Patna High Court
Awadh Kishor Singh vs National Faceless Assessment Centre on 10 February, 2025
Author: Rajeev Ranjan Prasad
Bench: Rajeev Ranjan Prasad
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.13614 of 2024
======================================================
Awadh Kishor Singh Son of Shri Binda Singh resident of vill - Repura
Rampurballi, Repura Urf Rampur Bishunath, P.O. Jaintpur Estate, P.S.
Saraiyan, Muzaffarpur, Bihar - 843123.
... ... Petitioner/s
Versus
1. National Faceless Assessment Centre 2nd floor, E-Ramp, Jawaharlal Nehru
Stadium, New Delhi- 110003.
2. Principal Commissioner of Income Tax- 1 having its Office at Bir Chand
Patel Path, Central Revenue Building, Patna 800001.
3. Income Tax Officer, Ward 1 (1), Muzaffarpur.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr.D.V.Pathy, Sr. Advocate
Ms. Shivani Dewalla, Advocate
Mr. Sadashiv Tiwary, Advocate
Mr. Hiresh Karan, Advocate
Ms. Prachi Pallavi, Advocate
For the Respondent/s : Ms. Archana Sinha @ Archana Sahi, Sr. Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD
and
HONOURABLE MR. JUSTICE RAMESH CHAND MALVIYA
CAV JUDGMENT
(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD)
Date : 10-02-2025
This writ application has been preferred seeking the
following reliefs:-
"(i) The order dated 03.03.2022 (as contained in
Annexure-P5 series) passed by the respondent no.1
under Section 147 read with Section 144B of the Act
for the Assessment Year 2014-15 (hereinafter called the
Act) without compliance of the statutory provisions
contained in Section 144B of the Act and also without
grant of adequate opportunity of being heard be set
aside and quashed.
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(ii) For granting and other relief(s) to which the
petitioner is otherwise found entitled to."
2. Petitioner is an individual engaged in the business of
trade of fish on a fixed commission basis. He is entrusted with the
unloading and sale of fish on a truck load basis on a fixed
commission of Rs.1500 per truck. The fishes are imported from
the State of Andhra Pradesh and other coastal States outside the
State of Bihar by the wholesale dealers. The petitioner deposits the
sale proceeds in his bank account and remits the same to the
wholesale dealers mostly in the State of Andhra Pradesh and other
coastal areas through bank transfers.
3. It is the case of the petitioner that he filed a return for
the assessment year 2014-15 with the help of local advocate
estimating his income of commission on sale of fish on a
commission basis at Rs.2,35,000/-. It is his plea that he is an
illiterate person and has practically no understanding of the
website of the Income Tax Department. He was not able to know
all the proceedings in progress leading to an ex-parte order of
assessment. He came to know about this fact only after the bank
intimated him in July last week about the notice of attachment
under Section 226(3) of the Act to remit the disputed demand of
tax. The petitioner claims that he had discontinued his business
way back in December, 2023.
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Submissions on behalf of the petitioner
4. Mr. D.V. Pathy, learned senior counsel for the
petitioner submits that the respondent no.3 issued a notice under
Section 148 of the Income Tax Act, 1961 (hereinafter referred to as
the 'Act of 1961') stating therein that he had reason to believe that
income has escaped assessment. A copy of the notice dated
30.03.2021
for the assessment year 2014-15 has been brought on
record as Annexure-P1.
5. The respondent no.3 issued a notice under Section
142(1) of the Act directing the petitioner to explain the source of
income and furnished bank statement for the financial year 2013-
14. Thereafter the notices were issued by the respondent no.1-
National Faceless Assessment Centre (in short ‘NFAC’) directing
the petitioner to furnish details as regards business, audit reports
and other accounting details as per the annexure to the notice.
6. Learned senior counsel submits that by yet another
notice dated 20.01.2022 respondent no.1 proposed variation to the
returned income. The notice alleged that deposit of a sum of
Rs.1,76,33,412/- in the ICICI bank account of the petitioner. The
notice proposed to add the whole of the deposits as undisclosed
income.
