TaxTMI 
TaxTMI 
2024 (12) TMI 1349
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....sue notice under Section 148 of the Income Tax Act, 1961 (hereinafter called as "IT Act"). 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" (hereinafter called as "Scheme"). 2.2 She would submit that the aforesaid Schemes were brought in, in terms of the provisions of Section 151A of the IT Act, which enables the Central Government to bring in a Scheme to conduct assessment, reassessment or re-computation in faceless manner. Accordingly, the aforesaid two Schemes were brought in by the Central Government. Once if such Scheme was brought in to conduct assessment, re-assessment or re-computation under Section 147 of the IT Act in faceless manner, the JAO will have no role to play and all the process has to be carried out only by Faceless Assessment Officer (FAO). In the present case, Scheme was introduced for conducting assessment, re-assessment or re-computation under S....
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....r of Income Tax reported in 2024: GUJHC: 54567-DB. 3. Submissions made by the learned Senior Standing counsel for the respondent: 3.1 Dr.B.Ramaswamy, learned Senior Standing counsel, has strongly opposed the submissions made by the learned counsel for the petitioner and would submit that the Scheme as well as the provisions of Section 144B had explicitly provide that the JAO will have the jurisdiction in the process of issuing the notice under Section 148 and 148A of the IT Act. 3.2 By referring the Scheme, he has made an elaborate submissions on the aspect of Automated Allocation System based on the risk management strategy formulated by the Board from time to time to the extent provided in Section 148 of the IT Act and also as to how the notices were sent in faceless manner. 3.3 Further, he referred the impugned notices and would submit that the impugned show cause notices were not served physically. The cases were selected by the Directorate of Income Tax (Systems) through Automated Allocation System based on the risk management strategy formulated under Section 148 of the IT Act and thereafter, the same was forwarded to the JAO based on the PAN card jurisdiction and....
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.... Act. 3.8 Further, by referring Clause (iv) of Sub-Section (1) of Section 144B of the IT Act, he would submit that if any additional information is required, after the allotment of Section 148 cases along with the documents to the respective assessment units by virtue of Automated Allocation System by NaFAC, the concerned assessment unit shall request the NaFAC to send notice to get additional information from the Assessee. By referring the word "additional information", he would submit that at the time of allotment, Section 148 notice and its reply and Section 148A notice and its reply along with all the other documents will be made available with the concerned assessment unit, by the NaFAC. Therefore, Section 144B makes it very clear that the proceedings at NaFAC level would commence only from the stage of issuance of notice under Section 142(1) or 143(2) of the IT Act. Before the said stage, only JAO will have power to issue Section 148/148A notice. Thereafter, the Directorate of Income Tax (Systems) shall forward these cases to NaFAC to take further action. The guidelines has been issued by the Board on this aspect elaborately. 3.9 He would also contend that the said guid....
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....putation under Section 147 of the IT Act, with regard to the income escaped assessment, has to be carried out in faceless manner in terms of the provisions of Section 144B of the IT Act. However, Section 144B of the IT Act shall not enable the National Faceless Assessment Centre (NaFAC) to issue the notice under Section 148A and 148 of the IT Act in the faceless manner. 8. In reply, the learned counsel for the petitioner had consistently submitted that notice under Section 148A and 148 shall be issued by the NaFAC in terms of the provisions of Section 144B of the IT Act read with the Scheme. 9. Now, let me analyze the provisions of Section 144B of the IT Act, which was introduced, vide the Finance Act, 2022, with effect from 01.04.2022, which is both in substantive and procedural in nature. For ready reference, Section 144B of the IT Act is reproduced hereunder: "Faceless Assessment. 144B.(1) Notwithstanding anything to the contrary contained in any other provision of this Act, the assessment, reassessment or recomputation under sub-section (3) of section 143 or under section 144 or under section 147, as the case referred to in Sub-Section (2) shall be made ....
