The Bombay High Court held that the faceless assessment provisions are applicable on international taxation charge.
The bench said that the Counsel for the respondents would not deny as to what has been held by the Court in Hexaware Technologies Limited and the applicability of the provisions of Section 151A(1) to any notice issued under section 148 or even to the proceedings initiated under section 148A of the Act.
“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 the assessment proceedings which would be required to be conducted as an exception to the faceless mechanism”, the bench said.
The court relied on the judgment of Hexaware Technologies Limited in which the division bench has held that Respondents, being an authority subordinate to the CBDT, cannot argue that the Scheme framed by the CBDT, and which has been laid before both House of Parliament is partly otiose and inapplicable.
The division bench in the Hexaware Technologies Limited case further held that the phrase “to the extent provided in Section 144B of the Act” would mean that the restriction provided in Section 144B of the Act, such as keeping the International Tax Jurisdiction or Central Circle Jurisdiction out of the ambit of Section 144B of 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.
The court accepted the petitioner’s contention that the challenge as raised by the petitioner would stand squarely covered by the decision of the Court in Hexaware Technologies Limited inasmuch as the impugned notices under section 148A as also section 148 have been issued by the JAO and not under the Faceless mechanism.
Facts
The petitioner has challenged the reassessment notice issued under section 148 of the Income-tax Act, 1961 on the grounds that the notice is illegal and invalid as the provisions of Section 151A of the Act and as interpreted by the Court in the decision of Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors.
Contentions
Petitioner contended that the notice is issued outside the faceless mechanism as per the requirement of Section 151A of the Act read with notification dated 29 March, 2022 issued by the Central Government providing for a faceless mechanism for any action to be taken leading to the issuance of a notice under Section 148 of the Act on the ground that income has escaped assessment.
It is submitted that, hence the Jurisdictional Assessing Officer had no authority to issue the impugned notice.
Conclusion
The bench allowed the petition.
Case Details
Case Name: CapitalG LP v/s Assistant Commissioner of Income Tax, Int. Tax, Circle 2(1)(1), Mumbai & Ors.
Citation: WRIT PETITION (L) NO. 15289 OF 2024
Counsel for Petitioner : Mr. J.D. Mistry, Senior Advocate
Counsel for Respondent : Mr. Prathmesh Bhosle
Court: Bombay High Court
Judge: Justice G. S. Kulkarni And Justice Somasekhar Sundaresan
Decision Date: 06/08/2024
