Madras High Court
Sri Sns Charitable Trust vs Additional/Joint/Deputy/Assistant on 3 January, 2025
Author: C.Saravanan
Bench: C.Saravanan
W.P.No.24631 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved On 06.09.2024
Pronounced On 03.01.2025
CORAM:
THE HONOURABLE MR.JUSTICE C.SARAVANAN
W.P.No.24631 of 2021
and W.M.P.Nos.25902 & 25903 of 2021,
2164 of 2022, 32878 & 32880 of 2023
Sri SNS Charitable Trust,
Represented by its
Managing Trustee Mrs.S.Rajalakshmi
536, Thudiyalur – Saravanampatti Road,
Vellakinar Post,
Coimbatore – 641 029
... Petitioner
Versus
1.Additional/Joint/Deputy/Assistant
Commissioner of Income Tax/
Income Tax Officer,
National Faceless Assessment Centre,
Delhi.
2.The Joint/Additional Commissioner of Income Tax,
National Faceless Assessment Centre,
Delhi.
... Respondents
Writ Petition filed under Article 226 of the Constitution of India,
for issuance of a Writ of Certiorari to call for the records on the file of the
First Respondent and quash the impugned order in PAN:AABTS7079L
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Page No.1 of 35
W.P.No.24631 of 2021
dated 28.09.2021 in DIN.ITBA/AST/S/143(3)/2021/22/1035982293(1)
passed under Section 143(3) read with Section 144B of the Income Tax
Act, 1961 for the Assessment Year 2018-19.
For Petitioner : Ms.N.V.Lakshmi
For Respondents : Mr.V.Mahalingam,
Senior Standing Counsel
ORDER
The petitioner is before this Court as against the impugned
Assessment Order dated 28.09.2021 passed under Section 143(3) read
with Section 144B of the Income Tax Act, 1961 for the Assessment Year
2018-2019.
2. Relevant portion of the impugned order reads as under:-
“9. Upon considering the return of income filed, submissions
made and details/documents filed, the total income of the assessee is
computed as under:-
Particulars Rs. Rs.
Income as
per Income
Expendi-
ture ac-
count
92,44,66,677
Less
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Particulars Rs. Rs.
Income as
per Income
Expendi-
ture ac-
count
1.Expenses on ob- 51,77,58,568
ject of the trust)
2.Accumulation u/s 6,09,06,149
59,59,66,677
11(1)(a) @ 15% (to
the extent income
available)
3.Capital expendi- 1,73,01,960
ture
TOTAL INCOME 32,85,00,000
ROUNDED OFF TO 32,85,00,000
10. Assessed u/s. 143 (3) rws 144B of the I.T.Act, 1961.
Credit is given for taxes paid after due verification. Computation of
tax and interest is as per ITNS-150 which forms a part of this order.
Demand notice/refund is issued accordingly. Issue penalty notice
u/s. 270A for under reporting of income.”
3. The specific case of the petitioner is that the petitioner has made
an application before the 2nd respondent namely the Joint Commissioner
under Section 144A of the Income Tax Act, 1961, for issuance of such
direction as he may think fit for the guidance of the Assessing Officer to
enable him to complete the Assessment.
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4. It is submitted that Section 144A of the Income Tax Act, 1961
was inserted with effect from 01.04.2021 and is a complete code in itself.
However, assessment has been completed under Section 143(3) read with
Section 144B of the Income Tax Act, 1961 is in gross violation of
the principles of natural justice.
5. The learned counsel for the petitioner would submit that even
though an application was filed on 13.09.2021 for a direction under Sec-
tion 144A of the Income Tax Act, 1961, the assessment was completed
on 28.09.2021 without awaiting for orders of the Joint Commissioner un-
der Section 144A of the Income Tax Act, 1961. That apart, it is submit-
ted that the petitioner had a gross receipt of Rs.92.44 crores and was enti-
tled to accumulate a sum of Rs.32.85 crores under Section 11(2) of the
Income Tax Act, 1961 and spend it over a period of five years.
6. However, the request of the petitioner has been ignored with a
one line order without any proper reasons.
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7. That apart, the learned counsel for the petitioner submits that
the petitioner was alternatively entitled to restrict the accumulation to
Rs.13,86,70,000/- in terms of Section 11(1)(A) which has also been
ignored and therefore, on this count also the impugned order has to be
quashed, as there is a total non-application of mind.
8. The learned counsel for the petitioner further submits that entire
computation of income is based on rejection of the benefit under Section
11(2), which has resulted in a huge tax liability on the petitioner.