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....erence to the technical unit has been made by the assess ment unit under sub-clause (c) of clause (iv), the request shall be meigned by the National Faceless Assessment Centre to a technical unit through an automated allocation system; (vii) the National Faceless Assessment Centre shall send the report received the Nathe verification unit or the technical unit, as the case may be, based on the request referred to in clause (vi) to the concerned assessment unit; (viii) where the assessee fails to comply with the notice served under clause (v) or notice issued under sub-section (1) of section 142 or the terms of notice issued under sub-section (2) of section 143, the National Face less Assessment Centre shall intimate such failure to the assessment unit; (ix) the assessment unit shall serve upon such assessee, as referred to in clause (viii), a notice, through the National Faceless Assessment Centre, under section 144, giving him an opportunity to show-cause on a date and time as specified in such notice as to why the assessment im his case should not be completed to the best of its judgment; (x) the assessee shall, within the time specified in the....
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.... by the Board,- (a) convey to the assessment unit to prepare draft order in accordance with the income or loss determination proposal, which shall thereafter prepare a draft order, or (b) assign the income or loss determination proposal to a review unit through an automated allocation system, for conducting review of such proposal; (xvii) the review unit shall conduct review of the income or loss determination proposal assigned to it by the National Faceless Assessment Centre, under sub-clause (b) of clause (xvi), whereupon it shall prepare a review report and send the same to the National Faceless Assessment Centre; (xviii) the National Faceless Assessment Centre shall, upon receiving the review report under clause (xvii), forward the same to the assessment unit which had proposed the income or loss determination proposal; (xix) the assessment unit shall, after considering such review report, accept or reject some or all of the modifications proposed therein and after recording reasons in case of rejection of such modifications, prepare a draft order; (xx) the assessment unit shall send such draft order prepared under sub- clau....
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....nt Centre shall send such intimation along with a copy of objections filed to the assessment unit; (xxviii) the National Faceless Assessment Centre shall, in a case referred to in clause (xxvii), upon receipt of the directions issued by the Dispute Resolution Panel under subsection (5) of section 144C, forward such directions to the assessment unit; (xxix) the assessment unit shall, in conformity with the directions issued by the Dispute Resolution Panel under subsection (5) of section 144C, complete the assessment within the time allowed in sub-section (13) of section 144C and initiate penalty proceedings, if any, and send a copy of the assessment order to the National Faceless Assessment Centre, (xxx) the National Faceless Assessment Centre shall, upon receipt of the assessment order referred to in clause (xxvi) or clause (xxix), as the case may be, serve a copy of such order and notice for initiating penalty proceedings, if any, on the assessee, along with the demand notice. specifying the sum payable by, or the amount of refund due to the assessee on the basis of such assessment; (xxxi) the National Faceless Assessment Centre shall, ....
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.... guideline or notification issued from time to time, the Authorities shall conduct the faceless assessment. 12. That apart, Sub-Section (1) of Section 144B further provides the procedure for conducting the faceless assessment. 12.1 Clause (i) (a) In terms of Clause (i) of Sub-Section (1) of Section 144B of the IT Act, the NaFAC shall assign the cases selected for the purpose of faceless assessment to a specific assessment unit through Automated Allocation System. (b) Thus, it is clear that the NaFAC is doing the process of selection of cases for faceless assessment and thereafter, it will be assigned to various assessment unit through Automated Allocation System. (c) The "Automated Allocation System" has been defined in Explanation to Section 144B, which reads as follows: "(a)... (b)... (c) "automated allocation system" means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources" (d) Therefore, in the manner stated above, the NaFAC will select the cases and thereafter, assign the s....
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....r the end of the relevant assessment year commencing on or after the Ist day of April, 1990 to a person who has not made a return within the time allowed under sub-section (1) of section 139 or before the end of the relevant assessment year, any such notice issued to him shall be deemed to have been served in accordance with the provisions of this subsection: Provided further that a notice under this subsection for the pur poses of this clause may also be served by the prescribed income-tax authority, [(ii)] to produce, or cause to be produced, such accounts or documents as the [Assessing] Officer may require, or [(iii)] to furnish in writing and verified in the prescribed manner information in such form and on such points or matters (including a statement of all assets and liabilities of the assessee, whether included in the accounts or not) as the [Assessing] Officer may require: 143.- Assessment (1).... (2) Where a return has been furnished under Section 139 or in response to a notice under sub-section (1) of Section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necess....
