THE HONOURABLE DR. JUSTICE ANITA SUMANTH W.P.Nos.16373, 14373, 13239, 12696, 13339, 12421, 12845, 10895, 9256 and 10687 of 2021 & 14417 of 2022. The impugned orders of assessment, barring the order in W.P.No.14373 of 2021 that has been dealt with in paragraphs 11 to 19 of this order, are set aside and respondents granted liberty to issue SCN/DAO within a period of four (4) weeks from date of receipt of copy of this order. Let responses be sought, the petitioners heard and orders of assessment be passed de novo. The entirety of the exercise shall not exceed a period of sixteen (16) weeks from the date of receipt of copy of this order. 68. These Writ Petitions are allowed,

IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 15.06.2022, 28.06.2022 and 20.07.2022
PRONOUNCED ON :30.09.2022
CORAM
THE HONOURABLE DR. JUSTICE ANITA SUMANTH
W.P.Nos.16373, 14373, 13239, 12696, 13339, 12421, 12845, 10895, 9256 and 10687 of 2021 & 14417 of 2022
WMP.No.70 & 13644 of 2022, 17349, 15288, 15285, 18111, 17346, 14046, 14049 & 18160, 13490, 13492, 17218, 14170, 14172, 23953, 13204, 13206, 13642 & 13644 of 2021, 11531, 11529 of 2021, 9810, 9811, 11315, 11316 and 27247 of 2021

W.P.No.16373 of 2021:

P.T.Lee Chengalvaraya Naicker Trust,
Rep. by it Secretary:
Mr.P.Sundaram,
2 & 3, E.V.K.Sampath Salai,
Vepery, Chennai-600007
PAN No.AAAAP0093R … Petitioner

Vs.

1.The Income Tax Officer,
National Faceless Assessment Centre
Income Tax Department,
Ministry of Finance,
Room No.401, 2nd Floor, E-Ramp,
Jawaharlal Nehru Stadium, Delhi-110 003

2.ADIT (Exemptions),
No.34, Mahathma Gandhi Road,
Nungambakkam, Chennai-600034. … Respondents
PRAYER in WP.No.16373 of 2021: Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of certiorarified Mandamus calling for the record of the 1st respondent herein in impugned order no. DIN: ITBA/AST/S/143(3)/21-22/1032957712(1) dated 18.05.2021 passed by the 1st respondent for the assessment year 2018-19 and quash the order dated 18.05.2021 passed an consequently direct the 1st respondent to hear the Assessment Proceedings in PAN No.AAAP0093R for AY 2018-19 by giving opportunity to the petitioner.

Writ Petition For Petitioner For Respondents
WP.Nos.16373 of 2021 &14417 of 2022 Ms.G.Vardhini Karthik Mrs. Hema Murali Krishnan
Senior Standing Counsel
WP.Nos.14373, 10687 and 9256 of 2021 Mr.N.V.Balaji Mrs. Hema Murali Krishnan
Senior Standing Counsel
WP.No.12421 of 2021 Mr.S.P.Chidambaram Mr.ANR Jayaprathap
Junior Standing Counsel
WP.No.12696 of 2021 Mr.Sandeep Bagmar Mrs. Hema Murali Krishnan
Senior Standing Counsel
WP.No.12845 of 2021 Mr.R.Sivaraman Mrs. Hema Murali Krishnan
Senior Standing Counsel
WP.No.13239 & 13339 of 2021 Mr.A.S.Sriraman Mrs. Hema Murali Krishnan
Senior Standing Counsel
W.P.No.10895 of 2021 Mr.A.S.Sriraman Mr.ANR Jayaprathap,
Junior Standing Counsel

