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TMI Blog2024 (9) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... and Section 148 of the Act so as to fall within the ambit of the said order, as it is only the assessment proceedings which would be required to be conducted as an exception to the faceless mechanism. We have clearly observed that the order dated 31 March, 2021 cannot be read to mean that it would cover the proceedings under Section 148A and Section 148 of the Act so as to fall within the ambit of the said order, as it was only the assessment proceedings which were required to be undertaken as an exception to the faceless mechanism, under the said order. In other words, we had clearly held that the faceless mechanism would also be applicable to cases of Central Charges and International Taxation charges and it is only the assessment proceedings which would be required to be undertaken outside the faceless mechanism. We have thus reached a considered conclusion that the mandatory faceless procedure for issuance of notice under section 148 of the Act falling within the purview of the scheme notified by the Central Government dated 29 March, 2022 would not exclude the Central charges and International taxation charges from the application of the faceless mechanism as notified under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d notice dated 31 March, 2021 issued under Section 148A (b) as also the order under section 148A (d) leading to the issuance of an impugned notice dated 19 April, 2024 under section 148 of the Act are in the teeth of the provisions of section 151A read with the provisions of section 144B and the scheme notified by the Central Government vide a Notification dated 29 March, 2022 under section 151A of the Act whereunder the respondents are under a mandate to follow the faceless mechanism, in resorting to any procedure/action under section 148A as also to issue notice under section 148 of the Act. It is submitted that the position in law being asserted by the petitioner is no more res integra in view of the decision rendered by a co-ordinate Bench of this Court in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax 4 Ors. (2024) 464 ITR 430 ( Hexaware ), wherein the Court considering the effect of the provisions of section 151A read with provisions of section 144B as also considering the provisions of section 148A and 148 of the Act has held that the Jurisdictional Assessing Officer(JAO) would not have jurisdiction to resort to an action under section 148A, as also t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself contemplates formulation of Scheme for both assessment, reassessment or recomputation under Section 147 as well as for issuance of notice under Section 148 of the Act. Therefore, the Scheme framed by the CBDT, which covers both the aforesaid aspect of the provisions of Section 151A of the Act cannot be said to be applicable only for one aspect, i.e., proceedings post the issue of notice under Section 148 of the Act being assessment, reassessment or recomputation under Section 147 of the Act and inapplicable to the issuance of notice under Section 148 of the Act. The Scheme is clearly applicable for issuance of notice under Section 148 of the Act and accordingly, it is only the FAO which can issue the notice under Section 148 of the Act and not the JAO. The argument advanced by respondent would render clause 3(b) of the Scheme otiose and to be ignored or contravened, as according to respondent, even though the Scheme specifically provides for issuance of notice under Section 148 of the Act in a faceless manner, no notice is required to be issued under Section 148 of the Act in a faceless manner. In such a situation, not only clause 3(b) but also the first two lines below cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we were persuaded to ponder whether our observations in Paragraphs 10 and 11 in CapitalG LP would require a reconsideration, we passed the following order:- 1. List this petition on 19 August 2024 along with Writ Petition (L) 15289 of 2024 (Capital GLP Vs. Assistant Commissioner of Income Tax 2(1) (1), Mumbai and Ors.), wherein we intend to reconsider our observations in paragraph Nos. 11 and 12. 5. On the above backdrop, today we have heard learned counsel for the parties. We also requested Mr. Mistry, learned senior counsel to assist the Court to which he fairly agreed. He has made elaborate submissions. 6. Considering the submissions as advanced before us as to whether our observations made in paragraphs 11 12 in CapitalG LP (supra) would require reconsideration, we are now of the clear opinion that such observations do not require any reconsideration. The following discussion would aid our conclusion. 7. At the outset, we may note as to what was held in our decision in CapitalG LP, in the context of a similar objection which was raised on behalf of the revenue, referring to an order issued by the CBDT under sub-section (2) of Section 144B dated 31 March, 2021 and in regard to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 143 (2) of the Act, has been issued by the Assessing Officer or the Prescribed Income-tax Authority, as the case may be; c. where the assessee has not furnished her/his return of income in response to a notice issued under section 142 (1) of the Act by the Assessing officer; d. where the assessee has not furnished her/his return of income under section 148 (1) of the Act and a notice under section 142 (1) of the Act has been issued by the Assessing Officer. 