless assessment merely on theconsideration that such assessee or his authorised representative, or any other person does not have access tovideo conferencing or video telephony at his end; (xii) the Principal Chief Commissioner or the Principal Director General, in charge of the National FacelessAssessment Centre shall, with the prior approval of theBoard, lay down the standards, procedures and processesfor effective functioning of the National FacelessAssessment Centre, Regional Faceless AssessmentCentres and the unit set up, in an automated andmechanised environment, including format, mode, procedureand processes in respect of the following, namely:— (a) service of the notice, order or any other communication; (b) receipt of any information or documents from theperson in response to the notice, order or any othercommunication; (c) issue of acknowledgement of the response furnishedby the person; (b) receipt of any information or documents from the (c) issue of acknowledgement of the response furnished (d) provision of “e-proceeding” facility including login account facility, tracking status of assessment, display ofrelevant details, and facility of download; (e) accessing, verification and authentication of information and response including documentssubmitted during the assessment proceedings; (f) receipt, storage and retrieval of information or documents in a centralised manner; (g) circumstances in which proviso to sub-section (6) shall apply; (h) circumstances in which personal hearingreferred to clause (viii) shall be approved; (i) general administration and grievance redressal mechanism in the respective Centres and units. (8) Notwithstanding anything contained in sub-section (1) or sub-section (2), the Principal Chief Commissioner or thePrincipal Director General in charge of National FacelessAssessment Centre may at any stage of the assessment, ifconsidered necessary, transfer the case to the AssessingOfficer having jurisdiction over such case, with the priorapproval of the Board. (9) Notwithstanding anything contained in any other provision of this Act, assessment made under sub-section(3) of section 143 or under section 144 in the cases referredto in sub-section (2) (other than the cases transferred undersub-section (8), on or after the 1st day of April, 2021), shall be non-est if such assessment is not made in accordancewith the procedure laid down under this section. Explanation.—In this section, unless the context otherwiserequires— (a) “addressee” shall have the same meaning as assigned to it in clause (b) of sub-section (1) of section 2of the Information Technology Act, 2000 (21 of 2000); (b) “authorised representative” shall have the samemeaning as assigned to it in sub-section (2) of section288; (c) “automated allocation system” means an algorithm for randomised allocation of cases, by using suitabletechnological tools, including artificial intelligence andmachine learning, with a view to optimise the use ofresources; (d) “automated examination tool” means an algorithm for standardised examination of draft orders, by usingsuitable technological tools, including artificialintelligence and machine learning, with a view to reducethe scope of discretion; (e) “computer resource” shall have the same meaning as assigned to it in clause (k) of sub-section (1) of section 2of the Information Technology Act, 2000 (21 of 2000); (f)“computer system” shall have the same meaning asassigned to it in clause (l) of sub-section (1) of section 2of the Information Technology Act, 2000 (21 of 2000); for randomised allocation of cases, by using suitabletechnological tools, including artificial intelligence andmachine learning, with a view to optimise the use ofresources; (d) “automated examination tool” means an algorithm for standardised examination of draft orders, by usingsuitable technological tools, including artificialintelligence and machine learning, with a view to reducethe scope of discretion; (e) “computer resource” shall have the same meaning as assigned to it in clause (k) of sub-section (1) of section 2of the Information Technology Act, 2000 (21 of 2000); (f)“computer system” shall have the same meaning asassigned to it in clause (l) of sub-section (1) of section 2of the Information Technology Act, 2000 (21 of 2000); (g) “computer resource of assessee” shall include assessee’s registered account in designated portal ofthe Income-tax Department, the Mobile App linked to theregistered mobile number of the assessee, or theregistered e-mail address of the assessee with his e-mail service provider; (h) “digital signature” shall have the same meaning as assigned to it in clause (p) of sub-section (1) of section 2of the Information Technology Act, 2000 (21 of 2000); (i) “designated portal” means the web portal designatedas such by the Principal Chief Commissioner or PrincipalDirector General, in charge of the National FacelessAssessment Centre; (j) “Dispute Resolution Panel” shall have the same meaning as assigned to it in clause (a) of sub-section(15) of section 144C; (k) “faceless assessment” means the assessment proceedings conducted electronically in ‘e-Proceeding’facility through assessee’s registered account