C O M M O N O R D E R
This batch of matters challenges Faceless assessments framed under Section 144B of the Income Tax Act, 1961 (in short ‘Act’) and were heard on various dates. Since the issue involved was common to all, the writ petitions were constituted into a batch and are being disposed by way of this common order. The provisions of Section 144B were inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, with effect from 01.04.2021 and set out the procedure for framing of assessments on and after 01.04.2021.
2. The scheme of assessment under Section 144B requires the entire process of assessment to be faceless, that is, though the assessment will be conducted by an officer of the Department, the identity of the officer is not revealed. The need or necessity for an interaction with an identified officer of the Department has been done away with.
3. The common violation committed by the respondents in these matters is that, in all the cases comprised in this batch, final orders of assessment in terms of Section 144B have been passed without being preceded by a show cause notice (SCN)/draft order of assessment (DOA).
4.The facts germane to each writ petition are adverted to briefly below:
W.P.Nos.16373 of 2021 and 14417 of 2022 :
5.These writ petitions have been filed by P.T.LeeChengalvaraya Naicker Trust, a public charitable Trust created under the Will of Late P.T.Chengalvaraya Naicker, dated 04.10.1870. The Trust is stated to be in existence close to a century and a half. The main aim of the testator is to provide industrial education, set up orphanages and a charitable hospital for the sick among the downtrodden.
6. The activities of the Trust are supervised by this Court. The Trust is chaired by a retired High Court Judge, the present Chairman being Mr. Justice P.Kalaiyarasan. The Trust claims exemption under Section 10(23C)(iiab) of the Act. It had filed a return in respect of AY 2018-19 on 11.10.2018 declaring ‘nil’ income. Upon selection for scrutiny, notices and questionnaires under Sections 143(2)/142(1) were issued.
7. The petitioner has set out in the writ petition a detailed tabulation of the dates of notices and its replies thereto. Sometime in October, 2020, the petitioner received intimation that the assessment was to be completed under the Faceless Assessment Scheme which requires prior to completion of assessment, the issuance of a Show Cause Notice (SCN)/Draft Assessment Order (DAO).
8. In this case, as per the counter, the petitioner was given numerous opportunities to substantiate its claim and details of the notices issued have also been set out in the counter. According to the respondents, despite ample opportunity having been afforded, only two replies were received from the petitioner, though requests for adjournment were periodically made.
9. As in other cases, the respondents do not specifically address the violation of non-issue of SCN/DAO, and merely aver to the position that the impugned order is statutorily amenable to appeal. Since several notices were issued to the petitioner, they pray that the petitioner be relegated to first appeal.
10. In W.P.No.14417 of 2022, the petitioner challenges an order of penalty consequent on the impugned order of assessment dated 18.05.2021. No counter has been filed in this matter and the decision taken in the challenge to the order of assessment would be applicable in regard to this matter as well.