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7. Learned senior counsel for the petitioner submits that
the notices were displayed on the portal of the department. The
petitioner being illiterate person could not ever know of the ex-
parte assessment order going against him initiated by the
jurisdictional officer or the Faceless Assessment Centre. The
respondent no.1 passed an ex-parte order of assessment dated
03.03.2022 for the assessment year 2014-15 under Section 144 and
144B of the Act and accordingly issued a notice of demand.
8. The core contention of learned senior counsel for the
petitioner is that the statutory scheme of Section 144B of the Act
of 1961 provides for the manner in which an assessment under
Section 143(3) and Section 144 of the Act of 1961 is to be done. It
is his submission that there are several sub-clauses under Section
144B, even in case of failure of an assessee to comply with the
notice the ‘NFAC’ must examine the draft assessment order in
accordance with the risk management strategy specified by the
Board including by way of an automatic examination tool and then
again provide an opportunity to the assessee in case any variation
prejudicial to the interest, 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 review unit in
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any one Regional Faceless Assessment Centre through an
automated allocation system for conducting review of such order.
9. It is his submission that the respondents made an ex-
parte assessment without due compliance with the specified
procedure enumerated in Section 144B of the Act of 1961. In his
submissions, the impugned order is without jurisdiction.
10. Learned senior counsel for the petitioner has heavily
relied upon the judgment of the Hon’ble Supreme Court in the
case of Calcutta Discount Co. Ltd. Vs. Income Tax Officer,
Companies District-1, Calcutta and Another reported in (1961)
41 ITR 191. In the said case, the Hon’ble Supreme Court has held
that if the conditions precedent for issue of a notice under Section
34 do not exist, the jurisdiction of the High Court to issue high
prerogative writs under Article 226 of the Constitution to prohibit
action under the notice may be exercised.
11. Relying upon the judgment in the case of Kranti
Associates Private Limited & Another Vs. Masood Ahmed
Khan & Others reported in (2010) 9 SCC 496, learned senior
counsel submits that the necessity of giving reasons by a body or
authority in support of its decision has been a settled proposition
and it has been held that the distinction between the administrative
orders and quasi-judicial orders got blurred and thinned out and
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virtually reached a vanishing point in the judgment of the Hon’ble
Supreme Court in the case of A.K. Karaipak Vs. Union of India
reported in (1969) 2 SCC 262.
12. The learned senior counsel has relied upon the
judgment of the Hon’ble Delhi High Court in the case of Capital
Broadways Pvt. Ltd. Vs. Income Tax Officer Ward 5(3) Delhi
& Another in W.P.© No.4303 of 2017 reported in 2024
TAXSCAN (HC) 2100. It is submitted that in this case the
Hon’ble Delhi High Court has relied upon Pioneer Town Planners
Pvt. Ltd. and other judgments. In the case of Principal
Commissioner of Income Tax-6 Vs. Meenakshi Overseas Pvt.
Ltd. ITA 651/2015, it has been held that by writing words “Yes, I
am satisfied” the mandate of Section 151(1) of the Act as far as
approval of Additional CIT was concerned, stood satisfied but this
satisfaction arrived at by the Hon’ble Delhi High Court was in the
light of the fact that the Additional CIT addressed a letter to the
ITO in which he wrote that in view of the reasons recorded under
Section 148(2) of the IT Act, approval for issue of notice under
Section 148 is hereby given. In the case of Capital Broadways
Pvt. Ltd. (supra), the Hon’ble Delhi High Court held that by mere
repeating the words of the statute, mere rubber stamping of the
letter seeking sanction or using similar words like “Yes, I am
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satisfied” will not satisfy the requirement of law. It is his
submission that in the present case the procedures as prescribed
under Section 151(1) for issuance of notice under Section 148 of
the Act of 1961 has not been complied with.
Submissions on behalf of the respondents
13. The writ application has been contested by the
respondents. It is stated that as per report available in insight portal
which was uploaded by the Assistant Director of Income Tax
(Investigation) Muzaffarpur on 24.04.2020 the assessee had
deposited cash of Rs.1,80,48,412/- in two bank accounts, namely,
Rs.55,81,967/- in A/c No.133001502345 and Rs.1,24,66,445/- in
A/c No.133005500409 maintained with ICICI bank. However, the
assessee had shown gross receipt of Rs.38,29,506/- only in the
ITR, therefore, the balance cash deposits of Rs.1,42,18,906/-
remained unexplained.
