JUDGMENT : BHARGAV D. KARIA, J. 1. Heard learned advocate Mr. Deepak R. Shah for the petitioner and learned senior standing counsel Mr. Karan Sanghani for the respondent. Having regard to the controversy involved in this matter, which is in a narrow compass, with the consent of learned advocates for the respective parties, the matter is taken up for hearing. 2. Rule returnable forthwith. Learned advocate Mr. Sanghani waives service of notice of rule. 3. This Court passed the following order on 29.11.2021: “1. The petitioner is a partnership firm carrying on the business of processing and trading in tobacco. The case of the petitioner was selected for scrutiny on 22.09.2019. After issuance of notice and calling for the particulars, a draft assessment order was proposed by the respondent for making addition under Section 68 of the Income Tax Act. A request also had been made by the petitioner for providing Video Conferencing link by the petitioner. The notice and draft assessment order proposing the variations have been issued, which have been replied to by the petitioner. 1.1 It is a grievance of the petitioner that the respondent has passed the order adding the receipt of loans under Section 68 of the Act in complete disregard to the documents substantiated by the petitioner therein proceedings. Assessment order has been passed on 28.09.2021 and that has aggrieved the petitioner, who has approached this Court with following prayers: “6. The petitioner accordingly prays that this Hon’ble Court may be pleased to issue a writ of Certiorari or any other writ in the nature of certiorari or a writ of Mandamus or any other writ in the nature of Mandamus: (a) To quash and set aside the impugned order dated 28.09.2021 and the demand notice at “Annexure-I colly.” (b) Pending admission and final hearing, stay the implementation of the impugned order dated 28-09- 2021 and the demand notice at “Annexure-I colly.” 2. We have heard the learned Advocate Mr. Tej Shah, who depending on the pleadings & materials on record has urged that once new addition of acceptance of the loan to the tune of Rs. 2.6 Crores (rounded off) had been requested by the petitioner, non-recognition of the testimonials which had been furnished along with the proceedings of hearing, would necessitate interference from this Court. Tej Shah, who depending on the pleadings & materials on record has urged that once new addition of acceptance of the loan to the tune of Rs. 2.6 Crores (rounded off) had been requested by the petitioner, non-recognition of the testimonials which had been furnished along with the proceedings of hearing, would necessitate interference from this Court. He has relied upon the decision of this Court rendered in Special Civil Application No. 7662 of 2021 and also the decision of the Bombay High Court in the case of Mantra Industries Ltd. Vs. National Faceless Assessment Center (NFAC Or NeAC), (2021) 131 taxmann.com 165 (Bombay). 3. Notice for final disposal returnable on 14.12.2021. 3.1 Interim relief in terms of Para 6(b) is granted till returnable date.” 4. The brief facts of the case are as under: The petitioner, a partnership firm, is engaged in the business of manufacture and sale of Tobacco. The petitioner filed the Return of Income for the Assessment Year 2018-19 on 02.10.2018 declaring income of Rs. 4,10,940/-. 4.1 The case of the petitioner was selected for scrutiny and Notice u/s. 142(1) of the Income Tax Act, 1961 (for short “the Act”) was issued on 17.01.2020 seeking various details, which was followed by further Notice dated 20.01.2021. The petitioner filed reply dated 01.02.2021 in response to the Notice. 4.2 The petitioner, thereafter, received Notice dated 19.03.2021 in the form of a Draft Assessment Order proposing to make an addition of Rs. 1,16,98,952/- u/s. 68 of the Act on the ground that the petitioner had repaid the loan during the year under consideration. 4.3 The petitioner, by reply dated 23.03.2021, submitted documents in respect of each of the deposits/loan accounts where fresh funds were received/repaid, which contained details of (i) confirmation with PAN No. (ii) copy of ledger account from the books (iii) copy of bank statements of respective parties from where the funds have been received and where the payments are credited and (iv) copy of ITR for A.Y. 2018-19 in cases where the respective person has filed the Return of Income. 4.4 The petitioner was also given an opportunity of hearing through Video Conferencing by the respondent Assessing Officer. The petitioner filed further reply on 08.04.2021 during the course of Video Conferencing. 