W.P.No.14373 of 2021 :
11. The petitioner is a private limited company and states that it is engaged in the business of construction of residential flats and villas. In respect of AY 2018-19, a return of income was filed that was selected for scrutiny. There was an exchange of notices and intimations under the relevant statutory provisions and the petitioner was also intimated on 14.10.2020 that the e-assessment would be completed under the Faceless Assessment Scheme, 2019.
12. The deliberations in regard to the issues that arose from the return of income continued, the parties being in correspondence with each other. While this is so, a show cause notice was issued by the respondent on 09.04.2021 calling for a response by 12.04.2021. The petitioner claims that a request was made on 13.04.2021 conveying to the respondent that its Finance Controller had been diagnosed with Covid-19 and hence, seeking an adjournment.
13. According to the petitioner, it was afforded only one working day to respond to the notice as 10th and 11th happened to be a weekend. The petitioner claims to have filed its reply to the show cause notice on 19.04.2021 at 11.04 hours. However, an order of assessment has come to be served on the petitioner on 19.04.2021 at 21.50 hours. The request of the petitioner for an adjournment, though filed online on the e-filing platform, does not appear to have been dealt with.
14. This matter does not link to the present batch since admittedly, show cause notice has been issued prior to the finalisation of assessment and thus, the only issue that is agitated is whether, there has been compliance of the principles of natural justice and whether the petitioner has been afforded sufficient opportunity to make its submissions prior to the passing of the impugned order.
15. In counter, the respondents reiterate the availability of an alternate remedy and also state that there had been no effective response to earlier notices sent. They also point out that, in the reply dated 19.04.2021, the request set out seeking an adjournment was not on account of the illness of the Finance Controller but only on the ground that the time granted for completion was inadequate.
16. That apart, they state that, despite the petitioner submitting that objections would be filed within three days, the response was filed beyond the period of three days, on 19.04.2021. The very averments in counter reveal that response dated 19.04.2021 has been received by the officer.
17. Thus, in the interest of substantial justice and seeing as the time originally granted to the petitioner to respond was only 24 hours, I am of the considered view that the passing of the impugned assessment order without reference to the petitioner or granting it effective opportunity of hearing cannot be accepted. The impugned order is set aside.
18. The petitioner is granted a period of four weeks from the date of receipt of this order to file its reply with supporting documents, if any. For the aforesaid purpose, the website will be enabled by the respondent. Thereafter, the petitioner shall be heard and an order of assessment shall be passed de novo within a period of four weeks from the date of personal hearing.
19. In any event, the entirety of the exercise shall not exceed 90 days from the date of receipt of certified copy of this order. W.P.No.14373 of 2021 is allowed as above.
W.P.No.13239 of 2021 :
20. The petitioner claims to be a public charitable Trust holding a registration under Section 12A of the Act. In respect of AY 2018-19, a return was filed and taken up for limited scrutiny. A notice under Section 143(2) was issued followed by an order dated 15.10.2020 from the National e-Assessment Centre (NeAC)/R1, intimating the petitioner that its assessment would be completed under the Faceless Assessment Scheme, 2019.
21. Parallel therewith, questionnaires were issued calling for various particulars, to which, responses were filed on 24.11.2020 and 24.03.2021, according to the petitioner. This culminated in the impugned order of final assessment, wherein the claim of depreciation by the petitioner was rejected by application of provisions of Section 11(6) of the Act. In this matter as well, no DAO/SCN has been issued prior to passing of the final assessment order. Hence, this writ petition.
W.P.No.12696 of 2021 :
22. The petitioner is engaged in the operation and maintenance of power generating plants. In respect of AY 2018-19, a return was filed that was processed by the Central Processing Unit (CPC) by issue of an intimation under Section 143(1) on 15.11.2019. The petitioner made an application for rectification of mistakes under Section 154 of the Act on 10.12.2019 and the CPC had responded stating that the right of rectification had been transferred to the Assessing Authority.
23. The petitioner states that it has approached the Assessing Authority for rectification relying on a revised audit report and the said application is still pending before the Assessing Officer. While this is so, the return was taken up for scrutiny and notices and questionnaires were issued by the Assessing Officer.
