JUDGMENT : (Bhargav D. Karia, J.) : 1. Heard learned advocate Mr. B.S.Soparkar for the petitioner and learned Senior Standing Counsel Mr. Karan Sanghani for the respondents. 2. Rule returnable forthwith. Learned Senior Standing Counsel Mr. Karan Sanghani waives service of notice of rule for the respondents. 3. Having regard to the controversy in the narrow compass, with the consent of the learned advocates for the parties, the matter is taken up for hearing. 4. By this petition under Article 226 of the Constitution of India , the petitioner has challenged Assessment Order dated 18.03.2024 passed by the Assistant Commissioner of Income Tax, Rajkot, under section 143(3) read with section 263 of the Income Tax Act, 1961 (for short ’the Act’)for A.Y.2018-19. 5. Brief facts of the case are as under: 5.1 The Petitioner Company was incorporated on 12.04.2017 in the business of manufacturing of ceramic vitrified tiles. The Petitioner filed its return of income for the Assessment Year 2018-19 on 21.09.2018 declaring loss of Rs.4,33,27,151/-. Thereafter, the case of the Petitioner was selected for complete scrutiny for three issues including the issue of Share capital. Assessment order u/s 143(3) was passed by the Respondent no. 2 on 18.01.2021 accepting returned income. 5.2 Thereafter the case of the Petitioner was taken up for revision u/s 263 of the Act and the assessment order dated 18.01.2021 was set aside vide order dated 27.03.2023. The Petitioner has appealed against the order u/s 263 of the Act dated 27.03.2023 and the same is pending before the Income Tax Appellate Tribunal. 5.3 Meanwhile, the proceedings consequent to the order u/s 263 of the Act commenced and the following correspondence took place: Date Event Date Event 12.10.2023 Intimation Notice by the Respondent 2 Annexure D 29.11.2023 Notice u/s. 142(1) by respondent No.1 Annexure E1 21.12.2023 Adjournment Request Annexure E2 11.12.2023 Notice u/s. 142(1) by Respondent 1 Annexure F1 11.12.2023 Letter withdrawing the notice dated 11.12.2003 Annexure F2 08.02.2024 SCN by respondent 1 Annexure G1 15.02.2024 Reply by petitioner Annexure G2 01.03.2024 Letter Annexure H1 04.03.2024 05.03.2024 06.03.2024 07.03.2024 08.03.2024 Reply submitted Annexure H2 Colly 6. Learned advocate Mr. Learned advocate Mr. Soparkar submitted that the petitioners specifically asked for personal hearing in both the submissions dated 15.02.2024 and 08.03.2024 but the respondent No.1 passed impugned order on 18.03.2024 without providing opportunity of personal hearing in violation of principle of natural justice and passed the impugned assessment order, assessing total income at Rs. 12,59,28,000/- raising demand of Rs. 14,00,76,320/- under section 143(3) read with section 263 of the Act. 6.1 It was further submitted that the impugned assessment order is passed without jurisdiction as the initially case was with National Faceless Assessment Center. However, intimation dated 12.02.2023 for completion of the assessment in accordance with the procedure of section 144B(8) of the Act was issued for the year under consideration and thereafter the jurisdictional assessment officer issued a notice under section 142(1)of the Act on 29.11.2023. It was submitted that the petitioner has not received any notice regarding transfer of case under section 144B(8) of the Act. It was submitted that the assessment order also does not refer to any such transfer of case from National Faceless Assessment Center to that of jurisdictional Assessing Officer under section 144B(8) of the Act, after passing of the order dated 27.03.2023 by the PCIT, Rajkot under section 263 of the Act. It was therefore submitted that the jurisdictional Assessing Officer has wrongly assumed the jurisdiction to pass order in absence of transfer of case under section 144B(8) of the Act. 6.2 It was further submitted that the circular dated 06.09.2021 issued by the Central Board of Direct Taxes provides that the request for personal hearing was generally to be allowed to the assessee with approval of the range head in cases which are transferred to the jurisdictional Assessing Officer after filing of the written submissions and issue the show cause notice for personal hearing through video conference. 