MUJTABA MARINE PRIVATE LIMITED V. ADDITIONAL/ JOINT/ DEPUTY/ ASSITANT COMMISSIONER OF INCOME TAX/ INCOME-TAX OFFICER

SCA/7697/2021

AI Insights

Mujtaba Marine Private Limited filed a petition under Article 226 of the Constitution of India against the assessment order passed by the Income Tax Department, which treated a significant amount as bogus purchases and added it to the company's income. The petitioner argued that the assessment was made without proper adherence to the principles of natural justice, particularly during the COVID-19 pandemic when an adjournment request was made but not considered. The Income Tax Department contended that the petitioner had been given ample opportunity to respond to the notices and failed to do so. The court examined the procedural compliance under the faceless assessment regime introduced by Section 144B of the Income Tax Act and found that the department had not followed the required procedures, leading to the quashing of the assessment order.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 766309 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 23-12-2021
• Assessment Year: misc
• Other Referred Cases: Gandhi Realty (India) Private Ltd Vs Assistant/Joint/ Deputy/ Assistant Commission of Income Tax Officer, Sribasta Kumar Versus Union of India and another, Gurgaon Realtech Limited versus National Faceless Assessment Centre Delhi, Rani Promotors Private Rotomoter Pvt. Ltd. Versus Additional Commissioner of Income Tax
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M R BHATT CO
• Assessee Lawyers: DARSHAN GANDHI
• Keywords: Adjournment request; Bogus purchase; Faceless assessment; Natural Justice; Scrutiny assessment
• Section: 143(3); 143(2); 143(1); 144B; 69(c); 115(B)(D)(E); 270(A)(C)(1)

Judgement Text

"C/SCA/7697/2021 ORDER DATED: 23/12/2021 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 7697 of 2021 ========================================================== MUJTABA MARINE PRIVATE LIMITED Versus ADDITIONAL/ JOINT/ DEPUTY/ ASSITANT COMMISSIONER OF INCOME TAX/ INCOME-TAX OFFICER ========================================================== Appearance: MR DARSHAN B GANDHI(9771) for the Petitioner(s) No. 1 M R BHATT & CO.(5953) for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 23/12/2021 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) This is a petition preferred under Article 226 of the Constitution of India For the A.Y 2018-2019 the petitioner had filed the return of income on 26.10.2018 by declaring the total income as Rs 5,20,690/-. It was processed under Section 143 (1) of the Income Tax Act (hereinafter to be referred as “ITAT” Act”) and communicated to the petitioner on 17.4.2019. 2. The notice under Section 143(2) dated 26.9.2019 was issued on the petitioner and return of the petitioner was selected for scrutiny assessment. 3. On 27.4.2021, a show cause notice was issued to the petitioner proposing to finalise the assessment as per the draft assessment order. 4. It further emerges that an adjournment application was sought by the petitioner seeking 15 days’ of time, on account of the lockdown because of the pandemic due to Covid 19 as it was not Page 1 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 feasible for the petitioner to comply with the directions. 5. Instead of responding to the said request of adjournment the assessment order came to be passed under Section 143(3), by holding that the assessee did not respond to the final show cause notice dated 27.4.21 and hence, the respondent had presumed that the assessee had nothing to offer in this regard and therefore, the additions have been made whereby the total amount of Rs 7,67,73,664 is treated as bogus purchase and added to the total income of the assessee under Section 69( C) of the Income Tax Act. Such income thus is brought to the tax within the meaning Section 115 (B)(D) (E) of the Act and the penalty proceedings under Section 270 (A) (C) (1) of the I.T Act has been initiated. 6. This has seriously aggrieved the petitioner as the demand notice also has also been sent on 10.5.21. He has approached this Court by raising the serious grievance of breach of principles of natural justice and also for not adhering to the spirit of faceless assessment scheme as under: “14(A) This Hon’ble Court be pleased to call for the records of the proceedings, look into them and be pleased to issue a writ of certiorari or any other appropriate writ, order or direction quashing the assessment order passed by the respondent under Section 143(3) r.w.s 144 B of the Act dated 10.5.2021 at Annexure H and demand notice under section 156 of the Act dated 10.5.2021 at Annexure I (Coll.) and further direct the respondent to pass a fresh assessment order u/s 143(3) of the Act after providing opportunity of furnishing submissions in response to the show cause ntoice cum draft assessment order at Annexure D and E; B) Pending the hearing and final disposal of the application, this Hon’ble Court be pleased to stay operation and implementation of assessment order passed under section 143(3) r.w.s 144B of the Act dated 10.5.2021 at Annexure H and demand notice issued u/s 156 of the Act at Annexure I (Coll.) and further stay the recovery of demand in Page 2 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 pursuance of notice issued under section 156 of the Act at Annexure I. (C ) This Hon’ble Court be pleased to grant any further relief asthis Hon’ble Court deems just and proper in the interest of justice. (D) This Hon’ble Court be pleased to allow this application with costs against the respondent. “ 7. On issuance of notice by this Court, the respondents has responded to the same by affidavit-in-reply by the ITO Ms Rupa Shankar Prasad denying each and every averment. 