2022 (11) TMI 1384 - HC - Income Tax

Reopening of assessment u/s 147 - new scheme u/s 148A - faceless assessment - Whether notice is wholly without jurisdiction as it has been issued in violation of the notification dated 29.03.2022, issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes? - HELD THAT - The submission proceeds that by the said notification, a scheme has been formulated whereunder issuance of notice u/s 148 has to be through automated allocation and in a faceless manner, whereas in the instant case, the aforesaid procedure has not been followed, rather the notice has been issued by a particular person and not in a face less manner. Respondent prays for and is allowed one month s time for filling counter affidavit. Two weeks thereafter is allowed to learned counsel for the petitioner to file rejoinder affidavit. List for admission/final disposal immediately after six weeks - Till the next date of listing, further proceedings pursuant to the impugned notice dated 29.07.2022 (Annexure-8) shall remain stayed.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 for being issued without jurisdiction and in violation of a notification regarding faceless assessment.

Analysis:
The judgment delivered by the High Court pertains to a challenge against a notice dated 29.07.2022 issued under Section 148 of the Income Tax Act, 1961. The petitioner, through counsel Mr. Prakul Khurana, argued that the notice was issued in violation of a notification issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes. The notification established a scheme for issuing notices under Section 148 in a faceless manner through automated allocation. However, in this case, the notice was not issued following the prescribed procedure and was not faceless, as it was issued by a specific individual. This non-compliance with the notification was the primary ground for challenging the jurisdiction of the notice.

The respondent, represented by Ms. Parinitoo Jain, accepted the notice on behalf of the sole respondent. The court granted one month to the respondent for filing a counter affidavit, and subsequently allowed two weeks to the petitioner's counsel for filing a rejoinder affidavit. The case was listed for admission or final disposal immediately after six weeks, to be heard along with another Civil Writ Petition. Notably, the court ordered a stay on any further proceedings based on the impugned notice until the next listing date, ensuring that no actions would be taken in response to the notice during this period.

In conclusion, the High Court's judgment addressed the challenge to the notice under Section 148 of the Income Tax Act, 1961, emphasizing the importance of adhering to the prescribed procedures for faceless assessment as outlined in the notification by the Ministry of Finance. The court's decision to stay further proceedings pending the resolution of the legal challenge demonstrates a cautious approach to ensure fairness and compliance with established protocols in tax matters.