Kottex Industries Private Limited Vs National Faceless Assessment Centre (Gujarat High Court)
In Kottex Industries Private Limited vs. National Faceless Assessment Centre, the Gujarat High Court examined whether an income tax assessment order dated 26 September 2021 was valid under the provisions of the Income Tax Act, 1961. The petitioner challenged the order passed under Sections 147 and 144B, along with the corresponding demand notice under Section 156, arguing that the order violated the principles of natural justice and failed to adhere to the mandatory procedural requirements of the Faceless Assessment Scheme under Section 144B. The petitioner asserted that no draft assessment order was served, despite detailed responses and a request for a personal hearing being submitted. As a result, a tax demand of over ₹3.69 crore was raised without following due process.
The Court reviewed the sequence of notices and replies exchanged between the parties, noting that although the petitioner requested an adjournment and later submitted responses along with documentary evidence, the assessing authority proceeded to pass the final order without issuing the mandatory draft assessment order. The Court found that this was in direct violation of Section 144B(1)(xvi)(b), which requires a draft order to be served before finalisation. Furthermore, under Section 144B(9), any order not following prescribed procedure is rendered non-est (null and void). The Court referenced multiple precedents, including Atulbhai Kantilal Mehta and Agrawal JMC Joint Venture, where similar violations were found to invalidate assessment proceedings.