9. Finally, the learned counsel for the petitioner submits that the
accumulation, if any, can be determined only during the succeeding
Assessment year and not during the same Assessment year of the receipt
for the relevant financial year and therefore submits that on this count
also the impugned order is liable to be interfered with.
10. The learned counsel for the petitioner also drew attention to
E-assessment Scheme, 2019 which was notified on 12.09.2019. It is
submitted that the Scheme has been now codified in Section 144B of the
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Income Tax Act, 1961 by incorporating all the provisions in the said
Rules apart from few other conditions. It is submitted that there is no
scope for rendering safeguard under Section 142A of the Income Tax
Act otiose under Section 144B of the Income Tax Act. Hence, prays for
allowing this writ petition.
11. The learned Senior Standing Counsel appearing for the
respondents would submit that the Impugned Order does not warrant any
interference under Article 226 of the Constitution of India, as the
Petitioner has an alternate remedy by way of an appeal under Section
246A of the Income Tax Act, 1961.
12. That apart, the learned Senior Standing Counsel for the
respondents would submit that in view of the amendments to the
provisions of the Income Tax Act, 1961 particularly in view of Section
144B of the Income Tax Act, 1961, Section 144A has become
redundant.
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13. It is further submitted that the reassessment proceedings
commenced as early as on 22.09.2019 with the issuance of notice under
Section 143(2) of the Income Tax Act, 1961. However, the petitioner has
filed an application under Section 144A of the Income Tax Act, 1961
only on 13.09.2021 i.e., few days before the impugned Assessment Order
was passed on 28.09.2021.
14. It is therefore, submitted that the 1st respondent cannot be
found fault for passing orders on 28.09.2021.
15. The learned Senior Standing Counsel for the respondents
would submit further that in the light of the amendment to Income Tax
Act with incorporation Section 144B on 01.04.2021, the requirement for
a direction from the Joint Commissioner and the Assistant Commissioner
as the case may be under Section 144A has become redundant.
16. It is submitted that Section 144B is a complete in itself and
has a in-built mechanism for transparency in the assessment proceedings.
It is submitted that assessment is completed by an Assessing Unit which
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consists of Senior Income Tax Officer, Assistant Commissioner of
Income Tax, Deputy Commissioner of Income Tax and ITO, where an
assessment is made by the faceless unit.
17. It is therefore submitted that the same officer cannot be
expected to give a separate direction under Section 144A of the Income
Tax Act, 1961. In any event, it is submitted that the proceedings
commenced long before, however application was made only on
13.09.2021.
18. That apart, the learned counsel for the respondent would
submit that the assessing unit which is headed by Additional
Commissioner, Deputy Commissioner and Income Tax Officer and that
entire proceeding falls under Section 142B of the Income Tax Act, 1961
and therefore, on this count also there cannot be a direction to be issued
to the Joint Commissioner.
19. As far as the merits is concerned, the learned counsel for the
respondent submits that issue as to whether the petitioner is entitled to
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accumulate or not of the benefit of Section 11(2) is a subject matter
which the petitioner can take it on appeal before the CIT (Appeals) under
Section 246A of the Income Tax Act and thereafter before the Income
Tax Appellate Tribunal, if the petitioner is so aggrieved.
20. It is further submitted that Section 144A of the Income Tax
Act, 1961 grants discretionary powers to the Joint Commissioner as he
thinks fit for the guidance of the Assessing Officer to enable him to com-
plete the assessment.
21. It is further submitted that under Section 144B of the Income
Tax Act, 1961 prescribes the procedure as to how a faceless assessment
has to be completed. It is further submitted that the assessment had to be
completed with time bound manner in accordance with the limitation
prescribed under Section 153 of the Income Tax Act, 1961 and that
Section 153 of the Income Tax Act, 1961 does not calculate time
undertaken under Section 144A of the Income Tax Act, 1961 within its
core and therefore, there is no merits in the writ petition.
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22. It is submitted that there is no case made out for interference
with the impugned order and submits that writ petition is to be dismissed
as exemplary costs.
23. I have considered the arguments advanced by the learned
counsel for the petitioner and the learned counsel for the respondent.
24. In this case, a notice dated 22.9.2019 under section 143 (2) of
the Income Tax Act, 1961 was issued to the petitioner. This was in
response to the Return of Income filed by the petitioner on 01.10.2018. In
the aforesaid notice, it has been clearly stated that the petitioner may
submit its response with supporting documents (if any) on the issues
mentioned therein with the Assessing Officer electronically in
“e- Proceedings” facility account in e-filing website at its convenience on
or before 7.10.2019.