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....ce under Section 148 of the IT Act, if no returns has been furnished in response to the said notice, in such case, the notice will be send under Section 142(1) of the IT Act. ii) In cases, where the returns were furnished after the receipt of notice issued under Section 148 of the Act, in such case, the notice under Section 143(2) of the IT Act will be sent. 18. In the above two cases of income escaping assessment, i.e., whether the return has been filed or no return has been filed, notice under Section 143(2) or 142(1) of the IT Act as the case may be, shall be served on the Assessee calling upon information through NaFAC. 19. With regard to the said aspect, the Board had issued guidelines on 24.05.2023 for compulsory selection of returns for complete scrutiny for the financial year 2023-24. Clause (4) of the said guidelines deals with the cases, in which, notice under Section 148 of the IT Act has been issued and the same reads as follows: S. No Parameter Procedure for Compulsory Selection (4) Cases in which notice under Section 148 of the Act have been issued Cases where return is either furnished or not furnished in response to notice ....
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.... "(2) The faceless assessment under sub-section (1) shall be made in respect of such territorial area, or persons or class of persons or incomes or class of incomes or cases or class of cases, as may be specified by the Board." a) A reading of the above makes it clear that for the purpose of faceless assessment, the Board has to specify the territorial area, or persons or class of persons, or incomes or class of incomes, or cases or class of cases. b) As far as the territorial area is concerned, in law, the term "territorial area" would mean under the jurisdiction of Government Authorities. Accordingly, by virtue of powers available under Section 144B(2) and in accordance with the provisions of Scheme, the area of JAO and FAO, has been clarified for the purpose of issuance of 148/148A notice and thereafter, the assessment, re-assessment or re-computation shall be carried out by virtue of FAO in terms of the provisions of Section 144B of the IT Act. 22. On the other hand, in absence of any such Scheme for issuance of Section 148A notice and with the limited scope of the Scheme for issuance of Section 148 notice, the cases pertaining to issuance of Sectio....
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....rther, by referring the Sub-Section (2) of Section 151A of the IT Act, wherein it has been stated that "the Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification", she contended that the Central Government cannot issue any direction beyond 31.03.2022. Therefore, the guidelines issued by the Board on 24.05.2023 is beyond the scope of Section 151A of the IT Act. 28. Now, let me examine the provisions of Section 151A of the IT Act and the E-Assessment of Income Escaping Assessment Scheme, 2022, dated 29.03.2022 and the Faceless Jurisdiction of Income Tax Authorities Scheme, 2022 dated 28.03.2022. For ready reference, the provisions of Section 151A of the IT Act reads as follows: "151A. (1) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of assessment, reassessment or re-computation under section 147 or issuance of notice under section 148 or conducting of enquiries or iss....
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....he IT Act, for issuance of Section 148 notice, the prior approval is require from the Authorities concerned. On the other hand, Section 151A empowers the Central Government to bring a Scheme for sanction of issuance of notice under Section 151 of the IT Act. However, so far, no Scheme was brought in by the Central Government. In the absence of any such Scheme, the provisions of Section 151A has to be complied with, while issuing Section 148 notice, the prior approval has to be obtained. Accordingly, the Board has issued the above guidelines for the purpose of implementation of the Act, without any deviation from the Scheme and the provisions of Section 144B of the IT Act. 31. As stated above, the NaFAC will assume its jurisdiction in Section 148 cases from the stage of issuance of notice under Section 142(1) or 143(2) of the IT Act, which is subsequent to the stage of obtaining permission from the higher Authorities concerned under Section 151 of the IT Act for issuance of notice under Section 148 of the IT Act. Therefore, the NaFAC will have no role to play in issuance of Section 148 notice and to get prior approval from higher Authorities in terms of Section 151, for which eit....
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....come escaped assessment is concerned, the jurisdiction of the NaFAC would start to conduct Section 147 proceedings in terms of provisions of Section 144B of the IT Act, only from the stage of issuance of notice under Section 143(2) or 142(1), i.e., subsequent to the issuance of notice under Section 148 of the IT Act. Thus, the NaFAC assumes the jurisdiction for assessment, re- assessment or re-computation in the cases of income escaping assessment only from the stage of issuing the notice under Section 142(1) or 143(2) immediately upon the receipt of information from the Directorate of Income Tax (Systems). 34. From the above discussion, it is clear that the NaFAC will not have any power of issuance of notice under Section 148 or 148A of the IT Act. As contended by the learned Senior Standing counsel appearing for the respondents, in cases of income escaping the assessment, the work of NaFAC only starts from issuance of notice under Section 142(1) and 143(2) of the IT Act. 35. In terms of Sub-Section (2) of Section 151A of the IT Act, the Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette,....
