The Income Tax Department has recently filed the special leave petition (SLP) against the Bombay High Court Order quashing notices issued by jurisdictional Assessing Officer (JAO) instead of faceless AO as per the faceless scheme, before the Supreme Court.
The bench of Justice B.V. Nagarathna and Justice Nongmeikapam Kotiswar Singh while condoning the delay in filing the SLP directed to issue the notice to the company namely Hexaware Technologies Limited.
The bench tagged the matter with the Telangana High Court in the case of Suryalakshmi Cotton Mills Limited vs Union Of India.
The issue raised in all the SLP was whether the Jurisdictional Assessing Officer (JAO) holds jurisdiction over tax payers in addition to Faceless Assessment Officers (FAO).
The Apex court listed the matter on 15/10/2024.
Hexaware Technologies Limited Versus UOI: Case Summary
The Hexaware Technologies was engaged in information technology consulting, software development and business process services.
The Petitioner’s case was selected for scrutiny and notice under Section 143(2) came to be issued. JOA also issued a notice under Section 142(1). This was followed by another notice dated 5th October 2017 calling upon petitioner to file details of deduction claimed under Chapter VIA alongwith all supporting documents. By its letter dated 13th November 2017 petitioner submitted details of deduction claimed under Chapter VIA of the Act alongwith all supporting documents.
Petitioner filed computation of income and provided reference to disclosures in Form 3CD with respect to the deductions claimed by petitioner. The submissions were filed during the assessment proceedings. JOA passed an assessment order under Section 143(3) of the Income Tax Act accepting the return of income filed by petitioner.
Almost 3 1⁄2 years later, JOA issued a notice under Section 148 stating that he had reason to believe that income chargeable to tax for Assessment Year 2015-2016 has escaped assessment within the meaning of Section 147.
The company filed a writ petition before the Bombay High Court challenging the notice issued under Section 148 on the ground that the notice has been issued on the basis of the provisions which have ceased to exist and are no longer in the statute. The petition was allowed on 29th March 2022 and the Court held that the notice was invalid.
Read More: Completed Income Tax Assessments Can’t Be Reopened Without New Material: Delhi High Court
The Bombay High Court while allowing the petition held that there is no power given to the administration under either Section 151A or under the Faceless Scheme. The Scheme is clear and categorical that notice under Section 148 of the Income Tax Act shall be issued through automated allocation and in a faceless manner. issuance of notice under section 148 of the Act shall be through automated allocation in accordance with the risk management strategy and that the assessment shall be in faceless manner to the extent provided in section 144B of the Act.” The Scheme is categoric as stated aforesaid that the notice under Section 148 of the Act shall be issued through automated allocation and in a faceless manner. The Scheme clearly provides that the notice under Section 148 is required to be issued by NFAC and not the JAO.
The Bombay High Court opined that there is no question of concurrent jurisdiction of the JAO and the FAO for issuance of reassessment notice.
Case Title: PCIT Versus Hexaware Technologies Limited
Case No.: Special Leave Petition (Civil) Diary No.37843/2024
Date: 03-09-2024
Counsel For Petitioner: A.S.G. N Venkatraman, A.S.G.; Sr. Adv. Rupesh Kumar, AOR Raj Bahadur Yadav, Advocates, Shashank Bajpai, V Chandrashekhara Bharathi, Sachin Sharma, Manish Pushkarna
Counsel For Respondent: None