25. The said notice also encloses at note on “e-Proceeding”. This
was at the time when the petitioner was to be assessed by the
Jurisdictional Assessing Officer under the provisions of E-Assessment
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proceeding 2019 read with the provisions of the Income Tax Act, 1961 as
it stood then.
26. However, during the interregnum, the method of assessment
under the provisions of the Income Tax Act, 1961 underwent a change
with the incorporation of Section 144B into the Income Tax Act, 1961
with effect from 01.04.2021 vide Taxation And Other Laws (Relaxation
and Amendment of Certain Provisions) Act, 2020.
27. Now, Section 144B of the Income Tax Act, 1961 is a complete
code by itself. Section 144B of the Income Tax Act, 1961 as it stood dur-
ing the period in dispute reads as under:-
Section 144B. FACELESS ASSESSMENT :
(1) Notwithstanding anything to the contrary con-
tained in any other provisions of this Act, the assessment un-
der sub-section (3) of section 143 or under section 144, in the
cases referred to in sub-section (2), shall be made in a face-
less manner as per the following procedure, namely:-
(i) the National Faceless Assessment Centre shall
serve a notice on the assessee under sub-section (2) of section
143;
(ii) the assessee may, within fifteen days from the date
of receipt of notice referred to in clause (1), file his response
to the National Faceless Assessment Centre;
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(iii) where the assessee-
(a) has furnished his return of income under section
139 or in response to a notice issued under sub-section (1) of
section 142 or under sub-section (1) of section 148, and a no-
tice under sub- section (2) of section 143 has been issued by
the Assessing Officer or the prescribed income-tax authority,
as the case may be; or
(b) has not furnished his return of income in response
to a notice issued under sub-section (1) of section 142 by the
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 Assessing Officer,
the National Faceless Assessment Centre shall inti-
mate the assessee that assessment in his case shall be com-
pleted in accordance with the procedure laid down under this
section;
(iv) the National Faceless Assessment Centre shall as-
sign the case selected for the purposes of faceless assessment
under this section to a specific assessment unit in any one Re-
gional Faceless Assessment Centre through an automated al-
location system;
(v) where a case is assigned to the assessment unit, it
may make a request to the National Faceless Assessment Cen-
tre for-
(a) obtaining such further information, documents or
evidence from the assessee or any other person, as it may
specify;
(b) conducting of certain enquiry or verification by
verification 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 other person
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has been made by the assessment unit, the National Faceless
Assessment Centre shall issue appropriate notice or requisi-
tion to the assessee or any other person for obtaining the in-
formation, documents or evidence requisitioned by the assess-
ment 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 application in this regard, to the National
Faceless Assessment Centre;
(vii) where a request for conducting of certain enquiry
or verification by the verification unit has been made by the
assessment unit, the request verification by the National Face-
less Assessment Centre to a verification unit in any one Re-
gional Faceless Assessment Centre through an automated al-
location 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 Faceless Assess-
ment Centre to a technical unit in any one Regional Faceless
Assessment Centre through an automated allocation 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 Faceless Assessment Centre
shall serve upon such assessee a notice under section 144 giv-
ing him an opportunity to show-cause, on a date and time to
be specified in the notice, why the assessment in his case
should not be completed to the best of its judgment;
(xii) the assessee shall, within the time specified in the
notice referred to in clause (xi) or such time as may be extend-
ed on the basis of an application in this regard, file his re-
sponse to the National Faceless Assessment Centre;
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(xiii) where the assessee fails to file response to the no-
tice referred to in clause (xi) within the time specified therein
or within the extended time, if any, the National Faceless As-
sessment Centre shall intimate such failure to the assessment
unit;
(xiv) the assessment unit shall, after taking into ac-
count all the relevant material available on the record make in
writing, a draft assessment order or, in a case where intima-
tion referred to in clause (xiii) is received from the National
Faceless Assessment Centre, make in writing, a draft assess-
ment order to the best of its judgment, either accepting the in-
come or sum payable by, or sum refundable to, the assessee as
per his return or making variation to the said income or sum,
and send a copy of such order to the National Faceless As-
sessment Centre;
(xv) the assessment unit shall, while making draft as-
sessment order, provide details of the penalty proceedings to
be initiated therein, if any;
(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 de-
cide to-
(a) finalise the assessment, in case no variation preju-
dicial 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
(c) 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;
