TaxTMI 
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2026 (2) TMI 266
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....PECIAL CIVIL APPLICATION NO. 8201 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8202 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8203 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8206 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8211 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8231 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8243 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8245 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8255 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8277 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8317 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8474 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8476 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8477 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8480 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8482 of 2022 C/SCA/9909/2022 ORDER DATED: 17/09/2025, R/SPECIAL CIVIL APPLICATION NO. 8483 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8485 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8487 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8488 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8511 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8519 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8529 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8582 of 2022, R/SPECIAL CIVIL APPLICATION NO. 8583 of 2022, R/SPECIAL CIV....
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....4 of 2022, R/SPECIAL CIVIL APPLICATION NO. 21671 of 2022, R/SPECIAL CIVIL APPLICATION NO. 22394 of 2022, R/SPECIAL CIVIL APPLICATION NO. 22395 of 2022, R/SPECIAL CIVIL APPLICATION NO. 22421 of 2022, R/SPECIAL CIVIL APPLICATION NO. 22945 of 2022, R/SPECIAL CIVIL APPLICATION NO. 23328 of 2022, R/SPECIAL CIVIL APPLICATION NO. 23768 of 2022, R/SPECIAL CIVIL APPLICATION NO. 23928 of 2022, R/SPECIAL CIVIL APPLICATION NO. 24683 of 2022, R/SPECIAL CIVIL APPLICATION NO. 24688 of 2022, R/SPECIAL CIVIL APPLICATION NO. 24690 of 2022, R/SPECIAL CIVIL APPLICATION NO. 25456 of 2022, R/SPECIAL CIVIL APPLICATION NO. 25457 of 2022, R/SPECIAL CIVIL APPLICATION NO. 25459 of 2022, R/SPECIAL CIVIL APPLICATION NO. 25472 of 2022, R/SPECIAL CIVIL APPLICATION NO. 25926 of 2022, R/SPECIAL CIVIL APPLICATION NO. 26021 of 2022, R/SPECIAL CIVIL APPLICATION NO. 26022 of 2022, R/SPECIAL CIVIL APPLICATION NO. 26199 of 2022, R/SPECIAL CIVIL APPLICATION NO. 26201 of 2022, R/SPECIAL CIVIL APPLICATION NO. 26249 of 2022, R/SPECIAL CIVIL APPLICATION NO. 214 of 2023, R/SPECIAL CIVIL APPLICATION NO. 352 of 2023, C/SCA/9909/2022 ORDER DATED: 17/09/2025 R/SPECIAL CIVIL APPLICATION NO. 422 of 2023, R/SPECIAL CIVIL APPLICATION....
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.... R/SPECIAL CIVIL APPLICATION NO. 10164 of 2023, R/SPECIAL CIVIL APPLICATION NO. 10229 of 2023, C/SCA/9909/2022 ORDER DATED: 17/09/2025 R/SPECIAL CIVIL APPLICATION NO. 10319 of 2023, R/SPECIAL CIVIL APPLICATION NO. 10465 of 2023, R/SPECIAL CIVIL APPLICATION NO. 10531 of 2023, R/SPECIAL CIVIL APPLICATION NO. 10815 of 2023, R/SPECIAL CIVIL APPLICATION NO. 10837 of 2023, R/SPECIAL CIVIL APPLICATION NO. 10856 of 2023, R/SPECIAL CIVIL APPLICATION NO. 10867 of 2023, R/SPECIAL CIVIL APPLICATION NO. 11130 of 2023, R/SPECIAL CIVIL APPLICATION NO. 11163 of 2023, R/SPECIAL CIVIL APPLICATION NO. 11208 of 2023, R/SPECIAL CIVIL APPLICATION NO. 11262 of 2023, R/SPECIAL CIVIL APPLICATION NO. 11274 of 2023, R/SPECIAL CIVIL APPLICATION NO. 11319 of 2023, R/SPECIAL CIVIL APPLICATION NO. 11324 of 2023, R/SPECIAL CIVIL APPLICATION NO. 11325 of 2023, R/SPECIAL CIVIL APPLICATION NO. 11334 of 2023, R/SPECIAL CIVIL APPLICATION NO. 11341 of 2023, R/SPECIAL CIVIL APPLICATION NO. 11416 of 2023, R/SPECIAL CIVIL APPLICATION NO. 11617 of 2023, R/SPECIAL CIVIL APPLICATION NO. 12106 of 2023, R/SPECIAL CIVIL APPLICATION NO. 12131 of 2023, R/SPECIAL CIVIL APPLICATION NO. 12314 of 2023, R/SPECIAL CIVIL APPLICATION NO.....