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....tice under section 148 of the Act, shall be through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in section 148 of the Act for issuance of notice, and in a faceless manner, to the extent provided in section 144B of the Act with reference to making assessment or reassessment of total income or loss of assessee." 38. The above Scheme was brought in for the following two purposes, (i) assessment, reassessment or re-computation under section 147, (ii) issuance of notice under Section 148 of the IT Act. 39. However, no scheme has been brought in for the following other 2 purposes as provided in Section 151A of the IT Act (i) conducting of inquiry or issuance of show cause notice or passing of order under Section 148A or (ii) sanction for issuance of notice under Section 151 of the IT Act. 40. On the other hand, Section 151A was intended to bring separate Scheme for the following purposes and to deal with them separately: i) assessment, reassessment or re-computation under section 147 or ii) issuance of notice under Section 148 or iii) conducting of inquiry ....
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....d to in Section 148 of the Act in a faceless manner. (vii) As per the provisions of E-Assessment Scheme, while issuing notice under Section 148 of the IT Act, the following three mandatory requirements have to be complied with: The notice under Section 148 shall be issued (a) through automated allocation; (b) in accordance with the risk management strategy formulated by the Board as referred to in Section 148 of the Act; (c) in the faceless manner to the extent mentioned in Section 144B of the IT Act. (a) Automated Allocation System: (i) As far as the automated allocation for issuance of notice under Section 148 of the IT Act is concerned, the Directorate of Income Tax (Systems) will select cases randomly from ITBA portal based on the PAN card jurisdiction and allocate through the automated allocation system as defined in the Scheme to the concerned Jurisdictional Assessing Officer. (ii) Since the cases are selected randomly by the Directorate of Income Tax (Systems) and allocated based on the PAN Card jurisdiction to the concerned Jurisdictional Assessing Officer, the JAO will have no role to play in allocatio....
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.... TDS and Tax Collected at Source (TCS) data. Details of expenses or investments reported elsewhere (e.g., property purchases, business turnover). Example: A taxpayer reports an income of **** but shows a property purchase of ****. This mismatch triggers an alert. 3. Pattern Recognition and Risk Analysis AI algorithms identify patterns of underreporting or evasion, such as: Sudden drops in reported income compared to previous years. Unusual claims of deductions or exemptions. Non-reporting of foreign income or assets. Failure to reconcile GST returns with ITR. 4. Identifying Non-Filers The system tracks taxpayers who are: Liable to file returns but fail to do so, based on TDS data, property transactions, or business turnover. Repeat offenders in earlier assessments. 5. Report from High-Value Transactions Transactions exceeding specific thresholds are reported by entities like banks, credit card companies, and registrars. Examples: Cash deposits above **** in a financial year. Credit card payments exceeding ***** in a single transaction. Mutual fund p....
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....ars. Example: Previous income: *** current income: *** without reasonable justification. f) Inconsistencies in Capital Gains or Investments Gains from shares, mutual funds, or property are underreported, or investments exceed known sources of income. Example: Mutual fund investment: **; reported income: ** g) Non-Filing or Delayed Filing Taxpayers liable to file ITR but failing to do so. Filing after the due date, especially when associated with high-value transactions. h) International Transactions and Foreign Assets Non-disclosure of foreign income, investments, or bank accounts. Example: Foreign remittance data shows ** transferred abroad, but no corresponding income is declared. i) Frequent Cash Transactions Excessive cash deposits or withdrawals not aligned with the taxpayer's profile or declared income. Example: Annual cash deposits: **; declared income: ** j) Business Turnover and Profit Mismatch Businesses reporting disproportionate turnover and profits compared to industry standards. Example: Turnover: ** profit: ** ....