indesignated portal; (l) “electronic record” shall have the same meaning asassigned to it in clause (t) of sub-section (1) of section 2of the Information Technology Act, 2000 (21 of 2000);(m) “eligible assessee” shall have the same meaning asassigned to in clause (b) of sub-section (15) of section144C; (n) “e-mail” or “electronic mail” and “electronic mail message” means a message or information created ortransmitted or received on a computer, computersystem, computer resource or communication deviceincluding attachments in text, image, audio, video andany other electronic record, which may be transmittedwith the message; (o) “hash function” and “hash result” shall have the same meaning as assigned to them in the Explanation to sub-section (2) of section 3 of the Information TechnologyAct, 2000 (21 of 2000); (p) “Mobile app” shall mean the application software of the Income-tax Department developed for mobiledevices which is downloaded and installed on theregistered mobile number of the assessee; (q) “originator” shall have the same meaning as assigned to it in clause (za) of sub-section (1) of section2 of the Information Technology Act, 2000 (21 of 2000); (r) “real time alert” means any communication sent to theassessee, by way of Short Messaging Service on hisregistered mobile number, or by way of update on hisMobile App, or by way of an e-mail at his registered e-mail address, so as to alert him regarding delivery of anelectronic communication; (s) “registered account” of theassessee means the electronic filing account registeredby the assessee in designated portal; (t) “registered e-mail address” means the e-mail address at which an electronic communication may be deliveredor transmitted to the addressee, including— (i) the e-mail address available in the electronic filing account of the addressee registered in designatedportal; or (ii) the e-mail address available in the last income-tax return furnished by the addressee; or (iii) the e-mail address available in the PermanentAccount Number database relating to the addressee; or(iv) in the case of addressee being an individual whopossesses the Aadhaar number, the e-mail address ofaddressee available in the database of UniqueIdentification Authority of India; or (t) “registered e-mail address” means the e-mail address at which an electronic communication may be deliveredor transmitted to the addressee, including— (i) the e-mail address available in the electronic filing account of the addressee registered in designatedportal; or (ii) the e-mail address available in the last income-tax return furnished by the addressee; or (iii) the e-mail address available in the PermanentAccount Number database relating to the addressee; or(iv) in the case of addressee being an individual whopossesses the Aadhaar number, the e-mail address ofaddressee available in the database of UniqueIdentification Authority of India; or (v) in the case of addressee being a company, the e- mail address of the company as available on the officialwebsite of Ministry of Corporate Affairs; or (vi) any e-mail address made available by the addressee to the income-tax authority or any person authorised bysuch authority. (u) “registered mobile number” of the assessee means the mobile number of the assessee, or his authorisedrepresentative, appearing in the user profile of the electronicfiling account registered by the assessee in designatedportal; (v) “video conferencing or video telephony” means the technological solutions for the reception and transmission ofaudio-video signals by users at different locations, forcommunication between people in real-time.” 8.In light of aforesaid provision, we note that the FacelessScheme, 2019 was modified by Notification No.60/2020 dated13.08.2020 wherein it had prescribed procedure for makingFaceless Assessment. In fact, the intention of Legislation asregards principle of natural justice is embodied in section itself.Thus, after 1[st] April, 2021, mandatory procedure in the form ofaforesaid provision has to be strictly adhered while doingassessment. The whole object of Legislation to introduce FacelessAssessment Scheme is to imparting greater efficiency,transparency and accountability and at the same time duty is castupon Assessing Officer to comply with mandatory provision topass objective, fair and just orders. 9.It is clear from bare reading of Section 144B of the act that the assessee is required to be given an opportunity, in casevariation is proposed in the draft assessment order upon itsexamination by NFAC and is prejudicial to the interest ofassessee. The obligation is on the assessing officer to serve ashow cause notice calling upon him to show cause as to why theproposed variation should not be made, failing which would makethe assessment nonest. This Court agrees with the submission ofthe learned advocate for writ applicant that the issue on hand is nomore res integra. We get support from the decision of this Court inthe case of Gandhi Reality ( India) (p.)(ltd.) Vs. Assistant, reportedin (2021) 133 taxmann.com 83 ( Gujarat), wherein it is held thatbreach of mandatory statutory provision itself is fatal to theassessment order. the assessee is required to be given an