4.4 The petitioner was also given an opportunity of hearing through Video Conferencing by the respondent Assessing Officer. The petitioner filed further reply on 08.04.2021 during the course of Video Conferencing. 4.5 The respondent, thereafter, issued another show-cause Notice dated 15.04.2021 to show cause as to why assessment should not be completed as per the Draft Assessment Order. Thereafter, Notice dated 20.08.2021 was issued to show cause as to why proposed variation of Rs. 3,09,65,450/- should not be made, comprising of loan amount paid of Rs. 1,02,72,952/- from the unsecured loan and the amount received of Rs. 2,06,92,496/-. The petitioner filed reply dated 16.09.2021 wherein it was stated that all details with regard to receipt of loans during the year under consideration have been provided along with the reply dated 23.03.2021 which contained the identity, genuineness and creditworthiness of the persons who had advanced the unsecured loans to the petitioner. 4.6 During the course of proceedings, the petitioner had also filed an application dated 07.09.2021 u/s. 144A of the Act before the JCIT, Vadodara for a direction to the Assessing Officer for completing the assessment. However, the said application was not entertained and the respondent Assessing Officer passed an assessment order on 28.09.2021 by making an addition of Rs. 2,06,92,496/-. In paragraphs 3 to 5 of the order, it was observed as under: “3. Further, the assessee has furnished the submission on 08/04/2021 stating that “....the firm has also received loan funds of Rs. 2,06,92,496/- and the proposed addition of Rs. 1,16,98,852/- is much less than the funds received. The funds received as loan are already accepted to be genuine by your honor and based on this fact, the source fully stands explained.” On perusal of the documents furnished by the assessee, it is noticed that the assessee has received unsecured loans during the year amounting to Rs. 2,06,92,496/- and no substantial document is furnished to prove the genuineness and creditworthiness of the unsecured loans received. 4. As per the principles of natural justice, a show cause notice incorporating draft assessment order was issued to assessee on 20.08.2021 wherein it was requested to submit the reply on or before 25/08/2021. In response to this, the assessee has not furnished any documentary evidences and requested for a video conference which was scheduled on 30/08/2021. 4. As per the principles of natural justice, a show cause notice incorporating draft assessment order was issued to assessee on 20.08.2021 wherein it was requested to submit the reply on or before 25/08/2021. In response to this, the assessee has not furnished any documentary evidences and requested for a video conference which was scheduled on 30/08/2021. The assessee did not attend the video conference due to technical reasons as stated by the assessee vide response dated 04/09/2021. Further, the assessee requested for rescheduling the video conference and adjournment of 5 days for submitting the response to the show cause notice. On assessee’s request video conference was re-scheduled on 16/09/2021, which was conducted successfully. In the video conference, the AR of the assessee has attended and discussed the same submission which was already made earlier. 5. In light of the submissions furnished by the assessee, it is noticed that, the assessee has received unsecured loan from 14 different parties amounting to Rs. 2,06,92,496/-. During the financial year, the assessee has filed his return of income declaring total income of Rs. 4,10,940/- and in earlier financial year i.e. 2016-17, it was declared at Rs. 39,738/-. The income declared by the assessee does not commensurate with the amount of unsecured loans squared-off during the year. On this scenario, from the documents available on record and the submission furnished by the assessee, it is observed that the assessee is receiving unsecured loans and making repayment of unsecured loans. From this, it is observed that the assessee is circulating the money between different parties. Further, the assessee was unable to provide the documentary evidences to substantiate the genuineness & creditworthiness of the parties from which the unsecured loan is taken during the financial year amounting to Rs. 2,06,92,496/-.” 4.7 During the course of hearing, the jurisdictional officer was joined as party respondent by order dated 21.12.2021 passed by this Court. 