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TMI Blog2024 (9) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... g Counsel for Income Tax Department are of no assistance. Taxpayer is nowhere distinguished between NRIs and Indian Citizens. The notice issued under Section 148 must comply with the requirement of the Scheme whether or not the Taxpayer is NRI/Indian Citizen. Thus, the second limb of argument of the learned Senior Standing Counsel for Income Tax Department deserves to be rejected. In interpreting a section in a taxing statute, according to LORD SIMONDS, the question is not at what transaction the section is according to some alleged general purpose aimed, but what transaction its language according to its natural meaning fairly and squarely hits. LORD SIMONDS call this the one and only proper test . This principle is followed by the Indian Supreme Court in catena of judgments. Thus, in our view, no such exemption from faceless procedure can be read by combined reading of aforesaid provisions for the purpose of issuance of notice u/s 148 of the Act. Thus, it is clear that the respondents have erred in not following the mandatory faceless procedure as prescribed in the scheme dated 29.03.2022. Since notices under Section 148 of the Act were not issued in a faceless manner, the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nner. A conjoint reading of Section 151A of the Act and scheme dated 29.03.2022 makes it crystal clear that for the purpose of issuance of notice under Section 148 of the Act, the respondents are bound to follow the prescribed faceless procedure. Admittedly, in the instant cases, the show cause notices were issued by a faced authority, and for this reason alone, the notices run contrary to the mandatory procedure prescribed in the notification dated 29.03.2022. In support of above submissions, the learned counsel for the petitioners placed reliance on a judgment of this Court in Kankanala Ravindra Reddy v. Income-tax Officer (2023) 156 taxmann.com 178 (Telangana) . Reference is also made on a recent Division Bench judgment of Bombay High Court in the case of Hexaware Technologies Ltd. v. Assistant Commissioner of Income-Tax (2024) 464 ITR 430 (Bom) . 7. It is contended that Bombay High Court held that scheme and Section 144B do not provide any exemption to the revenue so far issuance of notice under Section 148 is concern, the exemption may be in relation to assessment and reassessment. 8. Per contra, Sri Vijhay K.Punna, learned Senior Standing Counsel for Income Tax Department, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enquiries or issuance of show-cause notice or passing of order under section 148A or sanction for issue of such notice under section 151, so as to impart greater efficiency, transparency and accountability by (a) eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible; (b) optimising utilisation of the resources through economies of scale and functional specialisation; (c) introducing a team-based assessment, reassessment, recomputation or issuance or sanction of notice with dynamic jurisdiction. (2) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification: Provided that no direction shall be issued after the 31st day of March, 2022. (3) Every notification issued under sub-section (1) and subsection (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament. (Emphasis Supplied) 12. Section 151A of the Act is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant portions of the same. Section 144B(2) of the Income Tax Act, 1961 144B. Faceless Assessment: (1) (2) The faceless assessment under sub-section (1) shall be made in respect of such territorial area, or persons or class of persons, or incomes or class of incomes, or cases or class of cases, as may be specified by the Board. (Emphasis Supplied) CBDT s Order dated 06.09.2021: F.No.187/3/2020-ITA-I Government of India Ministry of Finance Department of Revenue (Central Board of Direct Taxes) ***** North Block, New Delhi Dated, the 6th September, 2021. ORDER Subject:- Order under section 119 of the Income-tax Act, 1961 (the Act) providing exclusions to section 144B of the Act. The Faceless Assessment Scheme, 2019 (the Scheme) has been incorporated in the Act vide the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Section 144B of the Act pertaining to Faceless Assessment has been inserted by the said amendment w.e.f. 01.04.2021. 2. The Central Board of Direct Taxes vide Order F.No.187/3/2020-ITA-I dated 13th August, 2020 (the Order) read with order under section 119 of the Act regarding mutatis mutandis application of Orders, Circulars etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expression to the extent provided in Section 144B of the Act does not deal with the aspect of issuance of notice under Section 148 of the Act. 19. As noticed, learned Senior Standing Counsel for Income Tax Department has taken a diametrically opposite stand by contending that the said expression, indeed, covers the issuance of notice under Section 148 of the Act. His contention was that issuance of notice under Section 148 of the Act was also part of assessment procedure. 20. In the considered opinion of this Court, clause 3(b) of the notification dated 29.03.2022, in specific, deals with issuance of notice under Section 148 of the Act. For that purpose, the notification seeks to apply e-assessment of income escaping assessment scheme, 2022. A microscopic reading of clause 3(b) shows that its only literal interpretation could be that issuance of notice under Section 148 of the Act is squarely covered under the scheme, and for the purpose of issuance of notice, the faceless procedure must be followed. The expression to the extent provided in Section 144B of the Act in our judgment does not deal with issuance of notice under Section 148. The said expression is applicable with refere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 144B of the Act and order of CBDT dated 06.09.2021 give exemption from following the mandatory faceless procedure only in relation to passing of assessment orders in cases of central charges and international tax charges. Any other interpretation would amount to doing violence with the language employed in the scheme/notification dated 29.03.2022, Section 144B(2) of the Act and order dated 06.09.2021. Since in our view, the plain and unambiguous language used in the scheme and order dated 06.09.2021 shows that the notice under Section 148 does not fall within the exception , the judgments cited by the learned Senior Standing Counsel for Income Tax Department are of no assistance. The Taxpayer is nowhere distinguished between NRIs and Indian Citizens. The notice issued under Section 148 must comply with the requirement of the Scheme whether or not the Taxpayer is NRI/Indian Citizen. Thus, the second limb of argument of the learned Senior Standing Counsel for Income Tax Department deserves to be rejected. 25. Pertinently, this Court in Kankanala Ravindra Reddy (supra), held as under: 25. A plain reading of the aforesaid two notifications issued by the Central Board of Direct Taxe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... makes the whole Scheme otiose. If clause 3(b) of the Scheme is not applicable, then only clause 3(a) of the Scheme remains. What is covered in clause 3(a) of the Scheme is already provided in Section 144B(1) of the Act, which Section provides for faceless assessment, and covers assessment, reassessment or recomputation under Section 147 of the Act. Therefore, if Revenue's arguments are to be accepted, there is no purpose of framing a Scheme only for clause 3(a) which is in any event already covered under faceless assessment regime in Section 144B of the Act. The argument of respondent, therefore, renders the whole Scheme redundant. An argument which renders the whole Scheme otiose cannot be accepted as correct interpretation of the Scheme. The phrase to the extent provided in Section 144B of the Act in the Scheme is with reference to only making assessment or reassessment or total income or loss of assessee. Therefore, for the purposes of making assessment or reassessment, the provisions of Section 144B of the Act would be applicable as no such manner for reassessment is separately provided in the Scheme. For issuing notice, the term to the extent provided in Section 144B of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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