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(xvii) the review unit shall conduct review of the draft
assessment order referred to it by the National Faceless As-
sessment Centre whereupon it may decide to-
(a) concur with the draft assessment order and inti-
mate the National Faceless Assessment Centre about such
concurrence; or
(b) suggest such variation, as it may deem fit, in the
draft assessment order and send its suggestions to the Nation-
al Faceless Assessment Centre;
(xviii) the National Faceless Assessment Centre shall,
upon receiving concurrence of the review unit, follow the pro-
cedure 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 the assess-
ment unit which has made the draft assessment order, through
an automated allocation system;
(xx) the assessment unit shall, after considering the
variations suggested by the review unit, send the final draft
assessment order to the National Faceless Assessment Centre;
(xxi) the National Faceless Assessment Centre shall,
upon receiving final draft assessment order follow the proce-
dure laid 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 in sub-clause (b) of clause (xvi), furnish his response to
the National Faceless Assessment Centre on or before the date
and time specified in the notice or within the extended time, if
any;
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(xxii) the National Faceless Assessment Centre shall-
(a) where no response to the show-cause notice is re-
ceived as per clause (xxii)-
(A) in a case where the draft assessment order or the
final draft assessment order is in respect of an eligible as-
sessee and proposes to make any variation which is prejudi-
cial to the interest of said assessee, forward the draft assess-
ment order or final draft assessment order to such assessee;
or
(B) in any other case, finalise the assessment as per
the draft assessment order or the final draft assessment order
and serve a copy of such order and notice for initiating penal-
ty proceedings, if any, to the assessee, alongwith the demand
notice, specifying the sum payable by, or refund of any
amount due to, the assessee 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 ac-
count the response furnished by the assessee, make a revised
draft assessment order and send it to the National Faceless
Assessment 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 of the as-
sessee in comparison to the draft assessment order or the final
draft assessment order, and-
(A) in case the revised draft assessment order is in re-
spect of an eligible assessee and there is any variation preju-
dicial to the interest of the assessee proposed in draft assess-
ment order or the final draft assessment order, forward the
said revised draft assessment order to such assessee;
(B) in any other case, finalise the assessment as per
the revised draft assessment order and serve a copy of such
order and notice for initiating penalty proceedings, if any, to
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the assessee, alongwith the demand notice, specifying the sum
payable by, or refund of any amount due 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 the assessee
in comparison to the draft assessment order or the final draft
assessment order, provide an opportunity to the assessee, 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 in sub-clause (b) of clause(xxv);
(xxvii) where the draft assessment order or final draft
assessment order or revised draft assessment order is for-
warded to the eligible assessee as per item (A) of sub-clause
(a) of clause (xxiii) or item (A) of sub-clause (a) of clause
(xxv), such assessee shall, within the period specified in sub-
section (2) of section 144C, file his acceptance of the varia-
tions 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 eligible as-
sessee within the period specified in sub-section (2) of section
144C, finalise the assessment within the time allowed under
sub-section (4) of section 144C and serve a copy of such order
and notice for initiating penalty proceedings, if any, to the as-
sessee, alongwith the demand notice, specifying the sum
payable by, or refund of any amount due to, the assessee on
the basis of such assessment;
(xxix) where the eligible assessee files his objections
with the Dispute Resolution Panel, the National Faceless As-
sessment Centre shall upon receipt of the directions issued by
the Dispute Resolution Panel under sub-section (5) of section
144C, forward such directions to the con- cerned assessment
unit;
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(xxx) the assessment unit shall in conformity of the di-
rections issued by the Dispute Resolution Panel under sub-
section (5) of section 144C, prepare a draft assessment order
in accordance with sub-section (13) of section 144C and send
a copy of such order to the National Faceless Assessment
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 or-
der and notice for initiating penalty proceed- ings, if any, to
the assessee, alongwith the demand notice, specifying the sum
payable by, or refund of any amount due to, the assessee on
the basis of such assessment;
(xxxii) the National Faceless Assessment Centre shall,
after completion of assessment, transfer all the electronic
records of the case to the Assessing Officer having jurisdic-
tion over the said case for such action as may be required un-
der the Act.
(2) The faceless assessment under sub-section (1) shall
be made in respect of such territorial area, or persons or class
of persons, or incomes or class of incomes, or cases or class
of cases, as may be specified by the Board.