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....ed on the risk management strategy as formulated by the Board from time to time. Therefore, the issuance of notice under Section 148 have already been duly complied with by issuing the same by JAO in a faceless manner, through automated allocation system, in accordance with the risk management strategy as stated above. (c) Faceless Manner: (i) The petitioner has referred to Section 144B and contended that it should be in faceless manner otherwise, the Scheme would become redundant and Clause 3(b) of the Scheme would be otiose and in this regard, they referred three judgments of the three High Courts. (ii) As far as Section 144B is concerned, there is no dispute that the same deals with faceless assessment and the procedure stated therein would apply for the purpose of assessment, re-assessment or re-computation to the extent provided therein and send notice, as referred in Section 144B of the IT Act, by NaFAC. Except the above, the NaFAC will not have any power to issue any other notice beyond the scope of Section 144B of the IT Act. The Scheme only speaks about the issuance of notice in faceless manner. (iii) Nowhere, either in provisions of IT ....
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....as follows: First page of Section 148A notice: Last page of Section 148A notice: Section 148 notice: (x) A reading of the above two notices would show that the notice has been signed digitally and it was sent to the Assessee's registered e-mail account through ITBA web portal. As contended above, the cases have not been selected by the person, who has send notice. However, as narrated above, the Directorate of Income Tax (Systems) selected the cases based on the discrepancies identified by the risk management system as referred in clause (i) of Explanation (1) to Section 148 of the Act. 42. Except the procedure mentioned above for the purpose of sending notice under Section 148, no other provision enables any of the Income Tax Officers to send notice in any other mode in faceless manner. In the present case, as discussed above, notice has been sent in the faceless manner by duly complying with the conditions and the modalities mentioned in the scheme itself which were already discussed that in the absence of specific provision empowering the Faceless Assessment Officer in terms of Section 144B, the power and the Jurisdiction of the Jurisdictio....
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....-- (a) 'Act' means the Income-tax Act, 1961 (43 of 1961); (b) 'automated allocation' means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources; (2) words and expressions used herein and not defined, but defined in the Act, shall have the meaning respectively assigned to them in the Act. 3. Scope, Powers and Performance of functions of income-tax authorities. -- For the purpose of this Scheme, -- (a) the exercise of all or any or the powers and performance of all or any of the functions conferred on, or, as the case may be, assigned to income-tax authorities, by or under the Act as referred to in section 120 of the Act; or (b) vesting the jurisdiction with the Assessing Officer as referred to in section 124 of the Act, shall be in a faceless manner, through automated allocation, in accordance with and to the extent provided in-- (i) section 144B of the Act with reference to making faceless assessment of total income or loss of assessee; (ii) the Faceless Appeal Scheme, 2....
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....intended by the Act is only for the purpose of making faceless assessment through the Assessing Officer referred to in Section 144B of the Act. The Assessing Officer referred to in Section 144B of the Act cannot perform any other acts than making assessment, reassessment or re-computation in faceless manner, to the extent provided in Sub-Section (2) of Section 144B of the IT Act, by the Board. 49. The learned counsel appearing for the petitioner has referred the judgment of the Telangana High Court in Kankanala Ravindra Reddy vs. Income-Tax Officer reported in (2023) 156 taxmann.com 178 (TELANGANA). The relevant paragraphs, viz., paragraph Nos.25, 26 and 27 are extracted hereunder: "25. A plain reading of the aforesaid two notifications issued by the Central Board of Direct Taxes dated 28-3-2022 and 29-3-2022, it would clearly indicate that the Central Board of Direct Taxes was very clear in its mind when it framed the aforesaid two schemes with respect to the proceedings to be drawn under section 148A, that is to have it in a faceless manner. There were two mandatory conditions which were required to be adhered to by the Department, firstly, the allocation being made t....
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.... section 119 of the Act. Any such guideline issued by the Central Board of Direct Taxes is not binding on the petitioner. Further the said guideline is also not binding on respondent No. 1 as they are contrary to the provisions of the Act and the Scheme framed under section 151A of the Act. The effect of a guideline came up for discussion in Sofitel Realty LLP v. ITO (TDS) [(2023) 457 ITR 18 (Bom); 2023 SCC OnLine Bom 1498; (2023) 153 taxmann.com 496 (Bom).] wherein this court has held that the guidelines which are contrary to the provisions of the Act cannot be relied upon by the Revenue to reject an application for compounding filed by an assessee. The court held that guidelines are subordinate to the principal Act or Rules, it cannot restrict or override the application of specific provisions enacted by Legislature. The guidelines cannot travel beyond the scope of the powers conferred by the Act or the Rules. 33.1. The guidelines do not deal with or even refer to the Scheme dated March 29, 2022 ((2022) 442 ITR (Stat) 198) framed by the Government under section 151A of the Act. Section 151A(3) of the Act provides that the Scheme so framed is required to be laid before ea....