14. It is stated that since cash of Rs.1,42,18,906/-
remained as unexplained money under Section 69A of the Act of
1961, it was required to be added back to the total income.
Accordingly, after approval from the Principal Commissioner of
Income Tax-1, Patna, notice under Section 148 of the Act of 1961
was issued on 30.03.2021. It is stated that a notice under Section
142(1) of the Act of 1961 was issued on 04.08.2021 through JAO
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but the assessee did not make any compliance. Later, on
11.11.2021, the case was transferred to the Faceless Assessment
Unit for completion of assessment proceeding as per provisions of
Section 144B of the Act of 1961. Thereafter, notice under Section
142(1) of the Act of 1961 was issued to the assessee through
‘NAFC’ on 15.11.2021 but the assessee did not make any
compliance. Again a notice under Section 142(1) of the Act of
1961 was issued on 06.12.2021 but the assessee failed to make any
compliance. Since the assessee was not making compliance to the
statutory notices, a reference was made to verification unit for
serving the notice through speed post on 24.12.2021 in accordance
with the procedure laid down under Section 144B of the Act of
1961. Still the assessee failed to make any compliance. Therefore,
a show cause notice was issued to the assessee on 20.01.2022
requiring him to explain why the cash deposits in his bank
accounts may not be treated as unexplained money. The assessee
still remained non-responsive. Accordingly, a draft order
proposing variation to this effect was sent for approval on
24.02.2022 and post approval, assessment order was passed
making addition of Rs.1,76,33,412/- to the total income as
explained money under Section 69A of the Act of 1961.
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15. Ms. Archana Shahi, learned senior counsel for the
Department of Income Tax has submitted that the assessee was
provided with ample opportunities during the course of assessment
proceedings to place his explanation but every time he failed to
submit a response. In these circumstances, assessment in the case
was completed under Section 147 read with Section 144B of the
Act of 1961 for the assessment year 2014-15 on 03.03.2022.
16. Learned senior counsel has placed before this Court
a copy of the order dated 12.09.2024 passed by this Court in the
case of this very petitioner (CWJC No.3759 of 2020). It is
submitted that the said writ application was filed challenging an
identical order with respect to the assessment year 2013-14. The
petitioner withdrew the said writ application with liberty to seek
remedy before the appellate forum. This Court permitted the
petitioner to withdraw the writ petition with liberty subject to just
exceptions including that of limitation also. Therefore, in present
case also the petitioner if so advised may seek the alternative
remedy of appeal.
17. It is submitted that the impugned order of
assessment has been passed after due compliances with the
statutory provisions. In order to satisfy this Court, learned counsel
has placed before this Court the following three judgments:-
Patna High Court CWJC No.13614 of 2024 dt.10-02-2025
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Ltd. vs. Income Tax Officer & Ors.
(2) CWJC No.3759 of 2020 (Venky Steels Pvt. Ltd.
Vs. Commissioner of Income Tax-II.
(3) CWJC No.3207 of 2022 (Abha Saraf Vs. Union of
India & Ors.).
18. It is submitted that in the case of GKN Driveshafts
(India) Ltd. (supra), the Hon’ble Supreme Court refused to
interfere with the order under challenge and clarified that when a
notice under Section 148 of the Act of 1961 is issued, the proper
course of action for the noticee is to file return and if he so desires,
to seek reasons for issuing notices. The AO is bound to furnish
reasons within a reasonable time. On receipt of reasons, the
noticee is entitled to file objections to issuance of notice and the
AO is bound to dispose of the same by passing a speaking order.
19. In the case of Venky Steels Pvt. Ltd. (supra), the
learned coordinate bench of this Court considered the
Commissioner’s approval and rejected the contention of the
petitioner that the approval is mechanical and does not disclose
any reason. The learned coordinate Bench has also gone through
the judgments of the Hon’ble Delhi High Court in Principal
Commissioner of Income Tax Vs. N.C. Cables Ltd.; (2017) 391
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ITR 11 (Del) and Principal Commissioner of Income Tax vs.