5. During the course of further hearing of this petition, learned advocate for the petitioner furnished paper-book of the documents submitted during the assessment proceedings, which contains the documents for loan/deposits submitted during the assessment proceedings, the transcript of Video Conference hearing and the order dated 24.11.2022 of withdrawal of appeal filed by the petitioner before the CIT (Appeals) challenging the impugned assessment order. 6. Learned advocate Mr. 6. Learned advocate Mr. Shah for the petitioner submitted that the respondent Assessing Officer, without considering the documents furnished by the petitioner during the course of assessment proceedings and those which were pointed out during the course of Video Conference hearing, has not given any findings and by a cursory observation that no substantial documents are furnished by the petitioner to prove the genuineness or creditworthiness of the unsecured loans received by the petitioner during the year, has made an addition u/s. 68 of the Act. It was further submitted that the Assessing Officer has changed the entire basis of making addition by observing that the assesse is circulating money between different parties without there being any prima facie evidence on record. It was, therefore, submitted that the impugned order passed by the Assessing Officer making huge addition of Rs. 2,06,92,496/- by ignoring the documents placed on record, has resulted into violation of the principles of natural justice and the petitioner has suffered severe hardship because of such huge addition and hence, the impugned assessment order is required to be quashed and set aside. 7. On the other hand, learned advocate Mr. Sanghani for the respondent Assessing Officer submitted that the petitioner has availed the alternative efficacious remedy by preferring an appeal before the CIT (Appeals), which was withdrawn by the petitioner during the pendency of this petition and therefore, this petition does not deserve to be entertained. It was submitted that the petitioner was provided with ample opportunities of hearing and after taking into consideration the replies filed by the petitioner from time to time, the Assessing Officer has passed the impugned assessment order. It was submitted that if the Assessing Officer has committed any error by not considering the reply, the same ought to have been agitated by the petitioner before the CIT (Appeals) and the non-consideration of reply cannot be treated as a breach of natural justice so as to invoke the extra-ordinary jurisdiction under Article 227 of the Constitution of India. 8. In support of his submissions, learned advocate Mr. Sanghani referred to and relied upon the following averments made in the affidavit in reply filed on behalf of the respondent Assessing Officer: “7. With reference to Paras 3.3 and 3.4, the respondent denies each and every allegation, averment and contention raised therein. 8. In support of his submissions, learned advocate Mr. Sanghani referred to and relied upon the following averments made in the affidavit in reply filed on behalf of the respondent Assessing Officer: “7. With reference to Paras 3.3 and 3.4, the respondent denies each and every allegation, averment and contention raised therein. It is submitted that in the present case, in show cause notice dated 19.03.2021, the Faceless Assessing Officer (FAO) has proposed the addition of Rs. 1,16,98,952/- being the unsecured loans paid off during the year which was challenged by the assessee in its reply dated 23.03.2021. Later, another show cause notice dated 06.04.2021 was issued for addition u/s. 68, in response to the same the assessee submitted reply dated 08.04.2021, key points of which are reproduced below: As submitted in reply to show cause, the firm has also received loan funds of Rs. 2,06,92,496/- and the proposed addition of Rs. 1,16,98,852/- is much less than the funds received. The funds received as loan are already accepted to be genuine by your honor and based on this fact, the source fully stands explained. Further, the proposed addition of repayment cannot be made u/s. 68 of the Act since the provisions of Sec. 68 deals with sum found credited and not sum found debited. Under such circumstances, it is important for the assessee to understand as to how your honor is proposing to invoke provisions of Sec.68 for repayment of loans. It is submitted that in the show cause dated 20.08.2021, the Faceless Assessing Officer (FAO) proposed addition on account of loan fund received of Rs. 2,06,92,496/- and unsecured loans paid off to Sh. Shroff Ranchodbhai Zaveribhai Patel at Rs. 1,02,50,000/- and Ms. Jeevabehen Nathabhai Patel at Rs. 22,952/- totalling Rs. 1,02,72,952/-. Thus, total addition of Rs. 3,09,65,448/-, is proposed as ‘Unexplained Cash Credits’ u/s. 68 of the Income