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....raph 3 clearly provides that the issuance of notice "shall be through automated allocation" which means that the same is mandatory and is required to be followed by the Department and does not give any discretion to the Department to choose whether to follow it or not. That automated allocation is defined in paragraph 2(b) of the Scheme to mean an algorithm for randomised allocation of cases by using suitable technological tools including artificial intelligence and machine learning with a view to optimise the use of resources. Therefore, it means that the case can be allocated randomly to any officer who would then have jurisdiction to issue the notice under section 148 of the Act. It is not the case of respondent No. 1 that respondent No. 1 was the random officer who had been allocated jurisdiction. 36. With respect to the arguments of the Revenue, i.e., the Notification dated March 29, 2022 ((2022) 442 ITR (Stat) 198) provides that the Scheme so framed is applicable only -to the extent? provided in section 144B of the Act and section 144B of the Act does not refer to issuance of notice under section 148 of the Act and hence, the notice cannot be issued by the Faceless A....
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....4B of the Act. The argument of the respondent, therefore, renders the whole Scheme redundant. An argument which renders the whole Scheme otiose cannot be accepted as correct interpretation of the Scheme. The phrase "to the extent provided in section 144B of the Act" in the Scheme is with reference to only making assessment or reassessment or total income or loss of the assessee. Therefore, for the purposes of making assessment or reassessment, the provisions of section 144B of the Act would be applicable as no such manner for reassessment is separately provided in the Scheme. For issuing notice, the term "to the extent provided in section 144B of the Act" is not relevant. The Scheme provides that the notice under section 148 of the Act, shall be issued through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in section 148 of the Act and in a faceless manner. Therefore, "to the extent provided in section 144B of the Act" does not go with issuance of notice and is applicable only with reference to assessment or reassessment. The phrase "to the extent provided in section 144B of the Act" would mean that the restriction provided ....
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....n 147 operate in two different ways. For the purpose of Section 148, where Section 148A is applicable, Explanation 1 provides: (23) The provisions contained in Explanation 1 shows that the information with the Assessing Officer for the purpose of Section 148, which suggests that the income chargeable to tax has escaped assessment under the Explanation would mean: (i) any information in the case of the assessee, for the relevant assessment year, in accordance with the risk management strategy formulated by the Board from time to time; or (ii) any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or (iii) any information received under an agreement referred to in Section 90 or Section 90A of the Act; or (iv) any information made available to the Assessing Officer under the scheme notified under Section 135A; or (v) any information which requires action in consequence of the order of a Tribunal or a Court. On the contrary, Explanation 2 which deals with the information received during search and seizure oper....
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....e above, by reading all the relevant provisions of the Income Tax Act' 1961 as also the notification dated 29.03.2022 issued by the Central Government framing scheme for "E-Assessment of Income Escaping Assessment" under sub-sections (1) and (2) of Section 151 A of the Act' 1961, we reach at an irresistible conclusion that the challenge to the notice under Section 148 dated 22.03.2024 for A.Y. 2021 - 2022 on the sole premise that the said notice could have been issued only through automated allocation in faceless manner and not by Jurisdictional Assessing Officer (JAO), cannot be sustained. (29) ............. (30) Moreover, Section 151A contemplates framing of the scheme by the Central Government by notification in the official Gazette, even for the purpose of issuance of notice under Section 148 in the case of re-assessment or sanction for issue of such notice under Section 151, with the aim to impart greater efficiency, transparency and accountability by eliminating the interface between the income tax authority and the assessee or any other person to the extent technologically feasible. (31) The feasibility of implying technology for the proces....