(3) The Board may, for the purposes of faceless assess-
ment, set up the following Centres and units and specify their
respective jurisdiction, namely:-
(i) a National Faceless Assessment Centre to facilitate
the conduct of faceless assessment proceedings in a cen-
tralised manner, which shall be vested with the jurisdiction to
make faceless assessment;
(ii) Regional Faceless Assessment Centres, as it may
deem necessary, to facilitate the conduct of faceless assess-
ment proceedings in the cadre controlling region of a Princi-
pal Chief Commissioner, which shall be vested with the juris-
diction to make faceless assessment;
(iii) assessment units, as it may deem necessary to fa-
cilitate the conduct of faceless assessment, to perform the
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function of making assessment, which includes identification
of points or issues material for the determination of any lia-
bility (including refund) under the t Act, seek- ing information
or clarification on points or issues so identified, analysis of
the material furnished by the assessee or any other person,
and such other functions as may be required for the purposes
of making faceless assessment;
(iv) verification units, as it may deem necessary to fa-
cilitate the conduct of faceless assessment, to perform the
function of verification, which includes enquiry, cross verifi-
cation, examination of books of account, examination of wit-
nesses and recording of statements, and such other functions
as may be required for the purposes of verification;
(v) technical units, as it may deem necessary to facili-
tate the conduct of faceless assessment, to perform the func-
tion of providing technical assistance which includes any as-
sistance or advice on legal, account- ing, forensic, informa-
tion technology, valuation, transfer pricing, data analytics,
management or any other technical matter which may be re-
quired in a particular case or a class of cases, under this sec-
tion; and
(vi) review units, as it may deem necessary to facilitate
the conduct of faceless assessment, to perform the function of
review of the draft assessment order, which includes checking
whether the relevant and material evidence has been brought
on record, whether the relevant points of fact and law have
been duly incorporated in the draft order, whether the issues
on which addition or disallowance should be made have been
discussed in the draft order, whether the applicable judicial
decisions have been considered and dealt with in the draft or-
der, checking for arithmetical correctness of variations pro-
posed, if any, and such other functions as may be required for
the purposes of review.
(4) The assessment unit, verification unit, technical
unit and the review unit shall have the following authorities,
namely:-
(a) Additional Commissioner or Additional Director or
Joint Commissioner or Joint Director, as the case may be;
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(b) Deputy Commissioner or Deputy Director or Assis-
tant Commissioner or Assistant Director, or Income-tax Offi-
cer, as the case may be;
(c) such other income-tax authority, ministerial staff,
executive or con- sultant, as considered necessary by the
Board.
(5) All communication among the assessment unit, re-
view unit, verification unit or technical unit or with the as-
sessee or any other person with respect to the information or
documents or evidence or any other details, as may be neces-
sary for the purposes of making a faceless assessment shall be
through the National Faceless Assessment Centre;
(6) All communications between the National Faceless
Assessment Centre and the assessee, or his authorised repre-
sentative, or any other person shall be exchanged exclusively
by electronic mode; and all internal communications between
the National Faceless Assessment Centre, Regional Faceless
Assessment Centres and various units shall be exchanged ex-
clusively by electronic mode:
Provided that the provisions of this sub-section shall
not apply to the enquiry or verification conducted by the veri-
fication unit in the circumstances referred t 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 affix-
ing its digital signature;
(b) assessee or any other person, by affixing his digital
signature if he is required to furnish his return of income un-
der digital signature, and in any other case, by affixing his
digital signature or under electronic verification code in the
prescribed manner;
(ii) every notice or order or any other electronic com-
munication shall be (delivered to the addressee, being the as-
sessee, by way of-
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(a) placing an authenticated copy thereof in the as-
sessee's registered account; or
(b) sending an authenticated copy thereof to the regis-
tered email address of the assessee or his authorised represen-
tative; 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 com-
munication shall be delivered to the addressee, being any oth-
er person, by sending an authenticated copy thereof to the
registered email address of such person, followed by a real
time alert;
(iv) the assessee shall file his response to any notice or
order or any other or electronic communication, through his
registered account, and once an acknowledgement is sent by
the National Faceless Assessment Centre containing the hash
result generated upon successful submission of response, the
response shall be deemed to be authenticated;
(v) the time and place of dispatch and receipt of elec-
tronic record shall be determined in accordance with the pro-
visions of section 13 of the Information Technology Act, 2000
(21 of 2000);
(vi) a person shall not be required to appear either
personally or through authorised representative in connection
with any proceedings before the income-tax authority at the
National Faceless Assessment Centre or Regional Faceless
Assessment Centre or any unit set up under this sub-section;
(vii) in a case where a variation is proposed in the
draft assessment order or final draft assessment order or re-
vised draft assessment order, and an opportunity is provided
to the assessee by serving a notice calling upon him to show
cause as to why the assessment should not be completed as
per the such draft or final draft or revised draft assess- ment
order, the assessee or his authorised representative, as the
case may be, may request for personal hearing so as to make
his oral submissions or present his case before the income-tax
authority in any unit.