7.1 According to the Revenue, it is not in dispute that the return of the petitioner needed the scrutiny, hence, notice under Section 142(1) has been issued calling for the details of the parties and entities from whom the purchases of Rs 11,52,16, 211 were made during the A.Y 2018-2019. The first notice was of 10.12.2020 with a request to provide the details on or before 24.12.2020 and thereafter, the reminders were sent on 28.12.20, 5.1.21, 25.2.21, 1.3.21, 22..3.21 which were served upon the assessee and thus, in all , six months’ period was granted to the assessee and he failed to provide these details and therefore, the final show cause notice was issued on 27.4.21 fixing the date of compliance on 3.5.21. It is contended further that he since did not reply to the final show cause notice, considering the prevalent situation, the reply was awaited till 9.5.21 and thereafter, on 10.5.21 the assessment was finalised after finding no response on ITBA Portal. 7.2 It is denied that any request had been sent by the assessee on 2.5.2021 in ITBA Portal and therefore, the order under Section143 (3) read with Section 144(B) of the Act was duly passed and no interference, according to the respondents, is Page 3 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 desirable. On merits also, much has been argued as to how the list of 32 parties without any email ids is indicative of the fact that the purchase transactions of the petitioner were found to be bogus. It is however, contended that the Court may choose not to enter into the merit of the matter. 8. We have heard extensively learned advocate Mr. Darshan Gandhi for the petitioner and learned Senior advocate Mr. Manish Bhatt assisted by learned advocate Mr Karan Sanghani for the Revenue. 9. The core question that we are required to address is as to whether there is a mechanism in place to allow the petitioner to make a request for the adjournment, since, it is a faceless assessment regime. The dispute is with regard to the application for adjournment sent by the petitioner as is reflected in e-filing portal of the Income Tax Department, Government of India and the true copy of the same is produced by the petitioner which reflects that such request on 3.5.2021 was made for adjournment due to pandemic.(annexure F pg 56). PAN/TAN details AAFCM9812Q Notice Section 143(3) Description Notice issue date Detailed Reason Respected Sir/Madam, Sub. Request to extend the date of compliance fo the show cause notice dated 27.4.2021 bearing DIN:ITBA/ADT/F/143(3) (SCN)/2021- 22/10326988458(1) due to lockdown, in our city on account of covid 19 pandemic your good self is requested to kindly extend the date of compliance of the above referred Page 4 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 notice fixed on 3.5.2021 for fifteen days. Yours Sincerely for Mujtaba Marin Pvt. Ltd. Sd/- Director. Response due date Adjournment Request Reason for adjournment 27.4.2021 Suo Moto 17.5.2021 Open 2.5.2021 Others Adjourned suo Moto 3.5.2021 3.5.2021 Suo Moto It is not in dispute by the petitioner that he has received all the notices which had been sent to him on earlier occasions. In response to the notices which has been sent by the department, the replies sent by the petitioner were on 20.1.2021, 28.1.2021, 25.2.2021, 9.3.2021, 12..3.2021. According to the petitioner thereafter 18.3.2021, 25.3.2021. All covering letters have come on record and according to learned advocate for the petitioner total volume of documents would be more than 700 pages uploaded on the website of the Income Tax portal. 10. As could be noticed from the affidavit-in-reply filed by the respondent where it has emphatically urged before this Court that the assessee failed totally in providing the complete details which have been called for by way of different notices and reminders and final show cause notice was not replied to as well and on considering sympathetically the pandemic situation, a week further was allowed to go and thereafter, the draft assessment order has been finalised. This according to the respondent should be construed as sufficiently availed opportunity for the petitioner. 11. In our opinion, the action of the respondent is contrary to the requirement of the provisions of Section 144(B) the faceless assessment which has been inserted by taxation and laws has Page 5 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 been inserted w.e.f 1.4.2021. We need to at the outset to remind the respondent that 144B(9) provides that notwithstanding anything contained in any other provision of this Act, an assessment made under sub section (3) of Section 143 or Section 144 or in cases referred to in subsection 2 (other than the cases transferred under Subsection 8 Section 144 B) on or after first day of April 2021 shall be nonest, if such assessment is not made in accordance with the procedure laid down under this section. 