24. The petitioner had responded on 04.10.2019, 02.12.2020 and 15.12.2020 enclosing its explanation to the proposals along with supporting documents. After prolonged silence on the part of the respondents, the petitioner received out of the blue an order of assessment dated 27.04.2021 making several variations to the total income returned. Hence, this writ petition, alleging abject non-compliance with the procedural requirements of Section 144B that requires the passing of a SCN/DAO prior to framing of assessment.
W.P.No.13339 of 2021 :
25. The petitioner is engaged in the manufacture of industrial chemicals and is stated to be a regular assessee to Income tax. A return was filed in respect of AY 2018-19 and notice was issued by the officer for initiation of proceedings and scrutiny. Notice under Section 143(2) dated 23.09.2019 for verification of certain enumerated issues was followed by questionnaires under Section 142(1) on various dates proposing disallowances to the return filed.
26. Time was granted till 06.04.2021 to file response. The last notice was issued on 31.03.2021. While it does not appear that the petitioner had responded to the earlier notices, in response to the last notice dated 06.04.2021, a request for adjournment was filed citing the difficulties posed by the pandemic.
27. While this is so, the impugned order of assessment has come to be passed in terms of Section 143(3) r/w.144B without, according to the petitioner, considering the e-response filed on 19.04.2021. In counter, on the question of natural justice, the respondents point out that the petitioner had not availed several opportunities that had been afforded and whatever submissions had been made were incomplete.
28. In fine, the respondents would submit that, in a case such as the present, where the petitioner has not been compliant and cooperative in the conduct of assessment, the petitioner must be relegated to alternate remedy. No specific arguments have been raised in regard to the non-issuance of a SCN/DAO.
W.P.No.12421 of 2021 :
29. The petitioner is engaged in the business of manufacture of hydraulics motors and components thereto. In respect of AY 2017-18, a return was filed in time and notices and questionnaires under Sections 143(2)/142(1) issued. The proceedings were referred to the Transfer Pricing Officer (TPO) for determination of Arms’ Length Price.
30. After consideration of the Transfer Pricing documentation, other relevant documents and the submissions by the petitioner, an order came to be passed by the TPO under Section 92CA of the Act holding the international transactions to be at Arms’ Length.
31. Thereafter, the Assessing Officer/R1 resumed proceedings for assessment and called for various particulars vide notice dated 01.08.2019 including specifically, details of increase in share capital. The petitioner responded on 12.03.2021, admittedly delayed on account of the pandemic, setting out its response to the notice enclosing and specifically addressing the issue of increase in share capital.
32. This has come to be followed by the impugned assessment order dated 23.04.2021 making an addition under Section 56(2)(viib) of the Act.
33. In this matter as well, the Assessing Officer has not issued a DAO prior to the passing of the impugned assessment order.
W.P. No.12845 of 2021 :
34.The petitioner is engaged in the manufacture of automotive components for two, three and four wheelers and states that it is a regular assessee under the provisions of the Act. The impugned assessment relates to AY 2018-19, for which, a return was filed within time. The assessment was picked up for scrutiny and notices and responses were exchanged between the parties.
35. There was a lull in the proceedings on account of the pandemic till 15.12.2020 when the petitioner received intimation that the proceedings would be completed under the e-assessment scheme, 2019. Notice under Section 142(1) of the Act was issued on 15.12.2020 calling upon the petitioner to furnish various documents in respect of the issues already under discussion and seeking a reply on or before 30.12.2020.
36. Admittedly, the petitioner tarried and furnished a reply only on 30.01.2021. In response, a further notice questionnaire under Section 142(1) was received on 01.03.2021 calling for a reply on or before 06.03.20221. The petitioner complied in time and also, specifically sought a personal hearing. No further notice was received and impugned assessment order has come to be passed straightaway on 24.04.2021.
37. Apart from the objection raised by the petitioner in regard to violation of principles of natural justice and non-adherence to the procedure set out under the e-assessment scheme, the petitioner also points out that there are variations between the issues that have been raised in notices and those that the officer has addressed in the impugned order.
W.P.No.10895 of 2021 :