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(viii) the Chief Commissioner or the Director General,
in charge of the Regional Faceless Assessment Centre, under
which the concerned unit is set up, may approve the request
for personal hearing referred to in clause (vii) if he is of the
opinion that the request is covered by the circumstances re-
ferred to in sub-clause (h) of clause (xii);
(ix) where the request for personal hearing has been
approved by the Chief Commissioner or the Director General,
in charge of the Regional Faceless Assessment Centre, such
hearing shall be conducted exclu- sively through video confer-
encing or video telephony, including use of any telecommuni-
cation application software which supports video conferenc-
ing or video telephony, in accordance with the procedure laid
down by the Board;
(x) subject to the proviso to sub-section (6), any exami-
nation or recording of the statement of the assessee or any
other person (other than statement recorded in the course of
survey under section 133A of the Act) shall be conducted by
an income-tax authority in any unit, exclusively through video
conferencing or video telephony, including use of any
telecommunication application software which supports video
conferencing or video telephony in accordance with the proce-
dure laid down by the Board;
(xi) the Board shall establish suitable facilities for
video conferencing or video telephony including telecommuni-
cation application software which supports video conferenc-
ing or video telephony at such locations as may be necessary,
so as to ensure that the assessee, or his authorised representa-
tive, or any other person is not denied the benefit of faceless
assessment merely on the consideration that such assessee or
his authorised representative, or any other person does not
have access to video conferencing or video telephony at his
end;
(xii) the Principal Chief Commissioner or the Princi-
pal Director General, in charge of the National Faceless As-
sessment 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, Re-
gional Faceless Assessment Centres and the unit set up, in an
automated and mechanised environment, including format,
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mode, procedure and processes in respect of the following,
namely:-
(a) service of the notice, order or any other communi-
cation;
(b) receipt of any information or documents from the
person in response to the notice, order or any other communi-
cation;
(c) issue of acknowledgment of the response furnished
by the person;
(d) provision of "e-proceeding" facility including login
account facility, tracking status of assessment, display of rele-
vant details, and facility of download;
(e) accessing, verification and authentication of infor-
mation and response including documents submitted during
the assessment proceedings;
(f) receipt, storage and retrieval of information or doc-
uments in a centralised manner;
(g) circumstances in which proviso to sub-section (6)
shall apply; (h) circumstances in which personal hearing re-
ferred to clause (viii) shall be approved;
(h) 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
the Principal Director General in charge of National Faceless
Assessment Centre may at any stage of the assessment, if con-
sidered necessary, transfer the case to the Assessing Officer
having jurisdiction over such case, with the prior approval 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 referred to in
sub-section (2) [other than the cases transferred under sub-
section (8)], on or after the 1st day of April, 2021, shall be
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nonest if such assessment is not made in accordance with the
procedure laid down under this section.
[(10) Notwithstanding anything contained in this sec-
tion, the function of verification unit under this section may
also be performed by a verification unit located in any other
faceless center set up under the provisions of this Act or under
any scheme notified under the provisions of this Act; and the
request for verification may also be assigned by the National
Faceless Assessment Centre to such verification unit.]