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.... NO. 9415 of 2024, R/SPECIAL CIVIL APPLICATION NO. 9507 of 2024, R/SPECIAL CIVIL APPLICATION NO. 9615 of 2024, R/SPECIAL CIVIL APPLICATION NO. 9621 of 2024, R/SPECIAL CIVIL APPLICATION NO. 9622 of 2024, R/SPECIAL CIVIL APPLICATION NO. 9667 of 2024, R/SPECIAL CIVIL APPLICATION NO. 9674 of 2024, R/SPECIAL CIVIL APPLICATION NO. 9731 of 2024, R/SPECIAL CIVIL APPLICATION NO. 9738 of 2024, R/SPECIAL CIVIL APPLICATION NO. 9810 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10060 of 2024 C/SCA/9909/2022 ORDER DATED: 17/09/2025, R/SPECIAL CIVIL APPLICATION NO. 10121 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10143 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10154 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10220 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10222 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10418 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10522 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10568 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10597 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10698 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10734 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10797 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10806 of 2024, R/SPECIAL CIVIL APPLICATION NO. 10808 of 2024, R/SPECIAL CIVIL APPLIC....
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....89 of 2024, R/SPECIAL CIVIL APPLICATION NO. 13896 of 2024, R/SPECIAL CIVIL APPLICATION NO. 13902 of 2024, R/SPECIAL CIVIL APPLICATION NO. 13918 of 2024, R/SPECIAL CIVIL APPLICATION NO. 13922 of 2024, R/SPECIAL CIVIL APPLICATION NO. 13942 of 2024, R/SPECIAL CIVIL APPLICATION NO. 13946 of 2024, R/SPECIAL CIVIL APPLICATION NO. 13947 of 2024, R/SPECIAL CIVIL APPLICATION NO. 13961 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14022 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14024 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14069 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14092 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14189 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14237 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14292 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14296 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14355 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14364 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14365 of 2024 C/SCA/9909/2022 ORDER DATED: 17/09/2025, R/SPECIAL CIVIL APPLICATION NO. 14368 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14404 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14446 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14496 of 2024, R/SPECIAL CIVIL APPLICATION NO. 14579 of 2024, R/SPECIAL CIVIL APPL....
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....CIAL CIVIL APPLICATION NO. 2711 of 2025, R/SPECIAL CIVIL APPLICATION NO. 3171 of 2025, R/SPECIAL CIVIL APPLICATION NO. 3862 of 2025, R/SPECIAL CIVIL APPLICATION NO. 6468 of 2025, R/SPECIAL CIVIL APPLICATION NO. 10749 of 2025, R/SPECIAL CIVIL APPLICATION NO. 11484 of 2025, R/SPECIAL CIVIL APPLICATION NO. 11499 of 2025, R/SPECIAL CIVIL APPLICATION NO. 12129 of 2025, R/SPECIAL CIVIL APPLICATION NO. 12138 of 2025, R/SPECIAL CIVIL APPLICATION NO. 12162 of 2025, R/SPECIAL CIVIL APPLICATION NO. 6054 of 2024, R/SPECIAL CIVIL APPLICATION NO. 9937 of 2024. Appearance: For the Petitioners: Mr S.N. Soparkar, Ld. Sr. Adv With Mr B S Soparkar(6851), Mr. Tushar Hemani, Ld. Sr. Adv With Ms. Vaibhavi Parikh And Mr. Parimalsinh Parmar, Mr. R.K. Patel, Ld. Sr. Adv With Mr Darshan Patel, Mr. S.N. Divatia, Mr Darshan Gandhi, Mr. Hardik Vora With Ms. Palak Kshatriya, Mr. Manish Shah, Mr. Krutarth Desai, Mr Ketan Shah, Mr Dhinal Shah, Mr Rahul Hakani With Mr. Shyamal Bhimani, Mr Jaimin Dave, Mr Ashutosh Dave And Mr. Hiren Trivedi In The Respective Petitions. For the Respondent: Mr. Varun K. Patel (3802) With Mr. Dev D. Patel, Mr. Karan G. Sanghani, Mr Rudram Trivedi for Mrs Kalpana Raval And Mr.....
