The Madras High Court has held that the faceless assessment officer and jurisdictional assessment officer have concurrent jurisdiction for issuance of reassessment notice.
The bench of Justice Krishnan Ramasamy has observed that as far as the assessment, re-assessment or re-computation is concerned, both the Faceless Assessment Officer as well as the Jurisdictional Assessment Officer will have concurrent jurisdiction for various reasons.
Firstly, as far as the international taxation, Central Circle Charges and search and seizure cases are concerned, it has been specified only for the JAO. In such case, the FAO will not have any jurisdiction to make assessment, re-assessment or re-computation.
Secondly, the Scheme provides only with regard to the Automated Allocation System in accordance with the risk management strategy formulated by the Board from time to time, which shall be made in faceless manner.
Thirdly, the Clause (i) of Explanation (1) deals on the aspect of income escaped assessment, means any information of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time. Therefore, except the clause (i) of Explanation (1), the Scheme has not mentioned anything about the faceless assessment of the categories mentioned at Clause (ii) to (v) of Explanation (1). Hence, all the other categories mentioned in Clause (ii) to (v) of Explanation (1) of Section 148 of the IT Act shall not be made in accordance with the Scheme.
Therefore, it is clear that the Scheme was framed to cover the category of information as mentioned in Clause (i) of Explanation (1), for which the assessment, reassessment or recomputation shall be conducted in faceless manner.
Fourthly, section 144B(2) of the Income Tax Act has empowered the Board to specify the territorial area, persons or class of persons, income or class of income, or cases or class of cases, which shall be made in faceless manner. In all the other cases, where the Board has not specified anything or specified other than by faceless manner, the assessment shall be conducted in any manner, other than the faceless manner, by the concerned JAO.
Lastly, in terms of Sub-Section 7(a)(ii) and (8) of Section 144B of the Income Tax Act, the Principal Chief Commissioner or Principal Director General (in-charge of NaFAC), as the case may be, at any stage of the assessment, if considered necessary, shall transfer the cases to the Assessing Officer having jurisdiction over such cases with the prior approval of the Board.
The petitioner challenged the jurisdiction of the Jurisdictional Assessment Officer (JAO) to issue notice under Section 148 of the Income Tax Act, 1961. Initially, she would submit that the JAO will not have any power to issue any notice under Section 148 subsequent to the incorporation of Section 151A of the IT Act and introduction of two Schemes, viz., “E-Assessment of Income Escaping Assessment Scheme, 2022, dated 29.03.2022” and “Faceless Jurisdiction of Income-tax Authorities Scheme, 2022, dated 28.03.2022”.
The court while dismissing the writ petition held that while the FAO performs the duties of faceless assessment in faceless manner, the JAO is also equally performing his duties, in faceless manner, while issuing the notice under Section 148A/148 of the Income Tax Act, as intended in the Scheme.
Case Details
Case Title: Mark Studio India Private Limited Versus ITO
Case No.: W.P.Nos.25223 & 25227 of 2024 and W.M.P.Nos.27545, 27547, 27549 & 27550 of 2024
Date: 20.12.2024
Counsel For Petitioner: G.Vardhini Karthik
Counsel For Respondent: B.Ramaswamy