2. This order shall come into force with effect from the 1st day of April, 2021. Sd/- (Gulzar Ahmad Wani) JCIT(OSD)(ITA-1) 11. From a bare reading of the aforesaid order, we are not inclined to accept the case of respondents that the provisions of Section 144B read with the provisions of Section 151A (1) would not be applicable to the case in hand. The reason being the challenge in the present proceedings is to a notice issued under section 148 of the Act and the prior proceedings as initiated against the petitioner under section 148A (a) (b). We cannot read the order to mean that it would cover the proceedings under Section 148A and Section 148 of the Act so as to fall within the ambit of the said order, as it is only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act would also apply under the Scheme. Further the exceptions provided in sub-section (7) and (8) of Section 144B of the Act would also be applicable to the Scheme. [Emphasis Supplied] 8. We have clearly observed that the order dated 31 March, 2021 cannot be read to mean that it would cover the proceedings under Section 148A and Section 148 of the Act so as to fall within the ambit of the said order, as it was only the assessment proceedings which were required to be undertaken as an exception to the faceless mechanism, under the said order. In other words, we had clearly held that the faceless mechanism would also be applicable to cases of Central Charges and International Taxation charges and it is only the assessment proceedings which would be required to be undertaken outside the faceless mechanism. 9. However, in the present case, Ms. Shilpa Goel, learned counsel for the revenue referred to a subsequent order dated 6 September, 2021 issued by the CBDT under section 119 of the Act to submit that such order reiterates an exception from the applicability of the provisions of section 144B of the Act (i.e. for orders to be passed by the National Faceless Assessment Centre) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied) 10. Thus, from the reading of aforesaid order dated 6 September, 2021, it is clear that the CBDT has referred to the order dated 31 March, 2021 (supra) issued in relation to the assessment orders in cases assigned to Central Charges and assessment orders in cases assigned to International Tax Charges, being not required to be passed under the National Faceless Assessment Centre (NaFAC). However, what has been done by such order is to modify the order dated 31 March, 2021 to the extent of what is set out in paragraph 3 thereof, namely, that in addition to such exceptions to the applicability of the faceless mechanism to assessment orders in relation to Central Charges and International Tax Charges, an additional exception was added, namely, to the assessment order in cases where pendency could not be created on ITBA because of technical reasons or cases not having a PAN, as the case may be. Thus, the fact remains that as to what was provided by order dated 31 March, 2021 (supra) in relation to non-applicability of the faceless mechanism to assessment orders in cases assigned to Central Charges and International Tax Charges, the position under order dated 31 March, 2021 remaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by the Board as referred to in section 148 of the Act for issuance of notice, and in a faceless manner, to the extent provided in section 144B of the Act with reference to making assessment or reassessment of total income or loss of assessee. [Notification No. 18/2022/F. No. 370142/16/2022-TPL(Part1)] SHEFALI SINGH, Under Secy. 12. Having heard the learned counsel for the petitioner and Mr. Mistry, the learned amicus, it is clear to us that although the objection of Ms. Goel at the first blush appeared to be attractive, when we first heard the matter on earlier occasion, however on a deeper scrutiny, such objection needs to fail. Ms Goel s contention that the category of cases as notified under order(s) dated 31 March, 2021 and 6 September, 2021 issued under section 119 of the Act providing for exclusion of cases assigned to the central and international charges from the applicability of Section 144B of the Act is concerned, certainly cannot be accepted to be the correct position in law. 13. Such contention of Ms Goel needs to fail for more than one reason. Firstly, the order dated 31 March, 2021 issued under sub-section (2) of Section 144B of I.T. Act and order dated 6 Septem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 148A of the Act. The provisions is intended with an object of achieving efficiency, transparency and accountability inter alia by eliminating the interface between the income tax authority, optimizing utilization of the resources through economies of scale and functional specialization, and by introducing a team based assessment, reassessment, recomputation or issuance or sanction of notice with dynamic jurisdiction, as set out in clauses (a), (b) and (c) of sub-section 151A of the Act. 15. Thus, on a bare reading of section 151A as it stands, read with the scheme notified thereunder, we are of the clear opinion that the observations as contained in Paragraphs 10 and 11 of our decision in CapitalG LP do not require any reconsideration. 16. In the above context, Mr. Mistry has also drawn our attention to the decision of the Division Bench of the High Court of Telangana in Sri Venkataramana Reddy Patloola Vs. Deputy Commissioner of Income Tax, Circle 1(1), Hyderabad Ors. 2024 SCC OnLine TS 1792 to contend that such decision fortifies the view taken by us in CapitalG LP (supra) to submit that such decision takes a similar view, when an identical issue had fallen for considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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