38. The petitioner is a company and challenges an order of final assessment for AY 2018-19 dated 08.04.2021. Pursuant to a return of income filed within time, proceedings were initiated for limited scrutiny, for verification of expenditure incurred for earning exempt income. Notices and questionnaires were issued, to which, the petitioner claims to have replied.
39.While this is so, the National e-Assessment Centre intimated the petitioner on 15.10.2020 that the assessment would be completed under the new Scheme. The petitioner makes reference to its replies dated 24.12.2020, 11.03.2021 and 20.03.2021 in response to the notices received from the authorities.
40. Without hearing the petitioner in person, the impugned order of assessment has come to be p5assed confirming the proposals in the pre-assessment notices and sans a SCN/DAO.
W.P.No.9256 of 2021 :
41. The petitioner is an individual and a senior citizen, who challenges an order of assessment for AY 2018-19. She claims to be engaged in the business of lending and borrowing funds. Pursuant to filing of the return, the petitioner and the respondent had been in communication with each other for the ongoing scrutiny proceedings.
42. According to the petitioner, despite furnishing of all details as sought for by the officer, the impugned order of assessment has come to be passed on 03.03.2021 without being preceded either by a SCN or a DAO. She thus, alleges violation of procedure under Section 144 of the Act and Notifications 60/2020 and 61/2020. She also alleges that she was not heard prior to passing of the order.
43. In counter, the authorities defend the impugned order urging the Court to relegate the petitioner to alternate remedy. The respondents state that the grant of personal hearing is not mandatory under the scheme of the Act. As in other writ petitions, there is no response in regard to the procedure under the e-assessment scheme relating to issuance of SCN/DAO.
W.P.No.10687 of 2021 :
44. The petitioner is engaged in the business of structural glazing and wall cladding works and states that it is a regular assessee to Income tax. The challenge is to a final order of assessment dated 27.03.2021 passed, allegedly in violation of the procedures set out for Faceless assessment.
45. Pursuant to a return filed by the petitioner in time for AY 2018-19, notice and questionnaire was received on 10.08.2018 and 22.02.2021. In response, the petitioner furnished its explanation with supporting materials on 05.03.2021. The impugned order has come to be passed without hearing the petitioner and without being preceded by a SCN/DAO.
46. In the counter, apart from the defence of alternate remedy, the respondent has also stressed upon the fact that the Standard Operating Procedure (SOP) that has been devised in collaboration with the Directorate of Systems and as approved for the purpose of implementation of the Faceless Assessment Scheme, 2019 has been adhered to, faithfully.
47. The respondents take the defence that the procedure adopted is in order and that the provisions do not envisage issuance of a draft assessment order to an assessee. For this purpose, they rely on sub-clauses (xiv) and (xvi) of Section 144B to state that, it was only when a modification was proposed that an opportunity was to be extended to the assessee.
48. The common submissions advanced by the learned counsels for the petitioners are that the Faceless Assessment Scheme specifically requires a show cause notice/draft assessment order to be issued by the Assessment Units setting out the final proposals, based upon which, assessments are intended to be finalised. In none of the cases, barring W.P.No.14373 of 2021, has a show cause notice/draft assessment order been issued.
49. This Court has had occasion to deal with instances of violation of principles of natural justice in the framing of faceless assessments. Based upon the consensus arrived at between learned counsel in those matters, the assessments were remanded to the file of the Assessing Officers to be redone de novo.
50. In this batch of writ petitions, the position is a little different and the petitioners vehemently argue that the non-issuance of a SCN/DAO vitiates the procedure for assessment beyond repair. They draw attention to the statutory provisions of Section 144B, that, according to them mandate issuance of a SCN/DAO prior to finalisation of assessment.
51. They rely on various judgments/decision of High Courts to buttress their submissions. In the case of ACIT v. Hotel Blue Moon [2010 188 Taxmann 113 SC], Sapthagiri Finance & Investments v. ITO [2012 25 taxmann.com 341 Mad] and CIT v. Alstom T & D India Ltd. [2014 45 taxmann.com 424 Madras], the Hon’ble Supreme Court and this Court respectively considered the veracity of assessments where no statutory notice under Section 143(2) had been issued.
