M/s Suyash Buildcon V. Principal Chief Commissioner of Income Tax, National Faceless Assessment Centre and Chief Commissioner, Regional Faceless Assessment Centre, Indore and Principal Commissioner of Income Tax, Regional Faceless Assessment Centre, Raipur and Assistant Commissioner of Income Tax, National Faceless Assessment Centre

WPT/93/2021

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M/s Suyash Buildcon, a partnership firm engaged in real estate, construction, and development, filed a writ petition against the assessment order passed by the Income Tax Department under Section 143(3) of the Income Tax Act, 1961. The petitioner challenged the assessment order and the subsequent demand notices and penalty proceedings, claiming that the procedures prescribed under the newly inserted Section 144B for faceless assessments were not followed. The Income Tax Department argued that the writ petition was not maintainable as the assessment order was appealable under the Act. The court dismissed the petition, emphasizing the availability of an alternative statutory remedy and noting the retrospective amendment to Section 144B which removed the provision cited by the petitioner.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 796795 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 04-05-2022
• Assessment Year: misc
• Other Referred Cases: DJ Surfactants v. National E-assessment Centre, Income Tax Department, New Delhi, M/s Magick Woods Exports Pvt. Ltd. vs. Additional/Joint/Deputy/Assistant Commissioner of Income Tax, RKKR Foundation vs. National Faceless Assessment Centre, New Delhi, Raja Builders vs. National Faceless Assessment Centre & ors, Parag Kishorchandra Shah vs. National Faceless Assessment Centre & ors, Renew Power Private Ltd. vs. National E-Assessment Centre Delhi & ors
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: AMIT CHAUDHARY
• Assessee Lawyers: NEELABH DUBEY; SMITI SHARMA
• Keywords: Assessment Order; Faceless assessment; Income Tax; Virtual hearing; Legal and Arbitrary
• Section: 143(3); 143(2); 139(1); 270A; 144B(1)(xvi)(b)