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....al Assessing Officer under Section 148 of the Act instead of Faceless Assessing Officer in view of the Scheme, 2022. 5. Learned advocates for the petitioners mainly relied upon the decision of the Bombay High Court in case of Hexaware Technologies Ltd. Versus Assistant Commissioner of Income- tax reported in [2024] 162 taxmann.com 225 (Bombay) holding that the notice issued by the Jurisdictional Assessing Officer after 01.04.2022 is without jurisdiction in view of the provisions of the Scheme, 2022. 6. It was also brought to the notice of the Court that being aggrieved by the decision of the Hon'ble Bombay High Court, the Revenue has preferred the Special Leave Petition before the Hon'ble Apex Court which is pending and therefore, these petitions were admitted and kept pending for the decision, if any, which may be rendered by the Hon'ble Apex Court. 7. It was also brought to the notice of the Court that there are about ten decisions on the issue of jurisdiction of the Jurisdictional Assessing Officer to issue notice under Section 148 of the Act available as on today rendered by the various Hon'ble High Courts either in favour of the assessee or against the assessee and si....
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....y notification issued under sub-section (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament. (ii) NOTIFICATION S.O.1466 (E) [NO. 18/2022/F.NO. 370142/16/2022-TPL(PART1], DATED 29-3-2022:- In exercise of the powers conferred by sub-sections (1) and (2) of section 151A of the Income- tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme, namely:- Short title and commencement 1. (1) This Scheme may be called the e- Assessment of Income Escaping Assessment Scheme, 2022. (2) It shall come into force with effect from the date of its publication in the Official Gazette. Definitions 2.(1) In this Scheme, unless the context otherwise requires, - (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 Ac....
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....initions. 2.(1) In this Scheme, unless the context otherwise requires, - (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. Scope, Powers and Performance of functions of income-tax authorities. 3. 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 ....
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....s and performance of the functions by all or any of the other income-tax authorities who are subordinate to it. (3) In issuing the directions or orders referred to in sub-sections (1) and (2), the Board or other income-tax authority authorised by it may have regard to any one or more of the following criteria, namely :- (a) territorial area; (b) persons or classes of persons; (c) incomes or classes of income; and (d) cases or classes of cases. (vi) Section 124:- Jurisdiction of Assessing Officers (1) Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction- (a) in respect of any person carrying on a business or profession, if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, and (b) in respect of any other person residing within the area. ....
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....r sub-section (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament. (ix) F No. 187/3/2020-ITA-I Government of India Ministry of Finance Department of Revenue (Central Board of Direct Taxes) ***** North Block, New Delhi Dated, the 6th September, 2021 ORDER Subject:- Order under section 119 of the Income-tax Act, 1961 (the Act) providing exclusions to section 144B of the Act. The Faceless Assessment Scheme, 2019 (the Scheme) has been incorporated in the Act vide the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Section 144B of the Act pertaining to Faceless Assessment has been inserted by the said amendment w.e.f. 01.04.2021. 2. The Central Board of Direct Taxes vide Order F.No. 187/3/2020-ITA-I dated 13th August, 2020 (the Order) read with order under section 119 of the Act regarding mutatis mutandis application of Orders, Circulars etc. issued in order to implement the Scheme to Faceless Assessment u/s 144B of the Act, F.No. 187/3/2020-ITA-1 dated 31st March, 2021 directed that all the A....
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....aid Schedule, shall exercise the powers and functions of Assessing Officers concurrently, to facilitate the conduct of Faceless Assessment proceedings under section 144B of the said Act, in respect of all persons or class of persons, or incomes or class of incomes, or cases or class of cases in the territory of India, excluding the persons or class of persons, or incomes or class of incomes, or cases or class of cases covered by the Notification No. 57/2014 bearing S.O. 2814(E), dated the 3rd November, 2014 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) or by the Notification No. 70/2014 bearing S.O, 2915(E), dated the 13th November, 2014 published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (ii) (xi) F.NO 225/135/2021/ITA.-II Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes *************** North Block, New Delhi Dated 10th December, 2021 To, All Principal Chief Commissioners of Income Tax, All Chief Commissioners of Income Tax Madam/Sir Subject: Instructions under section 11....