52.This Court, in the case of The Asst. Commissioner of Income Tax, Media Circle II and Ors. v. Vijay Television Private Ltd. And Ors. (W.A.Nos.1327 to 1329 of 2014 dated 23.04.2018) had set aside an assessment under Section 144C for want of a draft assessment order preceding the impugned assessment. The result was in favour of the assessee, the Courts holding that the absence of a statutory notice under Section 143(2) and DAO under Section 144C, would invalidate the assessments. They also rely upon the decision of the Bombay High Court in the case of Mantra Industries Ltd. v. National Faceless Assessment Centre [2021 131 taxmann.com 165 Bombay]. The petitioners, in one voice, thus pray that the impugned orders be quashed and the writ petitions allowed.
53. The respondents accede to the fact that no SCN/DAO was passed in the present cases. However, they defend the impugned orders stating that the omission to issue a DAO/SCN is only a technical violation and one that is curable. Their request is that the Court set aside the impugned orders of assessment and grant another opportunity to the respondents to issue a SCN/DAO to the petitioners, receive their objections, hear them and frame assessments de novo.
54. They rely upon orders of various Courts that have, in similar circumstances and faced with similar violations as in the present case, remanded the assessments to be re-done de novo. They would distinguish the order in the case of Vijay Television Pvt. Ltd. and others (supra) pointing out that it was rendered in the context of Section 144 C of the Act which contemplates an entirely different scheme of assessment.
55. As for the decision in Mantra Industries (supra) relied upon by the petitioners, they point out that the Hon’ble Supreme Court has stayed the order of the High Court as reported in National Faceless Assessment Centre vs Mantra Industries Ltd [2022 137 taxmann.com 210 SC]. However, a perusal of the order as aforesaid reveals that the stay relates only to the observations made by the Bench in paragraph 9 of the order, extracted below:
‘9.Respondents are put to notice, and Mr.Sharma to circulate this order right from the Revenue Secretary to everybody in the Finance Ministry, that if such orders are continued to be passed, this Court will be constrained to impose substantial costs on the concerned Assessing Office to be recovered from his/her salary and also direct the department to place such judicial orders in the career records of such Assessing Officer.’
56. Heard learned counsel. The objects and reasons on the basis of which the Faceless Assessment Scheme was introduced is as follows:
New scheme for scrutiny assessment
Section 143 of the Act provides for the procedure for assessment. Sub-section (3) of the said section empowers the Assessing Officer to make, by an order in writing, an assessment of total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment.
It is proposed to prescribe a new scheme for the purpose of making assessments so as to impart greater transparency and accountability, by eliminating the interface between the Assessing Officer and the assessee, optimal utilization of the resources, and introduction of team-based assessment.
Therefore, it is proposed to amend the section 143, by inserting a new sub-section (3A), after sub-section (3), enabling the Central Government to prescribe the aforementioned new scheme for scrutiny assessments, by way of notification in the Official Gazette.
It is further proposed to insert sub-section (3B) in the said section, enabling the Central Government to direct, by notification in the Official Gazette, that any of the provisions of this Act relating to assessment shall not apply, or shall apply with such exceptions, modifications and adaptations as may be specified therein. However, no such direction shall be issued after the 31st March 2020.
It is also proposed to insert sub-section (3C) in the said section, to provide that every notification issued under the sub-section (3A) and sub-section (3B), shall be laid before each House of Parliament, as soon as may be.
These amendments will take effect from 1st April, 2018.
57. The Scheme provides for the finalization of an assessment by the National Faceless Assessment Centre (NFAC), an umbrella unit, the Regional Assessment Unit, and the assessee concerned.
58. After the initial exchange of show cause notices and responses, the Assessment Unit is to prepare and forward a draft order proposing variations, if any, to the return of income and serve the same upon the assessee for response.
59. In the present batch of cases, the authorities have admittedly, omitted to issue SCN/DAO and the question that arises is as to whether this may be treated as a technical violation that is curable, or whether it assumes a more serious dimension, and would vitiate the assessment.
60. The relevant clauses in Section 144B, to the extent they are relevant to decide the issue on hand, are extracted below:
144B. Faceless Assessment. – Notwithstanding anything to the contrary contained in any other provision of this Act, the assessment, reassessment or recomputation under sub-section (3) of section 143 or under section 144 or under section 147, as the case may be, with respect to the cases referred to in sub-section (2), shall be made in a faceless manner as per the following procedure, namely:—