Judgement Text

"1 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR Order Reserved on 12.4.2022 Order delivered on 04/05/2022 WPT No.93 of 2021  M/s Suyash Buildcon, a partnership firm duly constituted and registered under the provisions of the Partnership Act, 1932, having its office at Jai Anand Parisar, Jain Gali, Gandhi Chowk, Durg 491001, Chhattisgarh through one of its Partners and authorized signatory Sajal Jain, S/o Shri Devendra Jain, aged about 36 years, R/o Jai Anand Parisar, Jain Gulli, Durg Durg (CG). ---- Petitioner Versus 1. Principal Chief Commissioner of Income Tax, National Faceless Assessment Centre, Room No.401, 2nd Floor, E- Ramp, Jawaharlal Nehru Stadium, New Delhi- 110003. 2. Chief Commissioner, Regional Faceless Assessment Centre, Aaykar Bhawan, White Church Road, Indore (MP) 3. Principal Commissioner of Income Tax, Regional Faceless Assessment Centre, Aaykar Bhawan, Central Revenue Buildings, Civil Lines, Raipur (CG) 4. Assistant Commissioner of Income Tax (ACIT), National Faceless Assessment Centre, Room No.401, 2nd Floor, E- Ramp, Jawaharlal Nehru Stadium, New Delhi- 110003. ---- Respondents --------------------------------------------------------------------------------------------------- For Petitioner : Mr. Neelabh Dubey & Mrs. Smiti Sharma, Advocates For Respondent : Mr. Amit Chaudhary, Advocate. 2 Hon'ble Mr. Justice Parth Prateem Sahu, J CAV Order 1. Petitioner-Firm aggrieved by the order of assessment under Section 143 (3) of the Income Tax Act, 1961 (for short ‘the Act of 1961’) passed on 16.4.2021 has approached this Court by filing instant writ petition seeking following reliefs:- “10.1. Calling for the records of the case. 10.2. Quashing order of the Assessing Officer, dated 16.04.2021 being Annexure P/18 as being illegal and arbitrary. 10.3. Quashing all consequential demand notices including demand notice dated 16.04.2021 being Annexure P/18 . 10.4. Quashing the notice initiating penalty proceedings under S. 270A being Annexure P-19 dated 16.04.2021. 10.4. As an interim measure, staying the effect and operation of the assessment order being Annexure P-18 dated 16.04.2021 and directing the respondents to not take any coercive measures for recovery of tax demands till the disposal of this petition and also staying the effect and operation of the notice initiating penalty proceedings under S. 270A being Annexure P/19 dated 16.4.2021. 10.6. Any other relief that this Hon’ble Court may deem fit.” 3 2. Learned counsel for the petitioner would submit that petitioner Firm engaged in the business of real estate, construction and development since 2013. On 27.11.2018 petitioner submitted its return under Section 139 (1) of the Act of 1961 for the assessment year 2018-19 declaring its total income of Rs.37,42,620/- with tax liability of Rs.11,70,194/-. As petitioner has deposited advance tax of Rs.14,00,000/-, therefore, claimed refund of Rs.2,34,760/- in the return filed by it. Respondent Department served a notice under Section 143 (2) of the Act of 1961 upon the petitioner informing about initiation of scrutiny proceedings under the Computer Aided Scrutiny Selection (CASS) and called upon petitioner to furnish required documents and accounts based on specific queries. Vide letter dated 15.10.2020 petitioner was informed that petitioner’s case will be completed under the Faceless Assessment Scheme, 2019 (for short ‘the Scheme’), followed by another notice dated 19.12.2020 asking to furnish documents and accounts as per annexure to notice. Petitioner complied with queries and request/direction of respondent department of furnishing accounts and documents. Respondent Department again issued notice on 27.3.2021 questioning as to why 12.5% 4 WIP of two projects should not be treated as income of petitioner for the assessment year under consideration in view of provisions of Section 43CB of the Act of 1961. Petitioner filed its reply mentioning that query raised by the Department was already answered in reply dated 4.2.2021. Respondent Department issued notice under Section 144B (1) (xvi) (b) of the Act of 1961 along with draft assessment order proposing an addition of Rs.1,69,87,406/- to the returned income of petitioner. This notice was also responded by petitioner on 8.4.2021 and sought time on medical ground. Respondent Department completed assessment proceedings and passed an order of assessment under Section 143 (3) read with Section 143 (3A) & 143 (3B) of the Act of 1961 on 16.4.2021. Learned counsel submits that respondent department initiated assessment proceedings in the year 2020 and in the meantime, Section 144B of the Act of 1961 was inserted envisaging procedure to be followed by the Income Tax Department for carrying out assessment process in a faceless manner. Respondent Department following procedure prescribed under Section 144B of the Act of 1961, completed assessment proceedings and concluded 5 that there is variation prejudicial to the interest of assessee, and accordingly issued notice along with draft assessment providing opportunity of hearing to assessee. After receipt of notice along with draft assessment, petitioner submitted application on 14.4.2021 requesting for grant of an opportunity of hearing (virtual hearing) before proceeding further in the matter, mentioning descriptive reasons for virtual hearing. Respondent department paid no heed to the request of petitioner for virtual hearing and on 16.4.2021 passed assessment order under Section 143 (3) read with Section 143 (3A) & 143 (3B) of the Act of 1961. It is contended that newly inserted provisions under Section 144B of the Act of 1961 came into effect from 1.4.2021, according to which, where a variation prejudicial to interest of assessee is proposed in draft assessment order or final assessment order or revised draft assessment order, assessee or its representative, as the case may be, may request for personal hearing to make his oral submission or present his case before the Income Tax Authority. Petitioner made request for virtual hearing which was not considered and thereby respondent authorities have acted contrary to the procedure prescribed under Section 144B of the Act of 1961. Hence, the entire assessment proceeding is 6 non-est in view of provisions of Section 144B (9) of the Act of 1961 and are liable to be quashed. In support of above contention, learned counsel places reliance on the order of High Court of Delhi dated 3.5.2021 in WPC No.4814/2021 (DJ Surfactants v. National E-assessment Centre, Income Tax Department, New Delhi); order dated 28.4.2021 passed by High Court of Madras in WP No.10693/2021 & WMP Nos.11326 and 11327/2021 (M/s Magick Woods Exports Pvt. Ltd. vs. Additional/Joint/Deputy/Assistant Commissioner of Income Tax); order dated 17.5.2021 passed by Delhi High Court in WPC No.5277/2021 (RKKR Foundation vs. National Faceless Assessment Centre, New Delhi); order dated 10.5.2021 passed by Delhi High Court in WPC No.5234/2021 & CM Nos.16065- 67/2021; order dated 13.5.2021 passed by Bombay High Court in WPL No.11224/2021 (Raja Builders vs. National Faceless Assessment Centre & ors); order dated 6.5.2021 passed by Bombay High Court in WPL No.11052/2021 (Parag Kishorchandra Shah vs. National Faceless Assessment Centre & ors); order dated 19.5.2021 passed by Delhi High Court in WPC No.5235/2021 & CM Appl. No.16068/2021 (Renew 7 Power Private Ltd. vs. National E-Assessment Centre Delhi & ors); 3. Learned counsel for respondents would submit that assessment order dated 16.4.2021 passed by respondent is appealaable under Section 246A of the Act of 1961 before the Commissioner of Income Tax (Appeals) (CIT) and thereafter further appeal is provided under Sections 254 & 260A of the Act of 1961. Petitioner has directly come to this Court against the order of assessment without availing efficacious alternative remedy available under the law. Hence writ petition is not maintainable and it is liable to be dismissed. However, factual submissions made by learned counsel for petitioner based on Page No.100 of writ petition that petitioner made request for virtual hearing (personal hearing) on 14.4.2021 is not disputed by learned counsel for respondents. In support of his contention, he places his reliance on the orders passed this High Court in WPT Nos.60/2016, 64/2018, 91/2018, 2/2019, 142/2021; WA No.293/2017. 4. In reply to objection with regard to maintainability of writ petition, learned counsel for petitioner submits that as there is non-compliance of the provisions contained in Section 144B of the Act of 1961 which 8 itself provides that any proceeding initiated for assessment, which is not made in accordance with procedure laid down under Section 144B of the Act of 1961, shall be non-est. Hence writ petition is maintainable. 5. I have heard learned counsel for the parties and perused the documents available on record. 6. Main thrust of learned counsel for petitioner at the time of submission of his case on merits is that non- following of the procedure prescribed under Section 144B of the Act of 1961 will make the proceedings non-est. The Ministry of Law and Justice (Legislative Department), New Delhi issued Gazette Notification dated 30.3.2022 wherein sub-section (9) of Section 144B of the Act of 1961 has been omitted w.e.f. 1.4.2021. By virtue of amendment brought in by the Legislature, the ground raised before this Court is not available as said provision itself stood omitted from the statute book with retrospective effect. Petitioner is having efficacious alternative statutory remedy of filing appeal before the appellate authority who can consider and decide other issues raised in this writ petition. 7. For the foregoing reasons, I am not inclined to entertain this writ petition as the petitioner is having 9 efficacious alternate statutory remedy of appeal and it is accordingly dismissed. Petitioner may approach Appellate Authority under the Act of 1961 raising all grievances and grounds, as raised in this petition. If petitioner prefers an appeal within a period of thirty days from today, the Appellate Authority shall consider and decide the same on its own merits in accordance with law. Sd/- (Parth Prateem Sahu) Judge roshan/- "