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TMI Blog2024 (12) TMI 1179X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellate Authority namely the National Faceless Assessment Center. It should be noted that both the instructions in clear terms envisaged that the Local Committees should not be treated as alternative forum of disputes resolution/ appeallate proceedings. A reading of the said instructions would clearly indicate that the constitution of Local Committees was to curb unnecessary assessment orders which are made high Pitched by the Assessing Officer/ Assessing Units. Report of the Local Committee shall not be binding on the Appellate Authorities/ Revisional Authorities. It is also to be noted that it is on the discretion of the Principal Chief Commissioner of Income Tax to take any departmental action based on that Report. There is no instructions for giving an opportunity of hearing by the Local Committee. The Local Committee being neither a quasi judicial authority or a statutory authority is not bound to give an opportunity of hearing to the grieving tax payer. It is primarily an internal mechanism only to curb the high Pitched assessment without any reasons or in violation of law or principles of natural justice. A learned Single Judge of this Court in [ 2019 (9) TMI 614 - MADR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessment years 2016-2017 and 2019-2020, a show cause notice under Section 148(A)(b) of the Income Tax Act was issued stating that the case of the petitioner had been reopened based upon the information available in the Insight Portal indicating that there has been suppression of cash sales. Thereafter, an order under Section 148A(d) of the Act was passed and a notice under Section 148 of the Act was issued. The second respondent on completing the assessment under Section 147 read with 154(b) of the Act passed an order of assessment claiming a fanciful figure. Aggrieved against the same, the petitioner had also preferred an appeal before the fourth respondent herein and the same is pending. The petitioner, taking benefit of the circular issued by the CBDT had submitted a grievance petition to the Local Committee for High Pitched Scrutiny Assessment. The petitioner had raised various issues including the violations of principles of natural justice, non-application of mind, reliance placed upon the particulars which had been obtained behind the back of the petitioner, apart from the merits claiming the assessment to be a High Pitch Assessment. However, the first respondent by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evances from the tax payers would have to examine to ascertain whether there is a prima facie case of High Pitch Assessment, non-observance of principles of natural justice, non-application of mind or gross negligence of the Assessing Officer/ Unit. It had also the power to call for the relevant assessment records, seek inputs from the Directorate of System on system related issues emanating from the grievances raised by the tax payer. Thereafter, the Local Committee would ascertain whether the additions made in the assessment order is whether or not bad by any sound reason or logic, the provisions of law has been grossly misinterpreted or obvious and well established facts on record has outrightly been ignored. In that process, the Local Committee will also look into the allegations of violation of principles of natural justice and thereafter, submit a Report either treating the said assessment order to be high pitched or not along with the reasons to the respective Principal Chief Commissioner of Income Tax concerned. On receipt of such Report, the Principal Chief Commissioner of Income Tax may take suitable administrative action in respect of the assessment which are found to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Writ Petitions are as to whether the Local Committee which had been constituted primarily to address the grievance of the tax payers as an institutional mechanisam mainly for taking suitable administrative actions wherever required would have to provide an opportunity of hearing before submitting its Report. 9. Originally by instructions dated 09.11.2015, the Local Committees were constituted to find out the genunity of grievance of the tax payers with regard to High Pitched Assessment. If the Local Committee comes to a conclusion that there is an unreasonable and high pitched assessments that had been made, then the Principal Chief Commissioner of Income Tax, after considering the views of the Committee would take suitable administrative action apart from presenting the same before the Appellate Authorities so that the litigations are curtailed. The primary object of such institutional mechanism was to have a check and balance with its own officers for them to pass a fair and reasonable assessment orders. 10. The said instructions dated 09.11.2015 was superseded by a fresh instructions on 23.04.2022. The functions of the Local Committees was clearly delineated and the follow-up a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees before the Appellate Authorities can very well be decided by the Appellate Authority not withstanding the fact that the Local Committee had decided otherwise. The learned Judge had also held that the rejection of the petitioner's complaint before the Local Committee will not prejudice the right of the assessee to persue his appellate remedy by raising all grounds available to him. For better appreciation, the relevant paragraph of the said order is extracted hereunder:- 9.As rightly pointed out by the learned Senior Standing Counsel for the respondents, the mechanism provided to approach the Local Committee is not in lieu of the appellate remedy and therefore, the rights and contentions of the assessee before the Appellate Authority in their appeal can very well be considered and decided by such Authorities notwithstanding the fact that the complaint filed by the petitioner before the Local Committee has resulted in passing the impugned communication. In other words, the Appellate Authority, being the fact finding Authority, has to consider the entire matter and passed an order on merits and in accordance with law. Therefore, this Court is of the view that the rejection of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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