Tax Act, 1961 in absence of authenticity, genuineness & credit worthiness proved by the assessee. Further, the assessee replied the show cause notice vide letter dated 16.09.2021 where it challenged both the additions, most notably addition u/s. 68 on account of repayment of loan. The second limb of the objection was accepted by the Faceless Assessing Officer (FAO), as evident from the final order passed where the Faceless Assessing Officer (FAO) has restricted the addition to Rs. 2,06,92,496/-. The second limb of the objection was accepted by the Faceless Assessing Officer (FAO), as evident from the final order passed where the Faceless Assessing Officer (FAO) has restricted the addition to Rs. 2,06,92,496/-. It is submitted that without going into the merit of the case, aforesaid sequence of the show cause notices and replies of the assessee shows that there is no violation of any provision of the Act as stated by the assessee. 8. With reference to Para 3.6, the respondent denies each and every allegation, averment and contention raised therein. It is further submitted that in the present case, as per the order sheet there is only reference for the application u/s. 144A on 07.09.2021 (Page 15 of order sheet) with the following remark: Sir, We have made an application u/s. 144A to Jt. Commissioner of Income Tax. We request your Honour to kindly not to pass any order till the disposal of application u/s 144A of the Act. For your reference we herewith attached copy of application submitted to Jt. Commissioner of Income Tax. It is submitted that the remark clearly shows that the assessee has requested the Faceless Assessing Officer not to pass order till the application is disposed off by the JCIT. There is no request to forward the same to the JCIT. Therefore, the allegation is totally wrong. It is further submitted that although the assessment under consideration was pending with NFAC but the assessee filed application u/s. 144A on 07.09.2021 to the jurisdictional range office i.e. Addl. CIT Range 1(1), Vadodara through speed post. The, Addl. CIT Range 1(1), Vadodara vide letter dated 15.09.2021, has categorically stated that his office is not the competent authority in this matter and accordingly advised him to make correspondence with the NFAC, Delhi. Further, the assessee raised query to the jurisdictional range head office, for non-awareness regarding the procedure for filing 144A application to NFAC. This query was responded vide letter dated 20.09.2021. It is submitted that as the data is available with NFAC (Delhi), the details regarding disposal of the application u/s 144A has been sought from them vide letter dated 12.01.2022 after getting approval from Pr.CIT-1 Vadodara. This query was responded vide letter dated 20.09.2021. It is submitted that as the data is available with NFAC (Delhi), the details regarding disposal of the application u/s 144A has been sought from them vide letter dated 12.01.2022 after getting approval from Pr.CIT-1 Vadodara. In response to which vide email dated 31.01.2022, ACIT, NaFAC-1(1)(1), Delhi submitted that: It to be noted that provisions of section 144A of the Income-tax Act, 1961 is not applicable to Faceless Assessment because Faceless Assessment is completed by a Unit consisting of Addl/Jt.CIT and DCIT/ACIT/ITO simultaneously functioning as Assessing Officers. As the assessment is being completed by Addl./Jt. CIT concurrently with the DCIT/ACIT/ITO there is no requirement of invoking the provisions of section 144A of the Act. The situation is akin to an assessment being completed by the Addl Jt. CIT in pre-faceless assessment times ia which section 144A was not applicable. Moreover, the Faceless Assessment Scheme (S.O 3265(E) dated 12.09.2019) which is the pre-cursor of Faceless Assessment provisions specifically excepted/modified the provisions of section 144A of the Act in respect of Faceless Assessments. Relevant extract of the notification is reproduced below: S.O. 3265(E) dated 12th September, 2019. 1. The provisions of clause (7A) of section 2, section 92CA, section 120, section 124, section 127, section 129, section 131, section 133, section 133A, section 133C, section 134, section 142, section 142A, section 143, section 144A, section 144BA section 144C and Chapter XXI of the Act shall apply to the assessment made in accordance with the said Scheme subject to the following exceptions, modifications and adaptations, namely: In view of the above, it is submitted that section 144A of the Income-tax Act, 1961 is not applicable to Faceless Assessment. It is submitted that in view of the aforesaid reply received, it is clear that the provisions of section 144A are not applicable in case of the assessment proceedings under Faceless regime.” 