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.... u/s 143(2)/142(1) of the Act calling for information by the Jurisdictional Assessing Officer concerned. (subject to para 4.2) (ii) Cases other than search & seizure/survey: (a) For those cases which are to be completed by NaFAC on or before 31.03.2025. Jurisdictional Assessing Officers (JAOs) shall upload the underlying documents, on the basis of which notice u/s 148 was issued, on ITBA, for access by NaFAC. The Directorate of Income-tax (Systems) shall forward these cases to NaFAC, which will take further necessary action. Notice us 143(2)/142(1) of the Act calling for information shall be served on the assessee through NaFAC. (For Assessing Officers in International Taxation and Central, Circle charges: refer Para 4.1 at Page No. 5) Submissions on behalf of the petitioners: 10.1. Learned Senior Advocate Mr. Tushar Hemani for the petitioners, at the outset, submitted that the issue is squarely covered in favour of the petitioners as per the decision of the Hon'ble Bombay High Court in case of Hexaware Technologies Ltd. Versus Assistant Commissioner of Income-tax reported in [2024] 162 taxmann.com 225 (Bombay) and the decision of ....
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....078 (Madras), the Hon'ble Single Judge of the Hon'ble Madras High Court referred the matter to the Larger Bench and the Larger Bench in the decision in case of TVS Credit Services (Supra) has followed the Bombay High Court by allowing the reference by order dated 24th June, 2025. 10.3. Learned Senior Advocate Mr. Tushar Hemani referred to and relied upon paragraph No. 26 of the decision of the Hon'ble Apex Court in case of Union of India versus Rajeev Bansal reported in [2024] 167 taxmann.com 70 (SC) to canvass the proposition of law that the assessment is a quasi-judicial function, which reads as under: "26. An assessment acquires finality on the making of an assessment order by the assessing officer. It creates a vested right in favour of the assessee. Section 2(8) of the Income Tax Act defines "assessment" to include reassessment. Reassessment is nothing but a fresh assessment. The effect of reopening the assessment is to vacate or set aside the order of assessment and to substitute in its place the order of reassessment. The procedure of reassessment of tax is quasi-judicial because it prejudicially affects the vested rights. Justice H R Khanna, speaking for a Bench....
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....e, which are necessary to the exercise of its jurisdiction. There cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment. An order passed without jurisdiction is a nullity. Any consequential order passed or action taken will also be invalid and without jurisdiction. Thus, the power of assessing officers to reassess is limited and based on the fulfillment of certain preconditions. 35. It is a well-accepted rule of construction that in situations where the interpretation of taxing legislation is ambiguous or leads to two possible interpretations, the interpretation most beneficial to the subject of the tax should be adopted. It would not be an unjust result if a taxpayer escapes the tax net on account of the legislature's failure to express itself clearly. 10.5. It was therefore submitted that quasi- judicial function of an Assessing Officer requires finality on the making of an assessment order which created vested right in favour of the assessee and re-assessment is nothing but a fresh assessment. It was pointed out that the effect of reopening the assessment is to vacate or set-aside the order of assessm....
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....e, 2022" placed at Page No. 339 of the compilation, it appears that some of the Hon'ble Courts took the view that the words "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" used under Clause 3 of the Scheme suggests that the Scheme only applies to faceless assessment or reassessment under Section 144B of the Act and not for issuance of notice under Section 148 of the Act, as such procedure is not prescribed under Section 144B of the Act. 10.9. Learned Senior Advocate Mr. Tushar Hemani submitted that the reference to Section 144B of the Act is made since it specifies the general "faceless manner" in which, proceedings are to be conducted. It was submitted that there is no specific requirement to make an altogether different Section for each "faceless proceeding" under the Act when there is a specific Section in the statute providing comprehensive faceless procedure which can also be made applicable to other faceless proceedings under the Act and as Section 144B of the Act provides the "faceless manner" for "assessment, reassessment or recomputation", the comprehensive ....
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.... the assessee. 10.11. Referring to the above, learned Senior Advocate Mr. Tushar Hemani submitted that though each and every requirement specified in the procedure under Section 144B of the Act is not applicable while conducting proceedings under Section 148A of the Act and issuing notice under Section 148 of the Act, such procedure shall be applied "to the extent provided" in order to achieve the object of the Parliament of promoting "transparency" in various proceedings conducted under the Act by "eliminating the interface between the Income Tax Authority and assessee". 10.12. Learned Senior Advocate Mr. Tushar Hemani therefore referred to Section 144B of the Act and submitted that it covers both Section 147 and Section 148 of the Act and it starts with a non-obstante clause. It was submitted that Section 144B of the Act also refers to methodology of issuance of the notice under Section 143(2) and Section 142(1) of the Act and therefore, when the legislation is provided under the Scheme, 2022 covering the issuance of notice under Section 148 of the Act in a faceless manner, the Jurisdictional Assessing Officer has no jurisdiction to issue the notice under Section 148 of the....