12. At this stage the reference would also be necessary to subsection (7) of Section 144 B, more particularly, sub clause (xii) which provides thus :- “(xii) the Principal Chief Commissioner or the Principal Director General, in charge of the National Faceless Assessment Centre shall, with the prior approval of the Board, lay down the standards, procedures and processes for effective functioning of the National Faceless Assessment Centre, Regional Faceless Assessment Centres and the unit set up, in an automated and mechanised environment, including format, mode, procedure and 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 the person in response to the notice, order or any other communication; (c) issue of acknowledgement of the response furnished by the person; (d) provision of “e-proceeding” facility including login account facility, tracking status of assessment, display of relevant details, and facility of download; (e) accessing, verification and authentication of information and response including documents submitted 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; Page 6 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 (h) circumstances in which personal hearing referred to clause (viii) shall be approved; (i) general administration and grievance redressal mechanism in the respective Centres and units.” 12.1 This provides for the laying down of the standards procedure and process for effective functioning the national faceless assessment, regional faceless assessment and the unit set up and automated and mechanised environment including the format mode procedure and processes with the prior approval of the Board in relation to the circumstances and the personal hearing referred to needs to be approved. The standard operating procedure (SOP) for assessment unit under faceless assessment scheme 2019 as laid down by Principal Chief Commissioner of the Income Tax national assessment center with the prior approval of Central Board of Direct Taxes, New Delhi on 19.11.2020 has been placed before this Court. 12.2 This SOP does not provide for any specific time period either for response or for availing an opportunity for personal hearing. It says that once the notice is sent to the assessee through NEFC with the approval of the unit head of the AO , response time usually and normally shall be of 15 days, to be given to the assessee for compliance of the notice under Section 142(1) from the date of issuance of the notice. It is advisable that time may be reduced to 7 days for subsequent notices, however, this time guidelines must keep in view the period of limitation for completing the assessment. It does not provide anywhere as to in what manner it should operate and what is the time period to be given after once the final show cause notice along with the draft assessment order is served upon the petitioner. It simply speaks of the reasonable time period . Page 7 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 13. This Court in case of Gandhi Realty (India) Private Ltd Vs Assistant/Joint/ Deputy/ Assistant Commission of Income Tax Offiicer in SCA 7662 of 2021 dated 5.10.2021 has extensively dealt with the issue of making available the opportunity of hearing to the parties lest the final assessment shall be rendered non est. Relevant findings and observations read as under :- 7.05 It is pertinent to note that this introduction of faceless assessment under Section 144B has revolutionised the very regime of assessment in very many ways and at the same time, there are bound to be certain hiccups while implementing and creases also to be ironed out at the level of department. For the officials and assessee also, acceptance of change, its comprehension and implementation in true purport is a challenge as well. 7.06. Various issues arise in relation to the implementation of this provision, some due to limitation in comprehension, other for want of requisite training after its introduction and still others are begging the change of mindset. 7.07. This provision starts with non-obstant clause and it warrants service of notice to the assessee in case of scrutiny assessment under section 143(3) and 144(2) be replied to by the assessee in 15 days’ time, after allocation through automated system to any Regional Faceless Centre. 7.08. For fulfilling the need of document etc. the request of an assessment unit from regional faceless centre also shall be through Faceless Assessment Centre. 7.8.1. Once there is a need to make reference to verification unit or technical unit, it is necessarily to be done through NFAC only and in absence of any response of assessee, the NFAC would serve a notice under section 144 of the I.T. Act as to why the best judgement assessment be not finalised and still if nor responsive, the concerned unit which is allocated the assessment would need to prepare draft assessment order to be sent to NFAC and even when information called for, in clause (xii) have been received, the draft assessment order needs to be prepared with or without variations as ends also specifying penalty, if any. 7.09. The National Faceless Assessment Centre shall examine the draft assessment order in accordance with the risk management strategy specified by the Board, if there is variation prejudicial to the interest of the assessee, it can finalise the assessment and serve copy of the order and notice to the assessee for initiating penalty proceedings, or for refund of any amount. However, when there is question of any variation, which may prove to be prejudicial to the interest of assessee, it is obligated to provide an Page 8 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 opportunity to the assessee by serving a notice and calling upon him to show cause as to why proposed variation be not made or it has the third option of sending it back to the Regional Faceless Assessment Centre for conducting review of such order; 7.10. It is quite clear from the very provision that the assessee is required to be provided an opportunity once there is a possibility of any variation which may