Pioneer Town Planners Pvt. Ltd.; (2024) 465 ITR 356 (Del).
The learned coordinate Bench further went through the judgment
of the Hon’ble Supreme Court in the case of Chhugamal Rajpal
Vs. S.P. Chaliha and Other; (1971) 79 ITR 603 (SC) wherein
the income tax officer had not come to a prima-facie conclusion
that the loan transactions to which he referred were not genuine
transactions and he appeared to have entertained only a vague
feeling that they might be bogus transactions which conclusion did
not fulfill the requirement of Section 151(2). In the said case, it
was held that the assessing officer has to give reasons for issuing a
notice under Section 148 and there should be some prima facie
grounds before him, for taking such action. The Hon’ble Division
Bench distinguished the case in Venky Steels Pvt. Ltd. (supra)
and refused to interfere with the notice issued under Section 148
on the grounds raised in the writ petition.
20. Learned senior counsel has further relied upon the
case of Abha Saraf (supra) to submit that in the said case once
again the learned coordinate Bench of this Court refused to
interfere with the order rejecting the appeal of the petitioner on the
ground of limitation.
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Consideration
21. We have considered the submissions of learned
senior counsel for the parties and have gone through the materials
available on the record. At this stage, we think it proper to take a
glance over the relevant provisions of the Act of 1961. Section 147
is attracted if any income chargeable to tax, in the case of an
assessee has escaped assessment for any assessment year.
According to this provision, the Assessing Officer subject to the
provisions of sections 148 to 153, assess or reassess such income
or recompute the loss or the depreciation allowance or any other
allowance or deduction for such assessment year. Section 148
provides for issuance of notice where income has escaped
assessment. According to this provision, before before making the
assessment, reassessment or recomputation under section 147, the
Assessing Officer shall , subject to the provisions of section 148A,
issue a notice to the assessee, along with a copy of the order
passed under sub-section (3) of Section 148A, requiring him to
furnish, within such period as may be specificed in the notice, not
excedding three months from the end of the month in which such
notice is issued, a return of his income or income of any other
person in respect of whom, he is assessable under this Act during
the previous year corresponding to the relevant assessment year.
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Proviso to Section 148 states that no notice under this section
shall be issued unless there is information with the Assessing
Officer which suggests that the income chargeable to tax has
escaped assessment in the case of the assessee for the relevant
assessment assessment year. Section 148A lays down procedures
before issuance of notice under Section 148.
22. According to Section 151, the specific authority for
the purposes of sections 148 and 148A shall be the Additional
Commissioner or the Additional Director or the Joint
Commissioner or the Joint Director, as the case may be. Section
151A says that the Central Government may make a scheme, by
notification in the Official Gazette, for the purposes of assessment,
reassessment or re-computation under section 147 or issuance of
notice under section 148 or conducting of enquiries or issuance of
show-cause notice or passing of order under section 148A or
sanction for issue of such notice under section 151, so as to impart
greater efficiency, transparency and accountability by–
(a) eliminating the interface between the income-tax
authority and the assessee or any other person to the extent
technologically feasible;
(b) optimising utilisation of the resources through
economies of scale and functional specialisation;
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(c) introducing a team-based assessment, reassessment,
re-computation or issuance or sanction of notice with dynamic
jurisdiction.
23. In the light of the aforementioned provisions, when
we go through the notice (Annexure-P1), we find that the ITO
Ward 1(1), Muzaffarpur while issuing notice under Section 148 of
the Act of 1961 on 30.03.2021 has specifically stated as follows:-
“Whereas I have reasons to believe that
your income chargeable to Tax for the Assessment
Year 2014-15 has escaped Assessment within the
meaning of Section 147 of the Income Tax Act, 1961.
I, therefore, propose to assess/re-assess the
income/loss for the said Assessment Year and I hereby
require you to deliver to me within 30 days from the
service of this notice, a return in the prescribed form
for the said Assessment Year.