6.3 It was submitted that the respondent Assessing Officer therefore ought to have given opportunity of personal hearing to the petitioner before passing impugned assessment order. In support of his submissions learned advocate Mr. Soparkar referred and relied upon following decisions: - Bharat Aluminium Company Ltd vs. Union of India [2022] 134 taxmann.com 187 (Delhi); - Maheshkumar Bhagvandas Patel vs. Income Tax Officer [2023] 153 taxmann.com 24(Guj); - Dediyasan Industrial Coop. In support of his submissions learned advocate Mr. Soparkar referred and relied upon following decisions: - Bharat Aluminium Company Ltd vs. Union of India [2022] 134 taxmann.com 187 (Delhi); - Maheshkumar Bhagvandas Patel vs. Income Tax Officer [2023] 153 taxmann.com 24(Guj); - Dediyasan Industrial Coop. Credit Society Ltd vs. Addl./Jt./Dy./Assistant Commissioner of Income-tax/Income-tax Officer reported in [2022] 141 taxmann.com 452 (Guj.); - Agrawal Jmc Joint Venture Vs Assistant/Joint/Deputy/Assistant Commissioner Of Income Tax/Income Tax Officer in Special Civil Application No. 7477 of 2021. 7. On the other hand, learned Senior Standing Counsel Mr. Karan Sanghani submitted that the petition may not be entertained in view of the alternative efficacious remedy available to the petitioner by preferring the appeal before the CIT(A) and further appeal before the Appellate Tribunal. 7.1 It was submitted that the contention raised by the petitioner that the respondent-Assessing Officer as being the jurisdictional Assessing Officer has no jurisdiction to pass impugned order in view of the fact that assessment for A.Y. 2018-19 was finalized by the assessment unit being National Faceless Assessment Center under section 143(3) on 18.01.2021, by accepting return income and subsequently, pursuant to the order dated 27.03.2023 passed under section 263 of the Act, Assessing Officer was directed to make appropriate inquiry in relation to the transaction of Rs. 12,59,28,000/- and appropriately disallowed the same under section 68 read with section 115BE of the Act and accordingly, the proceedings under section 143(3) read with section 263 was initiated and case was transferred to faceless assessment unit on 12.10.2023 as per section 144B of the Act and thereafter case proceeding were transferred from National Faceless Assessment Center to the jurisdictional Assessing Officer on 13.11.2023 with the following notings/ remarks: “As per NAFAC directions the case is transferred to JAO being a partially set aside case and to be completed by JAO only.” 7.3 The aforesaid remarks was referred to by learned advocate Mr. Sanghani appearing in the order sheet annexed with the affidavit-in-reply. It was therefore submitted that the petitioner could not have contended that the assessment can only be framed by the national faceless assessment unit. 7.4 It was further submitted that the request of the petitioner to grant personal hearing was rejected by the respondent no.1 as there was no functionality to conduct hearing through video conference. 7.5 Learned Senior Standing Counsel Mr. 7.4 It was further submitted that the request of the petitioner to grant personal hearing was rejected by the respondent no.1 as there was no functionality to conduct hearing through video conference. 7.5 Learned Senior Standing Counsel Mr. Sanghani referred to and relied upon the following averments made in the affidavit in reply filed on behalf of the respondent No.1 denying the opportunity of hearing to the petitioner: “The petitioner has contended that the impugned assessment order is passed without affording personal hearing and therefore, the same is passed in violation of principles of natural justice. I humbly submit that the petitioner vide reply dated 15.02.2024 and 08.03.2024 requested the opportunity of personal hearing through video conference to explain the case. The request of the assessee was rejected as the Respondent No.1 has no functionality to conduct hearing through Video Conference.” 7.5 It was therefore submitted that in view of the above facts, the petitioner may be relegated to avail alternative efficacious remedy to file application before the CIT (Appeal). 