turn prejudicial to the interest of the assessee. What is expected of the NFAC is to serve a notice calling upon the assessee to show cause as to why the proposed variation be not made. This has to be done by furnishing Draft Assessment Order along with show cause notice. I It is in other words, statutory obligation of the NFAC is to serve upon the assessee the show cause notice along with the draft assessment order for the assessee to be availed the opportunity with regard to the variation proposed. It goes without saying that calling upon the assessee as provided under clause (v) or (vi) or (viii) and availing opportunity thereunder or its failure to utilise such opportunity or its failure to response would not permit NFAC or any authority to finalize the assessment once there is a variation proposed, prejudicial to the interest of the assessee. 7.11. With the advent of technology and with resorting to virtual mode, more meticulous conduct is expected from all concerned. Technology has made it extremely easy the aspect of service of notice, order, draft order etc. and here in Faceless Regime, placing in assaessee’s registered account, sending to the e-mail or uploading in mobile APP, is a due service which can never be missed and its trail is easily found, therefore, service or non-service also is no longer an issue and the time and place of dispatch and receipt of electronic record is detained in accordance with the provisions of section 13 of the Information Technology Act, 2000.. 7.12. Sub-section (9) of section 144B clearly provides that the assessment would be non-est if the said provision is not followed procedurally on or after 01.04.2021. This depicts a clear legislative intent that every step and stage of procedural requirement of this provision is needed to be regarded with matching seriousness. 8. The Orissa High Court in the case of Sribasta Kumar Versus Union of India and another in WP © No.29279 of 2021, was examining the issue where principal ground on which the assessment order had been challenged that was, that the mandatory requirement under section 144B of the Act has not been complied with prior to issuance of the Page 9 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 assessment order, wherein the Court held thus: “5. It is obvious that in the present case the impugned assessment order was passed without communicating to the Petitioner any draft order of assessment under Section 144B of the IT Act. 6. In view of the clear legal position explained in the above judgments, on the above short ground this Court sets aside the impugned order of assessment dated 8th September, 2021 of the NFAC as well as all consequential notices/orders. The Court nevertheless grants liberty to the Department to pass a fresh assessment order for the AY 2017-18 after complying with the requirement of the law by giving the Petitioner a personal hearing at a date and time, which should be communicated to the Petitioner sufficiently in advance. It is needless to say that the Petitioner assessee will cooperate in the fresh assessment proceedings and furnish all the documents and information as are available with it relevant to the proceedings.” 9. The Delhi High Court in W.P.(C) 5849/2021 in the case of Gurgaon Realtech Limited versus National Faceless Assessment Centre Delhi (Earlier national Eassessment Centre Delhi), delivered on 04.06.2021 was considering the identical issue where challenge to the assessment order was passed on the ground of the same having been passed without jurisdiction. Following are the findings and observations which deserve reproduction. “9. We have considered the submissions made by the learned counsel for the parties. 9.1. To our minds, if the challenge to the assessment order is made on the ground that it was passed without jurisdiction, then, notwithstanding the fact that an appeal was filed, albeit, only to ensure that the limitation is not crossed, is not an impediment in proceeding ahead with the matter. In this particular case, the reason that we are proceeding ahead with the matter, is that, we are persuaded by the arguments advanced by Mr. Vohra that the impugned assessment order dated 15.04.2021 could not have been passed under Section 143(3A) and 143(3B) after March 31, 2021, having regard to the provisions of Section 143(3D) of the Act. For the sake of convenience. the said provisions are extracted below: \"Section 143. Assessment XXXXXX (3A) The Central Government may make a scheine, by notification in the Official Gazene, for the purposes of making assessment of total income or loss of the assesser under sub-section (3) so as to impart greater efficiency, transparency and accountability by (a) climinating the interface between the Assessing Officer and the assessee in the course of proceedings to the extent Page 10 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 technologically feasible: th) opumising utilisation of the resources through economics of scale and functional specialisation (c) introducing a team-based assessment with dynamic jurisdiction. (3B) The Central Government may, for the purpose of giving effect to the scheme made under subsection (3A), by notification in the Official Gazette, direct that any of the provisions of this Act relating to account of total income or loo shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification Provided that no direction shall be issued after the 31st day of March, 2021, XXX (3D) Nothing contained in sub-section (3A) and sub- section (3B) shall apply to the assessment made under sub- section (3) or under