…………
(xvii) the review unit shall conduct review of the income or loss determination proposal assigned to it by the National Faceless Assessment Centre, under sub-clause (b) of clause (xvi), whereupon it shall prepare a review report and send the same to the National Faceless Assessment Centre;
(xviii) the National Faceless Assessment Centre shall, upon receiving the review report under clause
(xvii), forward the same to the assessment unit which had proposed the income or loss determination proposal;
(xix) the assessment unit shall, after considering such review report, accept or reject some or all of the modifications proposed therein and after recording reasons in case of rejection of such modifications, prepare a draft order;
(xx) the assessment unit shall send such draft order prepared under sub-clause (a) of clause (xvi) or under clause (xix) to the National Faceless Assessment Centre;
(xxi) in case of an eligible assessee, where there is a proposal to make any variation which is prejudicial to the interest of such assessee, as mentioned in sub-section (1) under section 144C, the National Faceless Assessment Centre shall serve the draft order referred to in clause (xx) on the assessee;
(xxii) in any case other than that referred to in clause (xxi), the National Faceless Assessment Centre shall convey to the assessment unit to pass the final assessment order in accordance with such draft order, which shall thereafter pass the final assessment order and initiate penalty proceedings, if any, and send it to the National Faceless Assessment Centre;
(xxiii) upon receiving the final assessment order as per clause (xxii), the National Faceless Assessment Centre shall serve a copy of such order and notice for initiating penalty proceedings, if any, on 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;
(xxiv) where a draft order is served on the assessee as referred to in clause (xxi), such assessee shall,—
(a) file his acceptance of the variations proposed in such draft order to the National Faceless Assessment Centre; or
(b) file his objections, if any, to such variations, with—
(I) the Dispute Resolution Panel, and
(II) the National Faceless Assessment Centre, within the period specified in sub-section (2) of section 144C;
(xxv) the National Faceless Assessment Centre shall,—
(a) upon receipt of acceptance from the eligible assessee; or
(b) if no objections are received from the eligible assessee, within the period specified in sub-section (2) of section 144C,
intimate the assessment unit to complete the assessment on the basis of the draft order;
……………’
61. One thing is clear, that the requirement of SCN/DAO is mandatory and cannot be sidestepped by the respondents. The Supreme Court, in the case of Hotel Blue Moon (supra) was concerned with non-issue of a notice under Section 143(2) within the period prescribed. The High Court had held that failure to issue a notice under Section 143(2) was only a procedural irregularity, and one that could be dispensed with.
62. The respondents sought to take benefit of the position that Section 158BC specifically referred to certain provisions of the Income Tax Act that were required to be followed by the assessing officer and pointed out that there were no reference therein to a notice under Section 143(2). In that context, the High Court accepted the contention of the assessee that failure to issue a notice under Section 143(2) was fatal to the assessment.
63. In appeal by the Revenue, the Apex Court held that since an assessment had necessarily to be framed under Section 143(3), as a consequence, a notice under Section 143(2) was also mandatory. This Court, in the cases of Sapthagiri Finance & Investments and Alstom T & D India Ltd., (supra) has held to similar effect.
64. This Court in the case of Vijay Television Private Ltd. and Ors (supra) considered the impact of non-issue of a notice under Section 144C. In my view, notices under Sections 143(2) and 144C stand on a different footing and cannot be equated with a SCN/DAO, to be issued prior to completion of faceless assessment.
65. In the case of faceless assessments as well, the procedure for scrutiny commences with the issuance of a statutory notice in terms of Section 143(2). The notices to be issued thereafter are part of the procedure for faceless assessments and cannot be equated to a notice under Section 143(2) of the Act. Reliance upon Section 144C is also of no assistance to the petitioners as Section 144C provides for a separate and distinct scheme of assessment and the issuance of a DAO is part of that scheme.
66. Though failure to issue the notices as provided in Section 144B would certainly vitiate the proceedings as being in violation of the principles of natural justice, it is an infirmity that may be cured by permitting such SCN/DAO to be issued now. The impugned assessments are set aside and liberty granted to the respondents to complete the assessments de novo, in accordance with law. I find overwhelming support from the following cases wherein the failure to issue a SCN/DAO has been construed as a procedural irregularity.