8. Having heard learned advocates for the respective parties and considering the facts of the case, the contentions raised on behalf of the respondent that there is no functionality to conduct hearing through video conference cannot be accepted because as per the provisions of the section 144B of the Act as well as circular dated 06.09.2021 issued by the CBDT, the respondent-Assessing Officer is required to give personal hearing through video conference and if the facility is not available then the personal hearing is to be conducted in a designated area in Income Tax Office and the hearing proceedings are to be recorded. Circular No. 06.09.2021 issued by the CBDT reads as under: “1. The Central Board of Direct Taxes (CBDT) has accorded approval for transfer of assessments/penalties to Jurisdictional Assessing Officers (PAN based), as found necessary, on case- to-case basis in terms of Section 4B(8) of the Income-tax Act, 1961 (Act)/clause 5(2) of Faceless Penalty Scheme, 2021. 2. The Jurisdictional Assessing Officer (JAO) shall complete the assessments/penalties in such cases as per the following broad contours to the extent technically feasible:- A. All processes in cases transferred under section 144B(8) of the Act/clause 5(2) of Faceless Penalty Scheme, 2021 may be conducted electronically to the extent technically feasible, except in those cases where the assessee does not have e-filing account/registered e-mail to communicate electronically with JAO. For cases without digital foot print, the JAO shall endeavor to get the filing account of the assessee registered and then conduct the proceedings in an electronic manner. B. The request for personal hearings shall generally be allowed to the assessee with the approval of Range Head, mainly after the assessee has filed written submission to the show cause notice, Personal hearing may be allowed to the assessee preferably through Video Conference. If Video Conference is not technically feasible, personal hearings may be conducted in a designated area in Income-tax Offices. The hearing proceedings may be recorded. C. Use of Faceless processes such as VU for online verification, TU for Technical inputs etc. may also be considered for non-faceless regime to the extent technically feasible. D. In order to have consistency with the unit concept in faceless regime, the Range Head may compulsorily be involved in the finalization of assessment of such cases transferred to JAO, for which the provisions of Section 144A of the Act may suitably be invoked. In penalties, the approval of Range Head is already embedded in Section 274(2) of the Act, over a specific monetary ceiling of ‘penalty imposable’. Same may be adhered to. 3. It is also clarified that in respect of such cases transferred, the JAO shall take into account the proceedings Conducted so far under the faceless regime and proceed further as per the provisions of the Act and broad Contours of modalities as indicated above. 4. This issues with the approval of Chairman, cept)” 9. Therefore, in view of the above circular more particularly para 2(B) thereof, the respondent Assessing Officer was required to give personal hearing to the petitioner and if it is not technically possible through video conference, then the personal hearing ought to have been conducted in a designated area of the Income Tax office. Therefore, the contention of the respondent which is stated on oath is contrary to the circular issued by the CBDT. 10. Therefore, the contention of the respondent which is stated on oath is contrary to the circular issued by the CBDT. 10. The contention raised on behalf of the respondent that the petitioner has alternative efficacious remedy to file appeal before the CIT (Appeal) the petition may not be entertained is also not tenable in view of the fact that there is a breach of principle of natural justice by not providing opportunity of hearing to the petitioner though required as per the provisions of section 144B read with circular issued by the CBDT dated 06.09.2021 which is binding upon respondent-Assessing Officer in view of the settled legal position Hon’ble Supreme Court in case of Whirlpool Trade Marks, Mumbai And Others reported in (1998)8 SCC 1 . 11. This Court in similar facts in Special Civil Application No. 990 of 2023 has held as under: “9. Clause 4 of Instruction No. 20/2015 issued by the CBDT. reads as under: “4. The Board further desires that in all cases under scrutiny, where the Assessing Officer proposes to make additions or disallowances, the assessee would be given a fair opportunity to explain his position on the proposed additions/disallowances in accordance with the principle of natural justice. In this regard, the Assessing Officer shall issue an appropriate show cause notice duly indicating the reasons for the proposed additions/disallowances along with necessary evidences/reasons forming the basis of the same. Before passing the final order against the proposed additions/disallowances, due consideration shall be given to the submissions made by the assessee in response to the show cause notice.” 