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....llenging the judgements of various High Courts whereby the notice under section 148 of the unamended Act were set aside by the High Courts, the Hon'ble Supreme Court has only permitted the Union of India to proceed further with the reassessment proceedings under the amended provision of law, more particularly, as amended by the Finance Act, 2021. It never intended the authorities concerned to continue with the proceedings from the stage of the issuance of notices under section 140, nor is the directions to that effect. And there cannot be any confusion, ambiguity or misconception for the respondent-Department to have in this regard. 31. It is well settled principle of law that where the power is given to do certain things in certain way, the thing has to be done in that way alone and no any other manner which is otherwise not provided under the law." 10.14. Referring to the above observations of Hon'ble the Telangana High Court, reliance was placed on the conclusion arrived at in paragraph No. 35 of the said decision, which reads as under : "35. In view of the aforesaid discussions, it is by now very clear that the procedure to be followed by the respondent....
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....e 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 29th March 2022 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 FAO as per the said Scheme, we express our view as follows:- 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 i....
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....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 in Section 144B of the Act, such as keeping the International Tax Jurisdiction or Central Circle Jurisdiction out of the ambit of Section 144B of the Act would also apply under the Scheme. Further the exceptions provided in sub-section (7) and (8) of Section 144B of the Act would also be applicable to the Scheme. 37. When an authority acts contrary to law, the said act of the Authority is required to be quashed and set aside as invalid and bad in law and the person seeking to quash such an action is not required to establish prejudice from the said Act. An act which is done by an authority contrary to the provisions of the statue, itself causes prejudice to assessee. All assessees are entitled to be assessed as per law and by following the procedure prescribed by law. Therefore, when the Income-tax Authority proposes to take action ag....
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....se to the Jurisdictional Assessing Officer. Reference was made to the Notification dated 6th September, 2021 issued by the CBDT where the cases assigned to Central Charges and International Tax Charges were excluded from the faceless assessment procedure. It was also pointed out that when it was thought fit by the CBDT, assessment orders in the cases where pendency could not be created on ITBA because of technical reasons or cases not having a PAN were to be conducted by the Jurisdictional Assessing Officer. 10.19. Learned Senior Advocate Mr. Tushar Hemani also referred to the Notification No. S.O. 2693 (E) dated 10th June, 2022 to point out that Assessing Officers referred therein, comprise all the Officers of the Department and by this Notification, the CBDT has issued direction that Income-tax Authorities of Units specified in Column (2) of the Schedule of the Notification, having their headquarters at the places mentioned in Column (3) of the Schedule of the Notification, shall exercise the powers and functions of the Assessing Officers concurrently, to facilitate the conduct of faceless assessment proceedings under Section 144B of the Act. It was therefore submitted that on....
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....ction of the case for re-opening is contrary to the Scheme, 2022, as the Scheme, 2022 is required to be read as a whole so as to implement the legislative intention to conduct the proceedings in a faceless manner. It was submitted that on plain reading of the Scheme, 2022, as it is having an unambiguous language, it is clear that there cannot be an another interpretation so as to come to the conclusion that the Jurisdictional Assessing Officer has also a jurisdiction to issue a notice under Section 148 of the Act, contrary to the Scheme which provides for issuance of notice in a faceless manner by automated allocation in accordance with the Risk Management Strategy formulated for issuance of notice under Section 148 of the Act as well as procedure to the extent provided under Section 144B of the Act with reference to the assessment or re-assessment of the assessee. 10.23. It was further submitted that the guidelines issued for each Assessment Year provide for selection of the cases in a faceless manner and in the case of initiation of the re-opening proceedings under Section 147 of the Act, the case is required to be mandatorily allocated to the NFAC for issuance of the notice i....