section 144, as the case may be, on or after the 1st day of April, 2021) 9.2. Besides this, Mr. Vohra is also right in his contention that the CBDT notification dated 31.03.2021, to which, we have made a reference. hereinabove, also says, in effect, the same thing, i.c., that after 01.04.2021, the assessment order could have only have been passed in consonance with the provisions of Section 144B of the Act. 10. In view of the foregoing reasons, we are inclined to set aside the impugned assessment order dated 15.04.2021 as also the notice of demand issued under Section 156 of the Act and the notice for initiating penalty) proceedings issued under Section 274 read with Section 270A of the Act. 10.1. That being said, the respondent/revenue will have liberty to proceed with the assessment process, albeit, under the provisions of Section 144B of the Act. Needless to add, if a show cause notice-cum-draft assessment order is served on the petitioner, an opportunity would be given to the petitioner to file its response/objections to the same. Furthermore, if there is a variation proposed in the income of the petitioner, an opportunity of personal hearing will also be accorded. In sum, the procedure prescribed under Section 144B of the Act will be followed by the respondent/ revenue.” 10. The Delhi High Court in the case of in W.P.(C) 6662/2021 in the case of Rani Promotors Private Rotomoter Pvt. Ltd. Versus Additional Commissioner of Income Tax on 19th July, 2021 also considered the same question. The court availing an opportunity of hearing be set aside the impugned order which was passed availing such opportunity. Relevant paragraphs of the aforesaid Page 11 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 decisions read thus: “ 12. In any event, this issue is no longer res integra as a Coordinate Bench of this Court in Gurgaon Realtech Limited v. National Faceless Assessment Centre Delhi, W.P. (C) 5849/2021 has held that the Assessment Order could not have been passed under Section 143(3A) and 143(3B) of the Act by the Revenue after 31st March, 2021 having regard to Section 143(3D) of the Act. 13. This Court also agrees with the submissions of the learned counsel of the Petitioner that there was failure on the part of the Respondents to comply with the mandatory obligation laid down in Section 144B (1) (xvi) of the Act inasmuch as there was non-service of prior notice and draft assessment order. The relevant portions of Section 144B xvi (a) and (b) as well as Section 144B(9) of the Act are reproduced hereinbelow: \"144B. (1) Notwithstanding anything to the contrary contained in any other provisions of this Act, the assessment under sub section (3) of section 143 or under section 144, in the cases referred to in sub-section (2), shall be made in a faceless manner as per the following procedure, namely: (xvi) the National Faceless Assessment Centre shall examine the draft assessment order in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to - (a) finalise the assessment, in case no variation prejudicial to the interest of assessee is proposed, as per the draft assessment order and serve a copy of such order 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. amount due to, the assessee on the basis of such assessment; or (b) provide an opportunity to the assessee, in case any variation prejudicial to the interest of assessee is proposed, by serving a notice calling upon him to show cause as to why the proposed variation should not be made; or assign the draft assessment order to a review unit in any one Regional Faceless Assessment Centre, through an automated allocation system, for conducting review of such order. (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 referred to in sub-section (2) [other than the cases transferred under subsection (8)], on or after the 1st day of April, 2021, shall be non est if such assessment is not made in accordance with the procedure laid down under this section.\" (emphasis Page 12 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 supplied) 14. Keeping in view the aforesaid, this Court is of the opinion that learned counsel for the petitioner is correct in submitting that Section 144B of the Act had been violated and the assessment proceeding had been completed in the present case in violation of the principles of natural justice. 15. Consequently, this Court sets aside the impugned assessment order dated 06th April, 2021 as also the notice of demand issued under Section 156 of the Act and the notice for initiating the penalty proceedings under Section 274 read with Section 270A of the Act. 11. Reverting to the facts of the case on hand, we could notice from the chronology of the events presented before us by the respondent authority that the return of the petitioner Company was selected for scrutiny and notice u/ s 143(2) of the Act was issued on 22.09.2019. Date of hearing was fixed on 07.10.2019. Various responses have been given by the petitioner. It also sought time and review was also filed. Opportunity for filing reply and furnishing the document was granted. The assessee was also informed on 15.10.2020 about transfer of proceedings to the NFAC and notice was also issued to the assessee by the Regional Reassessment Centre on 04.01.2021 u/s. 142(1) of the Act. Notice of NFAC to the petitioner was issued on 03.02.2021 under section 142(1) of the Act. 12. It appears from the assessment order which is claimed to have been placed for transfer on 08.04.2021 and averred to have been served upon the assessee under the communication dated 12.04.2021, is missing on the Web Portal of the Income Tax Department. Assessment order issued u/s 144B of the Act on 20.04.2021 along with the Demand Notice have been served upon the petitioner. Barring the Draft Assessment Order, rest of all the documents are already found on the web portal of the respondent department. 