10. Similarly, the Instruction No. 3/2018 and 1/2018 provide for personal hearing in case of show-cause notice contemplating any adverse view issued by the Assessing Officer reads as under: “In cases where assessment proceedings being carried out through the ‘E Proceeding’ as per para 4 above, personal hearing/attendance may take place in following situation(s): I. where books of account have to be examined; II. where Assessing Officer invokes provisions of section 131 of the Act; III. where examination of witness is required to be made by the concerned assessee or the Department; IV. where show-cause notice contemplating any adverse view is issued by the Assessing Officer and assessee requests through their ‘E-filing’ account for personal hearing to explain the matter. However, details have to be uploaded on ITBA subsequently.” 11. where examination of witness is required to be made by the concerned assessee or the Department; IV. where show-cause notice contemplating any adverse view is issued by the Assessing Officer and assessee requests through their ‘E-filing’ account for personal hearing to explain the matter. However, details have to be uploaded on ITBA subsequently.” 11. Letter dated 11.07.2016 provides for the draft of the notice to be issued under section 143(2) of the Income Tax Act, 1961. Clause 4 thereof reads as under: “4. Specific questionnaire/show cause notice shall be sent giving you another opportunity in case any adverse view is contemplated.” 12. Circular No. 27/2019 dated 26.09.2019 is very crucial in the facts of the case as the said circular is applicable to the cases which are not covered by the E- assessment Scheme the said circular reads as under: “SECTION 143 OF THE INCOME-TAX ACT, 1961 - ASSESSMENT - GENERAL – CONDUCT OF ASSESSMENT PROCEEDINGS THROUGH 'BPROCEEDING' FACILITY DURING FINANCIAL YEAR 2018-29 CIRCULAR NO. 27/2019 (F.No. 225/249/2018- ITA.III] DATED 26.09.2019 The Central Board of Direct Taxes (‘Board’), in exercise of Its powers under section 119 of the Income-tax Act, 1961 (‘Act’) and in accordance with provision of section 2(23C) of the Act, hereby directs as under: (i) In all cases (other than the cases covered under the ‘e-Assessment scheme, 2019" notified by the Board), whey assessment is to be framed under section 143(3) of the Act during the financial year 2019-20, it is hereby directed that such assessment proceedings shall be conducted electronically subject to exceptions in para below. Consequently, assessees are required to produce/cause to produce their response/evidence to any notice/communication./show cause issued by the Assessing Officer electronically (unless specified otherwise) through their ‘E-filing’ account on the ‘E-filing’ portal. For smooth conduct of assessment proceedings through E-Proceeding.’ it is further directed that requisition of information in cases under ‘E- Proceeding’ should be sought after a careful scrutiny of case records. (ii) In following cases, where assessment is to be framed during the Finance Year 2019-20, “E-proceeding’ shall not be mandatory a. Where assessment is to be framed under section(s) 153A, 153C and 144 of the Act. In respect of assessments ty be framed under section 147 of the Act, any relaxation from e-proceeding due to the difficulties in migration of data from ITD to ITBA etc. In respect of assessments ty be framed under section 147 of the Act, any relaxation from e-proceeding due to the difficulties in migration of data from ITD to ITBA etc. shall be dealt as per clause (f) below; b. In set aside assessments; c. Assessments being framed in non-PAN cases; d. Cases where Income-tax return was filed in paper mode and the assessee concerned does not yet have an 'E- filing’ account; e. In all cases at stations connected through the VSAT or with limited capacity of bandwidth (list of such stations shall be specified by the Pr. DGIT (System)); f. In cases covered under para 1(i) above, the jurisdictional Pr. CIT/CIT, in extraordinary circumstances such as complexities of the case or administrative difficulties in conduct of assessment through ‘E-Proceeding’, can permit conduct