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....e shows that the draftsman has used a comma immediately after the phrase "shall be through automated allocation". Yet another comma appears after the phrase "for issuance of notice". It thus appears to have been the clear intent of the author to separate and segregate the phases of initiation of action in accordance with RMS, the formation of opinion whether circumstances warrant action under Section 148 of the Act being undertaken by issuance of notice and the actual undertaking of assessment itself. 100. Beyond the specific use of punctuation within Clause 3, a comprehensive reading of the Faceless Reassessment Scheme 2022, supported by the extensive material presented by the respondents, bolsters the clear intent underlying each phase of the faceless assessment process. 101. As we had noticed in the preceding parts of this decision, the RMS and the Insight Portal pushes information to the JAO and is principally not concerned with faceless assessment at all. The RMS essentially enables the JAO to firstly examine the veracity of disclosures made and examine the return against various parameters and information which has been collated by the Directorate of Systems....
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....t Scheme 2022. As was noted by us earlier, Clause 3 clearly contemplates the initial enquiry and formation of opinion to reassess being part of one defined process followed by actual assessment in a faceless manner. It thus divides the process of reassessment into two stages and when viewed in that light it is manifest that it strikes a just balance between the obligation of the JAO to scrutinise information and the conduct of assessment itself through a faceless allocation. The distribution of functions between the JAO and NFAC is complimentary and concurrent as contemplated under the various schemes and the statutory provisions. This balanced distribution underscores the legislative intent to create a seamless integration of traditional and faceless assessment mechanisms within a unified statutory framework. This we so hold and observe since we have, principally, been unable to countenance a situation where the JAO stands completely deprived of the jurisdiction to evaluate data and material that may be placed in its hands" 56. Upon reading the above judgment, this Court is inclined to follow the above findings of the Hon'ble Division Bench of the Delhi High Court, since th....
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....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 re-computation shall be conducted in faceless manner. (d) Section 144B(2) of the IT 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. (e) In terms of Sub-Section 7(a)(ii) and (8) of Section 144B of the IT 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. (f) For the aforesaid reasons, this....
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....A Portal, the relevant documents along with the reply received for Section 148 notice from the Assessee. ix) Thereafter, the Directorate of Income Tax (Systems) forward the Section 148 cases to NaFAC to take further action. Immediately thereupon, the NaFAC shall assume the jurisdiction in terms of Section 144B of the IT Act. x) Once the NaFAC assumed its jurisdiction subsequent to the receipt of the information pertaining to Section 148 cases from the Directorate of Income Tax (Systems), the NaFAC shall issue the notice under Section 143(2) or 142(1) of the IT Act calling for the further information from the Assessee. xi) In terms of Sub-Section (2) of Section 144B of the IT Act, the Board shall have power to specify the territorial area, or persons or class of persons, incomes or class of incomes, or cases or class of cases, in which, the assessment shall be made in faceless manner. xii) The guidelines issued on 24.05.2023, by the Board, is well within the powers available to them, in terms of the provisions of Sub-Section (2) of Section 144B of the IT Act and issuance of such guidelines will not amount of making any modification, granting exemp....
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....see Address of the assessee Email of the assessee Resident/ Not Ordinarily Resident/ Non-Resident Date of order DIN & Notice No: ITBA/AST/F/148A/2024-25/1064082954(1) MARK STUDIO INDIA PRIVATE LIMITED NO. 11/6, FIRST FLOOR RAMANATHAN STREET, MAGALINGAPURAM NUNGAMBAKKAM CHENNAI 600034, Tamil Nadu India [email protected] 15/04/2024 Name and Designation of Specified Authority Specified Authority approval date KRISHNAMURARI RAMCHANDRA SINGH CCIT, CHENNAI-1 13/04/2024 Order under clause (d) of section 148A of the Income-tax Act. 1961 Order under clause (d) of section 148A of the Income-tax Act, 1961 Details and source of information available with the AO Which suggest that income chargeable to tax has escaped assessment The assessee's case was flagged under RMS-CRIU/VRU in Insight by CBDT. CHENNAI WANAPARTHY BLOCK, No. 121, MAHATMA GANDHI ROAD, NUNGAMBAKKAM, CHENNAI, Tamil Nadu, 600034 Note: If digitally signed, the date of digital signature may be taken as date of document. Email: CHENNALITO NC10.60INCOMETAX.GOV.IN, These address of the filing portal has been changed from www.india.. Doc....