This notice is being issued after obtaining
the necessary satisfaction of the PCIT, Patna-1.”
24. It is not in dispute that the notice was duly served on
the registered e-mail of the petitioner but he did not submit any
response. Again a notice under sub-section (1) of Section 142 of
the Act of 1961 was issued on 04.08.2021 whereby the assessee
was called upon to furnish on or before 19.08.2021 the account
and documents specified overleaf. Annexure to the notice states
that assessee should explain the nature and source of income and
he should furnish bank statement for the financial year 2013-14 of
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all bank accounts. This notice also remained unresponded. By
Annexure-P3 dated 15.11.2021 the assessee was called upon by
the NAFC to furnish or cause to be furnished on or before
22.11.2021 the accounts and documents specified in the Annexure
to the notice. The Annexure to the notice contains a detail
description of the information and the explanation called for. The
petitioner remained silent and did not submit his reply. Thereafter
vide Annexure-P4 show cause notice as to why proposed variation
should not be made was issued on 20.01.2022. The order
contained in Annexure-P4 clearly stipulates that after recording
reasons for reopening of the case after taking approval of PCIT-1,
notice was issued under Section 148 dated 30.03.2021 but in
response to the said notice the assessee has not filed any return of
income till date. Annexure-P4 is a draft order of assessment made
under Section 144 read with Section 148 of the Act of 1961. The
petitioner was called upon to submit his objection, if any, to the
office within three days of the receipt of the draft order. It is
specifically stated therein that in case no response is received by
the given date and time the assessment would be finalised as per
the draft assessment order.
25. It is not questioned that the draft assessment order
was duly served upon the petitioner. In fact, Mr. Pathy, learned
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senior counsel does not dispute that the draft order was sent on the
registered e-mail of the petitioner.
26. In the aforementioned background, the assessment
order (Annexure-P5) has been issued.
27. In the assessment order, the learned officer of the
Department in ‘NFAC’ has held that the assessed income of
Rs.1,78,68,410/- for the assessment year 2014-15 under Section
144 read with Section 147 read with Section 144B of the Act of
1961. It is because of the mention of Section 144B of the Act of
1961, Mr. Pathy, learned senior counsel for the petitioner has
submitted that the procedures as prescribed under Section 144B
was required to be followed and according to him it has not been
followed.
28. In order to contest the submissions of Mr. Pathy, Ms.
Archana Shahi, learned senior counsel for the Department has
submitted that sub-sections (1) to (8) of Section 144B has been
substituted vide Finance Act, 2022 with effect from 01.04.2022. In
this case, the notice (Annexure-P1) was issued on 31.03.2021.
Learned counsel has taken us through sub-sections (1) to (8) as
existed prior to their substitution. We, therefore, reproduce sub-
sections (1) to (8) of Section 144B as existed prior to their
substitution as under:-
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17/27“(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:-
(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;
(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
notice 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 intimate the
assessee that assessment in his case shall be completed in
accordance with the procedure laid down under this
section;
(iv) the National Faceless Assessment Centre shall assign
the case selected for the purposes of faceless assessment
under this section to a specific assessment unit in any one
Regional Faceless Assessment Centre through an
automated allocation system;
(v) where a case is assigned to the assessment unit, it may
make a request to the National Faceless Assessment Centre
for-
(a) obtaining such further information, documents or
evidence from the asses-see 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 has been made by the assessment unit, the National
Faceless Assessment Centre shall issue appropriate notice
or requisition to the assessee or any other person for
obtaining the information, documents or evidence
requisitioned by the assessment unit;
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(vii) the assessee or any other person, as the case may be,
shall file his response to the notice referred to in clause (vi),
within the time specified therein or such time as may be
extended on the basis of an application in this regard, to the
National Faceless Assessment Centre;
(viii) where a request for conducting of certain enquiry or
verification by the verification unit has been made by the
assessment unit, the request shall be assigned by the
National Faceless Assessment Centre to a verification unit
in any one Regional Faceless Assessment Centre through
an automated allocation system;
(ix) where a request for seeking technical assistance from
the technical unit has been made by the assessment unit, the
request shall be assigned by the National Faceless
Assessment 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 (vii) 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 giving 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
extended on basis of an application in this regard, file his
response to the National Faceless Assessment Centre,
(xiii) where the assessee fails to file response to the notice
referred to in clause (xi) within the time specified therein or
within the extended time, if any, the National Faceless
Assessment Centre shall intimate such failure to the
assessment unit:
(xiv) the assessment unit shall, after taking into account all
the relevant material available on the record make in
writing, a draft assessment order or, in a case where
intimation referred to in clause (xiii) is received from the
National Faceless Assessment Centre, make in writing, a
draft assessment order to the best of its judgment, either
accepting the income or sum payable by, or sum refundable
to, the assessee as per his return or making variation to the
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National Faceless Assessment Centre.