Bombay High Court
(i) Golden Tobacco Ltd. Vs. National Faceless Assessment Centre [2021 (132) taxmann.com 296 (Bombay)]
(ii) Trendsutra Client Services (P.) Ltd. Vs. Assistant Commissioner of Income Tax [2021 (132) taxmann.com 104 (Bombay)]
(iii) Piramal Enterprises Ltd. Vs Additional/Joint/Deputy/Assistnat Commissioner of Income Tax/Income Tax Officer [2021 (129) taxmann.com 18 (Bombay)]

Delhi High Court

(i) Pardesi Developers (P.) Ltd. Vs. National Faceless Assessment Centre [2021 (131) taxmann.com 246 (Delhi)]
(ii) Akashganga Infraventures India Ltd. Vs. National Faceless Assessment Centre, Delhi [2021 (130) taxmann.com 401 (Delhi)]
(iii) Pooja Singla Builders and Engineers (P.) Ltd. Vs. National Faceless Assessment Centre [2021 (132) taxmann.com 7 (Delhi)]
(iv) YCD Industries Vs. National Faceless Assessment Centre, Delhi [2021 (127) taxmann.com 606 (Delhi)], Anju Jalaj Batra Vs. National E-Assessment Centre [2021 (128) taxmann.com 165 (Delhi)]
(v) DJ Surfactants Vs. National E-Assessment Centre, Income Tax Department, New Delhi [2021 (127) taxmann.com 641 (Delhi)]
(vi) KBB Nuts (P.) Ltd. Vs. National Faceless Assessment Centre, Delhi (Earlier National E-Assessment Centre, Delhi) [2021 (127) taxmann.com 194 (Delhi)]
(vii) Sanjay Aggarwal Vs. National Faceless Assessment Centre, Delhi [W.P.(C) 5741/2021] order dated 02.06.2021
(viii) Interglobe Enterprise Pvt. Ltd. Vs. National Faceless Assessment Centre [2021 (130) taxmann.com 54 Delhi]
(ix) Javin Construction Pvt. Ltd. Vs. National Faceless Assessment Circle [2021 (130) taxmann.com 430 (Delhi]
(x) Faqir chand Vs National E-Assessment Centre, Delhi [130 taxmann.com 323]

Orissa High Court

(i) Orissa Stevedores Ltd. Vs. Union of India [2021 (128) taxmann.com 163 (Orissa)]

Andhra Pradesh High Court

(i) Mudar Sudheer Vs Union of India [138 taxmann.com 47]

67. The impugned orders of assessment, barring the order in W.P.No.14373 of 2021 that has been dealt with in paragraphs 11 to 19 of this order, are set aside and respondents granted liberty to issue SCN/DAO within a period of four (4) weeks from date of receipt of copy of this order. Let responses be sought, the petitioners heard and orders of assessment be passed de novo. The entirety of the exercise shall not exceed a period of sixteen (16) weeks from the date of receipt of copy of this order.

68. These Writ Petitions are allowed, connected Miscellaneous Petitions are closed and there is no order as to costs.
30.09.2022
sl/mkn/kbs
Index : Yes
Speaking Order

To

1.The Income Tax Officer,
National Faceless Assessment Centre
Income Tax Department,
Ministry of Finance,
Room No.401, 2nd Floor, E-Ramp,
Jawaharlal Nehru Stadium, Delhi-110 003

2.ADIT (Exemptions),
No.34, Mahathma Gandhi Road,
Nungambakkam,
Chennai-600034
Dr.ANITA SUMANTH, J.,
Sl/mkn/kbs

W.P.Nos.16373, 14373, 13239, 12696, 13339, 12421, 12845 of 2021,
14417 of 2022, 10895, 9256 and 10687 of 2021
WMP.No.70 & 13644 of 2022, 17349, 15288, 15285, 18111, 17346, 14046, 14049 & 18160, 13490, 13492, 17218, 14170, 14172, 23953, 13204, 13206, 13642 & 13644 of 2021, 11531, 11529 of 2021, 9810, 9811, 11315, 11316 and 27247 of 2021