of assessment proceedings through the conventional mode. It is hereby further directed that Pr.CIT/CIT is required to provide such relaxation only in extraordinary circumstances after examining the necessity for such relaxation and recording the reasons for Page 22 of 29 Downloaded on providing such relaxations. (iii) However, it is clarified that issue of notices and departmental communications in such cases shall be strictly governed by the guidelines issued by CBDT vide its Circular No.19/2019 dated 14-8-2019 regarding generation/allotment/quoting of Document Identification Number (DIN). (iv) In cases where assessment proceedings are being carried out through the ‘E-Proceeding’ as per para (i) above, personal hearing/attendance may take place in following situation(s): a. Where books of account have to be examined; b. Where Assessing Officer invokes provisions of section 131 of the Act; c. where examination of witness is required to be made by the assessee or the Department; d. Where a show cause notice contemplating any adverse view is issued by the Assessing Officer and assessee requests through their ‘E- filing’ account for personal hearing to explain the matter. However, the details pertaining to above shall be uploaded on ITBA subsequently. 2. This may be brought to the notice of all concerned for immediate compliance.” 13. However, the details pertaining to above shall be uploaded on ITBA subsequently. 2. This may be brought to the notice of all concerned for immediate compliance.” 13. Similarly, the Circular dated 06.09.2021 is also applicable to the cases which are not covered by the Faceless Assessment Scheme as per section 144B(1)/(2) of the Act and Clause B of the said circular reads as under: “B. The request for personal hearings shall generally be allowed to the assessee with the approval of Range Head, mainly after the assessee has filed written submission to the show cause notice. Personal hearing may be allowed to the assessee preferably through Video Conference. If Video Conference is not technically feasible, personal hearings may be conducted in a designated area in Income Tax Offices. The hearing proceedings may be recorded.” 14. Therefore, on harmonious reading of the above circulars, instructions and letters, it appears that since 2015 as per the desire of the Board, the Assessing Officer is mandatorily required to issue an appropriate show cause notice duly indicating the reasons for the proposed additions/ disallowance along with necessary evidence/reasons forming basis of the same before passing the final order. As the matter of fact, such position will continue even when the case is transferred to the respondent Assessing Officer under section 144B(8) of the Act as per Circular No. 27/2019 which was issued by the CBDT applicable to the cases where the assessment were framed not covered under the E- assessment notified by the Board. As per clause 4 of the Circular No. 27/2019 it is specifically provided that in case where assessment proceedings are being carried out through E-proceedings includes all the cases other than cases covered under the E-Assessment Scheme, 2019, personal hearing/attendance may take place where a show-cause notice contemplating any adverse view is issued by the Assessing Officer and the assessee requests through the E- filing account for personal hearing to explain the matter.” 12. Similarly, the contention raised on behalf of the petitioner that the jurisdictional officer has passed the impugned order without jurisdiction is also not tenable in view of the notings made in the order sheet in view of the fact that the assessment proceedings were conducted pursuant to the order passed under section 263 and therefore, the same is required to be conducted by jurisdictional Assessing Officer. 13. 13. In view of the foregoing reasons, the petition partly allowed and impugned assessment order dated 18.03.2024 is hereby quashed and set aside. The matter is remanded back to the respondent No.1 Assessing Officer to give opportunity of hearing to the petitioner either through video conference or through personal hearing in the designated area of the income tax office as per the para 2B of the Circular dated 06.09.2021 issued by the CBDT. 14. Such exercise shall be completed within twelve weeks from the date of receipt of copy of this order. Rule is made absolute to the aforesaid extent. No order as to costs.