(xv) the assessment unit shall, while making draft
assessment 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 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
(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,
(xvii) the review unit shall conduct review of the draft
assessment order referred to it by the National Faceless
Assessment Centre whereupon it may decide to-
(a) concur with the draft assessment order and intimate 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 National
Faceless Assessment Centre;
(xviii) the National Faceless Assessment Centre shall, upon
receiving concurrence of the review unit, follow the
procedure 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
assessment 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;
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(xxi) the National Faceless Assessment Centre shall, upon
receiving final draft assessment order follow the procedure
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;
(xxiii) the National Faceless Assessment Centre shall,-
(a) where no response to the show-cause notice is received
as per clause (xiii)
(A) in a case where the draft assessment order or the final
draft assessment order is in respect of an eligible assessee
and proposes to make any variation which is prejudicial to
the interest of said assessee, forward the draft assessment
order or final draft assessment order to such assessee, ог
(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
penalty 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 account
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
assessee in comparison to the draft assessment order or the
final draft assessment order, and-
(A) in case the revised draft assessment order is in respect
of an eligible assessee and there is any variation prejudicial
to the interest of the assessee proposed in draft assessment
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 the assessee, alongwith the demand notice, specifying
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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 assess ment 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;
(xvi) 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
forwarded to the eligible assessee as per item (A) of sub-
clause (a) of clause (xxii) 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 variations to the National Faceless Assessment Centre:
(xxviii) the National Faceless Assessment Centre shall,-
(a) upon receipt of acceptance as per clause (xxvi); or
(b) if no objections are received from the eligible assessee
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 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,
(xxix) where the eligible assessee files his objections with
the Dispute Resolution Panel. the National Faceless
Assessment 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
concerned assessment unit;
(xxx) the assessment unit shall in conformity of the
directions 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 order
and notice for initiating penalty proceedings, if any, to the
assessee, alongwith the demand notice, specifying the sum
payable by, or refund of any amount due to, the assessee on
the basis of such assessment;
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(xxxii) the National Faceless Assessment Centre shall, after
completion of assessment, transfer all the electronic records
of the case to the Assessing Officer having jurisdiction over
the said case for such action as may be required under 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 assessment,
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 centralised
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 assessment
proceedings in the cadre controlling region of a Principal
Chief Commissioner, which shall be vested with the
jurisdiction to make faceless assessment;
(iii) assessment units, as it may deem necessary to facilitate
the conduct of faceless assessment, to perform the function
of making assessment, which includes identification of
points or issues material for the determination of any
liability (including refund) under the Act, seeking
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 facilitate
the conduct of faceless assessment, to perform the function
of verification, which includes enquiry, cross verification,
examination of books of account, examination of witnesses
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 facilitate
the conduct of faceless assessment, to perform the function
of providing technical assistance which includes any
assistance or advice on legal, accounting, forensic,
information technology, valuation, transfer pricing, data
analytics, management or any other technical matter which
may be required in a particular case or a class of cases,
under this section; 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
record, checking whether the relevant and material
Patna High Court CWJC No.13614 of 2024 dt.10-02-2025
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point 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 order, checking
for arithmetical correctness of variations proposed, if any,
and such other functions as may be required for the
purposes of review.