Explanation - In this section, unless the context other-
wise requires-
(a) "addressee" shall have the same meaning as as-
signed to it in clause (b) of sub-section (1) of section 2 69a of
the Information Technology Act, 2000 (21 of 2000);
(b) "authorised representative" shall have the same
meaning as assigned to it in sub-section (2) of section 288;
(c) "automated allocation system" means an algorithm
for randomised allocation of cases, by using suitable techno-
logical tools, including artificial intelligence and machine
learning, with a view to optimise the use of resources;
(d) automated examination tool" means an algorithm
for standardised examination of draft orders, by using suit-
able technological tools, including artificial intelligence and
machine learning, with a view to reduce the scope of discre-
tion;
(e) “computer resource" shall have the same meaning
as assigned to it in clause (k) of sub-section (1) of section 2 69b
of the Information Technology Act, 2000 (21 of 2000);
(f) "computer system" shall have the same meaning as
assigned to it in clause (1) of sub-section (1) of section 2 69b of
the Information Technology Act, 2000 (21 of 2000);
(g) “computer resource of assessee" shall include as-
sessee's registered account in designated portal of the In-
come-tax Department, the Mobile App linked to the registered
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mobile number of the assessee, or the registered email address
of the assessee with his email service provider;
(h) "digital signature" shall have the same meaning as
assigned to it in clause (p) of sub-section (1) of section 269%
of the Information Technology Act, 2000 (21 of 2000);
(i) "designated portal" means the web portal designat-
ed as such by the Principal Chief Commissioner or the Princi-
pal Director General, in charge of the National Faceless As-
sessment 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 pro-
ceedings conducted electronically in 'e-Proceeding' facility
through assessee's registered account in designated portal;
(1) "electronic record" shall have the same meaning as
assigned to it in clause (t) of sub-section (1) of section 269b of
the Information Technology Act, 2000 (21 of 2000);
(m) "eligible assessee" shall have the same meaning as
assigned to in clause (b) of sub-section (15) of section 144C;
(n) "email" or "electronic mail" and "electronic mail
message" means a message or information created or trans-
mitted or received on a computer, computer system, computer
resource or communication device including attachments in
text, image, audio, video and any other electronic record,
which may be transmitted with the message;
(0) "hash function" and "hash result" shall have the
same meaning as assigned to them in the Explanation to sub-
section (2) of section 369h of the Information Technology Act,
2000 (21 of 2000);
(p) "Mobile app" shall mean the application software
of the Income-tax Department developed for mobile devices
which is downloaded and installed on the registered mobile
number of the assessee;
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(q) "originator" shall have the same meaning as as-
signed to it in clause (za) of sub-section (1) of section 2696 of
the Information Technology Act, 2000 (21 of 2000);
(r) 'real time alert" means any communication sent to
the assessee, by way of Short Messaging Service on his regis-
tered mobile number, or by way of update on his Mobile App,
or by way of an email at his registered email address, so as to
alert him regarding delivery of an electronic communication;
(s) "registered account of the assessee means the elec-
tronic filing account registered by the assessee in designated
portal;
(t) "registered e-mail address" means the e-mail ad-
dress at which an electronic communication may be delivered
or transmitted to the addressee, including-
(i) the e-mail address available in the electronic filing
account of the addressee registered in designated portal; 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 Permanent Ac-
count Number database relating to the addressee; or
(iv) in the case of addressee being an individual who
possesses the Aadhaar number, the e-mail address of ad-
dressee available in the database of Unique Identification Au-
thority of India; or
(v) in the case of addressee being a company, the e-
mail address of the company as available on the official web-
site of Ministry of Corporate Affairs; or
(vi) any e-mail address made available by the ad-
dressee to the income- tax authority or any person authorised
by such authority;
(u) "registered mobile number" of the assessee means
the mobile number of the assessee, or his authorised represen-
tative, appearing in the user profile of the electronic filing ac-
count registered by the assessee in designated portal;
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(v) “video conferencing or video telephony" means the
technological solutions for the reception and transmission of
audio-video signals by users at different locations, for com-
munication between people in real-time.
28. Section 144B of the Income Tax Act, 1961 replaces the “e –
Assessment Scheme, 2019” that was earlier introduced on 12.09.2019.
29. The procedure under Section 144B of the Income Tax Act,
1961 makes it clear that there are adequate safeguards during assessment.
Clause (iii) Sub- Section (1) Section 144B of the Income Tax Act, 1961
mandates that the assessment will be completed in accordance with the
procedure laid down under section 144B of the Income Tax Act, 1961.
30. Clause (iv) to Sub-Section 144B of the Income Tax Act, 1961
also makes it clear that the National Faceless Assessment Centre shall
assign the case selected for the purpose of Faceless Assessment to a
Specific Assessment Unit (SAU) in any one of the Regional Assessment
Centre (RAC) through an automated allocation system. The Assessing
Unit under Section 144B consist of Senior Officials of the Income Tax
Act, 1961.
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31. As per sub- section (4) of the Income Tax Act, 1961 the As-
sessment Unit, Technical Unit and the Review Unit shall have the follow-
ing authorities namely:-
(a) Additional Commissioner or Additional Director or
Joint Commissioner or Joint Director, as the case may be;
(b) Deputy Commissioner or Deputy Director or Assis-
tant Commissioner or Assistant Director, or Income-tax Offi-
cer, as the case may be;
(c) such other income-tax authority, ministerial staff,
executive or con- sultant, as considered necessary by the
Board.
