The Bombay High Court has held that in respect of central charges and international taxation charges, the reassessment proceedings under Section 148A read with Section 148 of the Income Tax Act would be required to be held in a faceless manner.
The bench of Justice G. S. Kulkarni and Justice Somasekhar Sundaresan has observed that the mandatory faceless procedure for issuance of notice under section 148 of the Income Tax 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 section 144B read with section 151A of the Income Tax Act.
The petitioner/assessee has challenged the notice issued to the petitioner under Section 148A(b), order passed under Section 148A(d) and the notice issued under Section 148 of the Income Tax Act, 1961 by the Jurisdictional Assessing Officer, International Tax Ward (4)(2)(1), Mumbai.
The petitioner submitted that the notice issued under Section 148A(b) as also the order under section 148A(d) leading to the issuance of a notice under section 148 of the Income Tax Act are in the teeth of the provisions of section 151A read with the provisions of section 144B. The scheme notified by the Central Government vide a Notification dated 29 March, 2022 under section 151A of the Act in which the department is 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 Income Tax Act.
Section 151A of the Act 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 court relied on the decision in the case of Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax in which it was held that 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 to issue notice under section 148 of the Act, outside the faceless mechanism and contrary to the scheme notified by the Central Government vide a Notification dated 29 March, 2022.
The court held that as the notices were issued by the JAO certainly they fall outside the purview of the faceless mechanism and on that count as held in the decision of Hexaware, the same would be required to be held to be illegal and without jurisdiction.
Case Title: Abhin Anilkumar Shah Versus ITO
Case No.: Writ Petition (L) No.16750 Of 2024
Date: 28/09/2024
Counsel For Petitioner: Gunjan Kakkad
Counsel For Respondent: Jehangir D. Mistri