13. It would be apt to refer to sub-sections (5) and (6) of section 144B, which provide that all communications among the assessment unit, review unit, verification unit or technical unit or with the assessee or any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making a faceless assessment shall be through the National Faceless Assessment Centre and all communications between the National Faceless Assessment Centre and the assessee, or his authorised representative, or any other person shall be exchanged exclusively by electronic mode; and all internal Page 13 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 communications between the National Faceless Assessment Centre, Regional Faceless Assessment Centres and various units shall be exchanged exclusively by electronic mode. The proviso would not be necessary to be discussed at this stage which concerns inquiry or verification conducted by the verification unit. 14. Sub-sections (7) of section 144B provides that for the purposes of faceless assessment an electronic record shall be authenticated by the National Faceless Assessment Centre by affixing its digital signature and by assessee or any other person, by affixing if required his digital signature if he is required under digital signature. 15. Sub-section (2) of section 114 (B) says that every notice or order or any other electronic communication shall be delivered to the addressee, being the assessee, by way of placing an authenticated copy thereof in the assessee’s registered account; or by sending an authenticated copy thereof to the registered email address of the assessee or his authorised representative; or uploading an authenticated copy on the assessee’s Mobile App. Thus, there is specific requirement for service by electronic mode and in absence of placing before this Court any proof of virtual exchange or authenticated copy of service to the assessee, there is no reason for this Court to accept the version of the respondent about the service. 16. We are in total disagreement with the revenue that on account of issuance of notice u/s. 143(2) dated P22.09.2019 and opportunities provided earlier to the assessee, acceding to his request would be a mitigating circumstance so far as non-service of the Draft Assessment Order is concerned. The opportunity of furnishing the documents and hearing which has been given time and again and requests acceeded to by the authority to the assessee at that stage would not eventually culminate into furnishing of the final assessment order without service of prior notice along with draft assessment order, if any additions are made to the prejudice of the assessee. 17. It is a statutory requirement, as discussed hereinabove, more particularly when any assessment order is to be made which is likely to be prejudicial to the interest of the assessee. NFAC if would have served upon the assessee the draft assessment order, its presence on web portal would invariably there. In virtual regime, noticing of or presence or absence of trail of action is not a herculian task. Thus, in absence of any proof, the version of the respondent simply cannot be accepted. We could further notice from the documents which have been furnished by the petitioner Page 14 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 that authenticated copy of notice/ order is not served to the petitioner when otherwise all other documents on the web portal of the income tax department are existing. We have sought assistance from the learned advocate of both the sides to point out to us due service of the draft assessment order, as has been claimed by the respondent, however, the said order dated 12.04.21 has been duly served to the petitioner, show cause notice which is claimed to have been issued along with the draft assessment order are surely missing. This being a simple case of statutory non-compliance of the provision, the same would amount to breach of not only principles of natural justice, but also, of the action in complete disregard to the statutory provision. And therefore, the order of the respondent passed without following the mandate given by the statute under section 144B of the Act deserves to be interfered with by quashing and setting aside the same.”. 14. In the instant case, as could be noticed from the request which has been made by the petitioner on 2.5.2021, it is a request for 15 days’ time due to the lock down in the city on account of covid 19. It was an unprecedented time and the second wave was already in progress. Not only the circular which has been issued provides for a reasonable time and eventhough it does not specify the time period, it is always the discretion of the authority concerned to consider such request. More particularly, when even the statutory time limit had already been extended by the Apex Court by virtue of its extraordinary jurisdiction for the larger cause of serving the citizens at the pandemic time. It was not unreasonable on the part of the assessee concerned to make a request for 15 days’ of time on 2.5.2021 and it is also noticeable to refer at this juncture that after the receipt of last notice, such request was made within the 7 days of last final notice served upon the petitioner along with the draft assessment order. The SOP provides for grant of 15 days’ time for initial notice, and for subsequent noticed a period of 7 days’, the request for adjournment on behalf of the petitioner had come within 7 days Page 15 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 and hence, that ought to have been considered by the authority concerned instead of finalising the assessment by making a huge addition. It could have surely availed the opportunity of hearing to the party as was requested for noticing unprecedented period of pandemic and also respecting the SOPs prepared by the department itself. 