32. Therefore, the case of the petitioner that the impugned
Assessment Order dated 28.9.2021 has been passed without awaiting for
order under Section 144A of the Income Tax Act, 1961 of the Joint Com-
missioner in response to be application dated 13.09.2021 filed by the pe-
titioner under the aforesaid provision cannot be countenanced.
33. That apart, the Joint Commissioner of Income tax is a func-
tionary of the Assessment unit. Therefore, the jurisdictional Joint Com-
missioner cannot issue any directions to the Assessment Unit contemplat-
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ed for completing the assessment under Section 144B of the Income Tax
Act, 1961.
34. With the incorporation of Section 144B of the Income Tax Act,
1961, the role of the Jurisdictional Joint Commissioner of Income Tax
under Section 144A of the Income Tax Act, 1961 has become redundant
to the extent where the assessment under section 144B of the Income Tax
Act, 1961 is contemplated.
35. Section 144A of the Income Tax Act, 1961 will apply under
limited circumstances, where the assessment continues with the
Jurisdictional Assessing Officer.
36. Section 144A of the Income Tax Act, 1961 is reproduced be-
low:-
“Section 144A. Joint Commissioner may, on his own motion
or on a reference being made to him by the Assessing Officer or on
the application of an assessee, call for and examine the record of
any proceeding in which an assessment is pending and, if he consid-
ers that, having regard to the nature of the case or the amount in-
volved or for any other reason, it is necessary or expedient so to do,
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he may issue such directions as he thinks fit for the guidance of the
Assessing Officer to enable him to complete the assessment and
such directions shall be binding on the Assessing Officer.”
37. That apart, under the provisions of Section 144B of the In-
come Tax Act, 1961 with effect from 01.04.2021 which was in force dur-
ing the period in dispute, the assessment is faceless. There is interplay
only between an assessee and the National Faceless Assessment Centre
and the Jurisdictional Joint Commissioner will have no role to play.
38. The National Faceless Assessment Centre has to assign case, to
a specific Assessment Unit (SAU) in any Regional Faceless Assessment
Centre (RFAC) through an Automated Allocation System. The specific
Assessment Unit can request the National Faceless Assessment Centre for
obtaining such information, documents or evidence from the assessee or
any other person or for conducting an enquiry or Verification Unit or seek
technical assistance from the Technical Units.
39. The Assessment Unit makes a draft assessment order which is
again to be examined by the National Faceless Assessment Centre in
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accordance with 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 preju-
dicial 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
(c) 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;
40. The draft assessment is to be also reviewed by a Review Unit
and it may decide to -
(a) concur with the draft assessment order and
intimate the National Faceless Assessment Centre about such
concurrence; or
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(b) suggest such variation, as it may deem fit, in the
draft assessment order and send its suggestions to the
National Faceless Assessment Centre;
41. After receipt of concurrence from the Review Unit on the draft
assessment order, the National Faceless Centre has to once again follow
the procedure in clause 16 sub-Clause A or B or Clause 16 of Section
144B(1). It is therefore, the National Faceless Assessment Centre
assigned the case to an Assessment Unit or other than an Assessment Unit
which has made a draft assessment order through an Automated
Allocation System.
42. The Assessment Unit too, thereafter considers the variation
suggested by the Review Unit, final draft assessment order from the
National Faceless Assessment Centre. Where again the procedure under
Clause (A) or (B) of Clause XVI to Section 144B of the Income Tax Act,
1961 has to be followed. Thus there is no scope for interplay between
Section 144A of the Income Tax Act, 1961 and where assessment is
made under Section 144B of the Income Tax Act, 1961.
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43. In the light of the above discussion, I find no merits in the
present writ petition. Hence, this writ petition is liable to be dismissed.
44. Accordingly, this Writ Petition is dismissed. However, liberty
is given to the petitioner to file a Statutory Appeal before the Appellate
Commissioner, within a period of 30 days from the date of receipt of a
copy of this order. On filing of such Appeal by the petitioner, the
Appellate Commissioner shall dispose of the same on merits, without
referring the limitation for filing the Appeal. No costs. Consequently,
connected miscellaneous petitions are closed.
03.01.2025
rgm/jas/nst/mrr
Index : Yes/No
Neutral Citations : Yes/No
Speaking Order/Non Speaking Order
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To:
1.Additional/Joint/Deputy/Assistant
Commissioner of Income Tax/
Income Tax Officer,
National Faceless Assessment Centre,
Delhi.
2.The Joint/Additional Commissioner of Income Tax
National Faceless Assessment Centre,
Delhi.
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C.SARAVANAN, J.
rgm/jas/nst/mrr
Pre-Delivery Order
03.01.2025
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