9. It is submitted that in view of the aforesaid reply received, it is clear that the provisions of section 144A are not applicable in case of the assessment proceedings under Faceless regime.” 9. Having heard the learned advocates for the respective parties and considering the facts of the case emerging from the documents placed on record, it appears that the petitioner has furnished all the relevant documents containing the copy of the ledger account from its audited books, confirmation of respective depositor with PAN Number, copy of its bank statements, copy of the ITR filed by the respective depositors, copy of the bank statements of respective depositors from where the funds were provided, which is evident from the paper-book filed by the petitioner in this petition as it contains the documents submitted during the assessment proceedings. It is pertinent to note that no dispute has been raised by the respondent with regard to submission of the aforesaid documents by the petitioner during the assessment proceedings. 10. In view of the above, the observations made by the Assessing Officer in the impugned order, more particularly, in paragraph Nos.3 and 5 reproduced hereinabove, are nothing but vague observations and are contrary to the facts on record. The Assessing Officer has, without any reference to any of the documents placed on record, observed that “...no substantial document is furnished to prove the genuineness and creditworthiness of the unsecured loans received.” Such observation made by the Assessing Officer, without reference to the documents placed on record or without doing any analysis, is nothing but a breach of the principles of natural justice, as the documents filed by the petitioner have been ignored. The Assessing Officer was required to consider the identity and creditworthiness of the depositors on the basis of the documents placed on record and by adopting further inquiry, if the Assessing Officer was not satisfied by such evidence. Moreover, in the facts of the case, the Assessing Officer has made observations which, in turn, are different from the record. 11. In paragraph 5 of the order, the Assessing Officer has observed that “From this, it is observed that the assessee is circulating the money between different parties. Further, the assessee was unable to provide the documentary evidences to substantiate the genuineness and creditworthiness of the parties from which the unsecured loan is taken during the financial year amounting to Rs. In paragraph 5 of the order, the Assessing Officer has observed that “From this, it is observed that the assessee is circulating the money between different parties. Further, the assessee was unable to provide the documentary evidences to substantiate the genuineness and creditworthiness of the parties from which the unsecured loan is taken during the financial year amounting to Rs. 2,06,92,496/-.” The above observations are also contrary to the documents placed on record as the Assessing Officer has not referred to any of the documents which are forming part of the paper-book placed before us. 12. We are conscious about the settled legal position that extra-ordinary jurisdiction under Article 227 of the Constitution of India is required to be exercised sparingly and a self-restraint is required to be maintained on the entertainment of a writ challenging the orders where alternative efficacious remedy is available. However, in the gross facts of the present case, we are constrained to exercise our extra-ordinary jurisdiction as the Assessing Officer has not considered the documents placed on record and without referring to the same, has made vague observations, which are not tenable in the eyes of law and therefore, we are left with no other option but to entertain this petition in the facts of the case. In view of the aforesaid undisputed facts, this Court is of the view that the impugned assessment order has been passed without considering the documents placed on record and therefore, the same is not tenable in the eyes of law. 13. In view of the foregoing reasons, the impugned assessment order dated 28.09.2021 is quashed and set aside. The matter is remanded to the Assessing Officer to consider the documents filed during the assessment proceedings and to pass a fresh assessment order, after considering the replies and documents in detail, within a period of Twelve Weeks from the date of receipt of a copy of this order. Rule is made absolute to the above extent with no order as to costs.