TaxTMI 
TaxTMI 
Transformation of Tax Jurisdiction : Clause 245 of the Income Tax Bill, 2025, and Section 130 of the Income-tax Act, 1961
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.... 1961 (inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020) are pivotal statutory provisions that encapsulate the legislative intent to institutionalize faceless assessment and related proceedings. This commentary provides an in-depth analysis of Clause 245, exploring its structure, objectives, and practical implications. It also undertakes a detailed comparative analysis with Section 130, examining similarities, differences, and the legislative trajectory. The discussion aims to elucidate the legal, procedural, and policy dimensions of faceless jurisdiction, offering a comprehensive perspective for legal professionals, taxpayers, and policymakers. Objective and Purpose The primary objective....
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....rnment to allocate jurisdiction to Assessing Officers in a faceless manner, moving away from geographical or territorial considerations. * (c) Transfer of cases u/s 243: The power to transfer cases, traditionally exercised by higher authorities, can now be operationalized facelessly. * (d) Jurisdictional changes due to change of incumbency u/s 244: This ensures continuity and clarity in proceedings when there is a change in the officer handling a case. The language is deliberately broad, allowing the Central Government to determine which powers and functions will be subject to the faceless regime, thereby providing flexibility to adapt to technological advancements and administrative needs. 2. Purposes and Guiding Principles (Sub-sect....
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....ngs, etc.). The provision is significant for two reasons: * It grants flexibility to tailor procedures without necessitating frequent legislative amendments. * It raises questions about the permissible scope of delegated legislation, particularly in light of the doctrine of excessive delegation and the need for safeguards against arbitrary exercise of such powers. 4. Parliamentary Oversight (Sub-section 4) Sub-section (4) mandates that all notifications issued under sub-sections (1) and (3) be laid before both Houses of Parliament. This is a standard safeguard in delegated legislation, ensuring legislative oversight and accountability. While the provision does not specify the consequences of parliamentary disapproval (as seen in som....
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....ing) and the scope of delegated legislation. Comparative Analysis: Clause 245 of the Income Tax Bill, 2025, and Section 130 of the Income-tax Act, 1961 1. Structural and Substantive Parallels Both provisions are strikingly similar in structure and content, indicating that Clause 245 is a continuation, with adaptations, of the framework introduced by Section 130. Both empower the Central Government to introduce a faceless scheme covering key aspects of jurisdiction, powers, and functions of income-tax authorities. The sub-clauses (a) to (d) in both provisions mirror each other, with references to corresponding sections (241/120, 242/124, 243/127, 244/129) in the respective statutes. The objectives-efficiency, transparency, accountability....
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....lause 245 also reflects lessons learned from the initial implementation, technological upgrades, and feedback from stakeholders. 4. Delegated Legislation and Safeguards Both provisions grant wide powers to the Central Government to modify or exempt provisions of the Act via notifications. While this is necessary for flexibility, it raises concerns about excessive delegation. The requirement to lay notifications before Parliament is a common safeguard, but the absence of express limitations or criteria for modifications could be contentious. Judicial precedents have generally upheld such enabling provisions, provided they are accompanied by adequate safeguards and are not used to override substantive rights or constitutional protections. ....
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....sdictions have experimented with digital or remote tax administration, but the scale and scope of India's faceless scheme are unique. The team-based, dynamic jurisdiction model is particularly innovative, potentially serving as a model for other countries. However, the Indian context-with its diversity, digital divide, and complex taxpayer base-poses unique challenges. The success of Clause 245 will depend on continuous technological upgrades, stakeholder engagement, and robust grievance redressal mechanisms. Conclusion Clause 245 of the Income Tax Bill, 2025, represents a decisive step towards modernizing tax administration in India. Building on the foundation laid by Section 130 of the Income-tax Act, 1961, it institutionalizes fac....