UMKAL HEALTHCARE PVT LTD v. NATIONAL FACELESS ASSESSMENT CENTRE & ANR.

1. The petition has been heard by way of video conferencing.: (Oral)

2. Present writ petition has been filed challenging the Assessment Order dated 09th

3. Learned counsel for the Petitioner states that the impugned order dated 09 June 2021 passed by the Respondents under Section 143(3) read with Section 144B of the Act for Assessment Year [AY] 2018-19 as well as notice of demand issued under Section 156 of the Act and all proceedings initiated pursuant thereto. th June 2021 passed under Section 143(3) read with Section 144B of 2021:DHC:2234-DB the Act, for the assessment year 2018-19 is without jurisdiction, arbitrary, illegal and deserves to be quashed. He states that the impugned order dated 09th

4. He points out that as against the draft assessment order dated 08 June 2021 was passed without affording personal hearing, even when, specifically requested by the Petitioner and hence, the impugned order is violative of the principles of natural justice and Section 144B of the Act. th He contends that the Revised draft order under clause (xxiv) to section 144B of the Act was not prepared. He emphasises that the final assessment order is virtually a copy of draft assessment order dated 08 April 2021, the Petitioner had filed a response, therefore in terms of clause (xxiii)(b) of section 144B, the response was required to be sent to the assessment unit and the assessment unit was to pass a revised draft order. th

5. Issue notice. Mr. Sunil Agarwal, learned senior standing counsel accepts notice on behalf of respondents. He submits that the expression used in clause (vii) of sub-Section (7) of Section 144B of the Act is ‘may’ and not ‘shall’ and therefore, there is no vested right in the petitioner to claim a personal hearing. April 2021.

6. Having heard learned counsel for the parties, this Court is of the view that Section 144B (7) provides for an opportunity of personal hearing, if requested, by the assessee. The relevant portions of Section 144B (7) and Section 144B (9) are reproduced hereinbelow: - “144B. Faceless assessment – (1) xxxx xxxx xxxx xxxx (7) For the purposes of faceless assessment— xxxx xxxx xxxx xxxx

(vii) in a case where a variation is proposed in the draft assessment order or final draft assessment order or revised 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 assessment 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;

(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 referred to in sub-clause (h) of clause (xii);

(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: — (h) circumstances in which personal hearing referred to clause

(viii) shall be approved;….

(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 subsection (2) [other than the cases transferred under sub-section (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.”

7. The learned predecessor Division Bench in Sanjay Aggarwal Vs. National Faceless Assessment Centre, Delhi, W.P.(C) 5741/2021, dated 02nd “11.4. A careful perusal of clause (vii) of Section 144B (7) would show that liberty has been given to the assessee, if his/her income is varied, to seek a personal hearing in the matter. Therefore, the usage of the word ‘may’, to our minds, cannot absolve the respondent/revenue from the obligation cast upon it, to consider the request made for grant of personal hearing. Besides this, under sub-clause (h) of Section 144B (7)(xii) read with Section 144B(7) (viii), the respondent/revenue has been given the power to frame standards, procedures and processes for approving the request made for according personal hearing to an assessee who makes a request qua the same.

11.5. In several matters, we have asked the counsels for the revenue as to, whether any standards, procedures and processes have been framed for dealing with such requests. The response, which we have got from the standing counsels including Mr. Chandra, is that, to the best of their knowledge, no such standards, procedures as also processes have been framed, as yet. June, 2021, while interpreting the aforesaid Section has held as under:-

8. Since in the present case no hearing had been granted before passing the impugned assessment order, there is a violation of principles of natural justice as well as mandatory procedure prescribed in “Faceless Assessment Conclusion: