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2024 (9) TMI 876 - HC - Income TaxFaceless assessment of income escaping assessment - validity of notice issued by the JAO as not in accordance w/sec 151A - non-compliance w/s 151A - HELD THAT - As decided in Hexaware Technology Ltd. 2024 (5) TMI 302 - BOMBAY HIGH COURT provisions of Section 151A of the IT Act had clearly brought a regime of faceless assessment. The Court held that it was not permissible for the Jurisdictional Assessing Officer to issue a notice u/s 148, as the same would amount to breach of the provisions of section 151A of the IT Act.it is apparent that the Respondent- Revenue has not complied with the Scheme notified by the Central Government pursuant to Section 151A (2). The Scheme has also been tabled in Parliament and is in the character of subordinate legislation, which governs the conduct of proceedings under Section 148A as well as Section 148 of the Act. There is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice u/s 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. In view of the explicit declaration of the law in Hexaware, the grievance of the Petitioner-Assessee insofar as it relates to an invalid issuance of a notice is sustainable and consequently, the very manner in which the proceedings have been initiated, vitiates the proceedings. As the JAO had no jurisdiction to issue the impugned notice, the Writ Petition is accordingly allowed in terms of prayer clause (a).
Issues:
1. Validity of notice issued under Section 148 of the Income Tax Act, 1961. 2. Compliance with the provisions of Section 151A and the faceless mechanism introduced by the Central Government. 3. Jurisdiction of the Assessing Officer in issuing notices under Section 148 of the Act. 4. Applicability of the Scheme framed by the CBDT and the Notification dated 29 March 2022. 5. Effect of non-compliance with Section 151A on the validity of the notice and subsequent proceedings. Detailed Analysis: 1. The writ petition challenges a notice dated 23 March, 2023, issued under Section 148 of the Income Tax Act, 1961, for reassessment of returns filed by the petitioner for the Assessment Year 2019-20. The petitioner argues that the notice, along with prior notices under Section 148A(b) and 148A(d), were issued by the Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO) as required by Section 151A of the Act. 2. The Central Government introduced a faceless mechanism through a Notification dated 29 March 2022, mandating compliance with Section 151A for notices issued under Section 148. The Division Bench in the case of Hexaware Technologies Limited vs. Assistant Commissioner of Income Tax clarified that the FAO, not the JAO, has the exclusive jurisdiction to issue notices under Section 148 in a faceless manner. 3. The Court emphasized that the Scheme framed by the CBDT, applicable to both assessment and issuance of notices under Section 148, cannot be selectively applied. Non-compliance with the faceless mechanism outlined in Section 151A renders the notice invalid, as it prejudices the assessee by deviating from the statutory procedure. 4. The judgment in Nainraj Enterprises Pvt. Ltd. and Kairos Properties Pvt. Ltd. further supports the requirement for FAO issuance of notices under Section 148 in accordance with the Scheme notified by the Central Government. The Court rejected arguments regarding central charges exempting the case from the Scheme's applicability, emphasizing adherence to the statutory provisions. 5. In the case of Abhin Anilkumar Shah vs. Income Tax Officer, the Court reiterated that exceptions related to central charges do not exclude the application of Section 151A and the faceless mechanism. The writ petition was allowed, quashing the impugned notices issued under Section 148 due to non-compliance with Section 151A. The judgment clarifies that the decision is based solely on non-compliance and does not address other issues raised in the petition.
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