(4) The assessment unit, verification unit, technical unit 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;
(b) Deputy Commissioner or Deputy Director or Assistant
Commissioner or Assistant Director, or Income-tax Officer,
as the case may be;
(c) such other income-tax authority, ministerial staff,
executive or consultant, as considered necessary by the
Board.
(5) All communication 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,
(6) 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
communications between the National Faceless Assessment
Centre, Regional Faceless Assessment Centres and various
units shall be exchanged exclusively by electronic mode:
Provided that the provisions of this sub-section shall not
apply to the enquiry or verification conducted by the
verification unit in the circumstances referred to in sub
clause (g) of clause (xii) of sub-section (7);
(7) For the purposes of faceless assessment-
(i) an electronic record shall be authenticated by-
(a) the National Faceless Assessment Centre by affixing its
digital signature.
(b) assessee or any other person, by affixing his digital
signature if he is required to furnish his return of income
under digital signature, and in any other case by affixing
his digital signature or under electronic verification code in
the prescribed manner:
Patna High Court CWJC No.13614 of 2024 dt.10-02-2025
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(ii) every notice or order or any other electronic
communication shall be delivered the addressee, being the
assessee, by way of-
(a) placing an authenticated copy thereof in the assessee’s
registered account or;
(b) sending an authenticated copy thereof to the registered
email address of the assessee or his authorised
representative; or
(c) uploading an authenticated copy on the assessee’s
Mobile App. and followed by a real time alert;
(iii) every notice or order or any other electronic
communication shall be delivered the addressee, being any
other 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 electronic communication, through his
registered account, and once an acknowledgment 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 electronic
record shall be determined in accordance with the
provisions 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 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 (vi) if he is of the
opinion that the request is covered by the circumstances
referred to in sub-clause (h) of clause (xii)
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(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 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 procedure laid down by the Board;
(x) subject to the proviso to sub-section (6), any
examination or recording of the statement of the assessee or
any 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 sup-ports video conferencing or video
telephony in accordance with the procedure laid down by
the Board;
(xi) the Board shall establish suitable facilities for video
conferencing or video telephony including
telecommunication application software which supports
video conferencing or video telephony at such locations as
may be necessary, so as to ensure that the assessee, or his
authorised representative, 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 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 acknowledgment 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,
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(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:
(h) circumstances in which personal hearing referred to
clause (vii) shall be approved;
(i) general administration and grievance redressal
mechanism in the respective Centres and units.
(8) Notwithstanding anything contained in sub-section (1)
or sub-section (2), the Principal Chief Commissioner or the
Principal Director General in charge of National Faceless
Assessment Centre may at any stage of the assessment, if
considered necessary, transfer the case to the Assessing
Officer having jurisdiction over such case, with the prior
approval of the Board.”
29. It is submitted that notwithstanding the fact that
notice was issued on 31.03.2021 itself, once the records were
transferred to the ‘NFAC’, the department has followed the
procedure as envisaged under Section 144B of the Act of 1961.
Learned counsel has produced the records and has taken us
through the records flagged.
30. A perusal of the documents would show that in the
proposal for scrutiny, reasons for selection are duly recorded. The
Range Head and CIT/PCIT have also stated in their approval order
that they are satisfied with the reasons recorded by the assessing
officer and it is a fit case for issuing notice under Section 148. We,
therefore, find that there is a due approval under Section 151 of the
Act of 1961.
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31. On perusal of the details as available in the
computersheet of order detail, we find that in course of faceless
assessment at every stage approval from competent authorities
have been obtained. Prima-facie, we do not find it a case of
jurisdictional error, hence this Court would refrain from exercising
it’s extraordinary writ jurisdiction in the present case.
32. The petitioner has already chosen to avail alternative
remedy in respect of the assessment year 2013-14. If so advised,
he may avail the remedy of appeal, subject, however, to the
limitation. While considering any application for condonation of
delay, the period spent by the petitioner before this Court in the
present writ application shall be liable to be condoned. All
questions are left open to the parties.
33. This writ application stands disposed of accordingly.
(Rajeev Ranjan Prasad, J)
(Ramesh Chand Malviya, J)
arvind/-
AFR/NAFR CAV DATE 29.01.2025 Uploading Date 10.02.2025 Transmission Date