15. We are conscious of the fact that the respondent has also produced before this Court the auto generated order sheet which does not reflect this application for adjournment, however, the fact is not denied that on e-filing portal of Income Tax Department, the request was sent on 2.5.2021 and the same is reflected clearly. Neither in the affidavit-in-reply nor thereafter by any mode, this has been disputed by the respondent. Even otherwise, once this has been uploaded on the portal of the department itself, there is no reason in any manner to question this sending of the request by the petitioner who has also stated on oath and that factum is once having clearly established, the non- reflection of the same on the automated generated order sheet will have no bearing on the entire issue. It is ultimately being maintained by the department itself and it is for it to question itself as to why this communication has not been reflected. Once the department gears up to promote the objective of faceless regime, it also is required to have a matching pace for technological advancements and any glitch if has adverse impact on the individual assessee, the same deserves judicious and fairer approach on the part of the department. Even when such prejudice is unintended nevertheless when it is a matter of fact, it deserves to be fairly rectified. 16. According to learned advocate Mr. Gandhi appearing for the petitioner the change in the software with updating of the same Page 16 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 with the version at 2.01, may be one of the reasons why this order sheet has not been updated and the website is not reflecting the documents. There is no instruction received by the learned senior counsel appearing for the department. We do not need to venture into as to how the technically upward version has resulted into the non-reflection of the documents which run into 700 pages nearly. The only aspect that can be deduced from the material which has been placed before the department because of certain technicalities and technical glitch did not come to the notice of the department and when only mode available for any assessee is to approach the officer is through the portal, once such request is made, onus would surely be of the respondent to acknowledge. Before this Court, the SOPs meant for the assessment unit under the faceless regime have not been placed and it can be held without any semblance of doubt that they have not been adhered to in the manner was required. Thus, as the request for hearing of the adjournment is not considered, much less granted in the situation which prevailed, this amounts to serious prejudice caused to the petitioner. 17. In a faceless regime, the aim is to bring transparency and objectivity through non accessibility of assessing officer which is a welcome step, brought about with a laudable objective. However, faceless regime cannot be allowed to become ear less regime. What is needed to be done had the regular procedure of assessment been followed, the same would apply to faceless assessment, and had such application been received in a pandemic period like the one which prevailed, grant of adjournment would have been debateless. This entire regime has been brought to the statute to curb certain undesirable weaknesses and strengthen the system, with complete transparency with the help of technology, however, the same should not and could not have put the assessee to any king of jeopardy where they would have Page 17 of 18 C/SCA/7697/2021 ORDER DATED: 23/12/2021 nowhever to turn to. And therefore, we deem it appropriate since the final assessment has been passed in a complete breach of non-availment of the principles of natural justice and non-availment of opportunity of furnishing the submissions in response to the final show cause notice when the draft assessment which has resulted into huge addition in the assessment finalised, we quash the order dated 10.5.2021 and also the demand notice under Section 136 considering the legal infirmity the impugned order suffers. The Court would also deem it appropriate to relegate the petitioner to the stage where this has resulted into causing injustice to the assessee. 18. As show cause notice has already been served and replied to by the assessee till March 2021 and issue is in relation to the last and final show cause notice served upon the petitioner along with the draft assessment order, let the time of two weeks be given to the assessee from the date of receipt of the copy. The same shall be responded to along with the accompanied documents and then the assessment order shall be finalised following the due procedure. 19. The petitioner if chooses to seek the personal hearing the same shall be accorded in accordance with law. None of the findings and observations shall have any adverse impact on the case of either side and we have chosen not to opine anything on merit at all. (SONIA GOKANI, J) (NISHA M. THAKORE,J) MARY VADAKKAN Page 18 of 18 "