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....tice, and in a faceless manner, to the extent provided in section 144B of the Act with reference to making assessment or reassessment or total income or loss of the assessee. 10. On a plain reading of paragraph 3, it is clear to us that the provision of Section 148A would also fall within the ambit/scope of the Scheme. All aspects pertaining to 'assessment', 're- assessment' or 're-computation' under Section 147 of the Act and issuance of notice under Section 148 of the Act, are to be undertaken through automated allocation, in accordance with risk management strategy formulated by the Board, as provided for in Section 148 of the Act for issuance of notice, and in a faceless manner, to the extent provided under Section 144B of the Act, in making assessment or reassessment of total income or loss of assessee. 13. It is thus clear from the implications as brought about by the provisions of Section 151A that the notification dated 29th March, 2022 is issued in terms of what has been provided under Section 151A. It has been issued after the amendments were incorporated in sub-section (1) by Finance Act, 2021 with effect from 1 April, 2022. It w....
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.... specifically exclude the application of Section 148A from the scope of the Scheme in paragraph 3 of the notification dated 29th March, 2022, it would hence be not be possible to accept the Revenue's contention that the provision of Section 148A stands excluded from the applicability of the faceless mechanism." 10.25. It was therefore submitted that the main object of introduction of the faceless regime is to conduct the proceedings in a transparent manner and if the contention of the Revenue is accepted that the issuance of notice under Section 148 for re-opening of the assessment by the Jurisdictional Assessing Officer is not covered by the Scheme, 2022, the very purpose of the Scheme to make the proceedings transparent would be frustrated. Learned Senior Advocate Mr. Tushar Hemani further referred to and relied upon the decision of Hon'ble the Apex Court in case of Bansal Wire Industries Limited and Another versus State of Uttar Pradesh and Others reported in (2011) 6 Supreme Court Cases 545 wherein, the Hon'ble Apex Court, while considering the provisions of Section 2(c) read with Section 14 of the Central Sales Tax Act, 1956, referred to and relied upon the decision in ....
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....ss Assessing Officer. 11.2. Learned advocate Mr. Manish Shah referred to and relied upon the decision of the Hon'ble Apex Court in case of Sandur Micro Circuits Limited versus Commissioner of Central Excise, Belgaum reported in (2008) 14 Supreme Court Cases 336 wherein, the Hon'ble Apex Court while considering the effectiveness of the Circular, contrary to the Notification statutorily issued, has held that the Circular cannot take away the effect of the Notification statutorily issued and it was further held by the Hon'ble Apex Court that by issuing a Circular a new condition thereby restricting the scope of the exemption or restricting or whittling it down cannot be imposed. 11.3. Learned advocate Mr. Manish Shah placed reliance upon the aforesaid decision and submitted that the Guidelines, provided by the CBDT for scrutiny of the assessment referring to Jurisdictional Assessing Officer whereby, the reference is made to the Jurisdictional Assessing Officer for uploading of the information up to the issuance of the notice under Section 148 of the Act, cannot be considered to nullify or whittling down the Notification of the E-Assessment of Income Escaping Assessment Scheme, 2....
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....ssessing Officer has jurisdiction to issue the notice under Section 148 of the Act. 13.1. Learned advocate Mr. S.N. Divatia for the petitioners referred to and relied upon the introduction of the e-assessment proceedings under the Income Tax Act since 2019. It was submitted that on 12th September, 2019, the E- Assessment Scheme, 2019 was made applicable to regular assessment under Section 143(3) [417 ITR 12 (st)] and thereafter, Faceless Assessment schemes applicable to all except search and non-resident assessments was introduced by Notification dated 13th August, 2020. It was submitted that thereafter, by TOLA, 2020, Section 144B was introduced from 01.04.2021, applicable to assessments under Section 143(3) and 144 except search and other relocated cases. 13.2. Learned advocate Mr. S.N. Divatia thereafter referred to the faceless assessments brought on statute by the Finance Act, 2022 applicable to all assessment proceedings except search cases and cases under Section 142(2A) of the Act and other relocated cases by amending Section 144B(1) [442 ITR 91(st)]. 13.3. It was submitted that thereafter, the new regime of re-assessment under Section 147 of the Act was introduced....
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....through automated allocation which means that the same is mandatory for the Department to follow. 13.6. Reference was made to the definition of "automated allocation" in paragraph No. 2(b) of the Scheme, 2022 meaning thereby that an algorithm for randomised allocation of the cases by using suitable technological tools like artificial intelligence and machine learning. 13.7. Learned advocate Mr. S.N. Divatia referring to the aforesaid decision of Hon'ble the Bombay High Court in case of Hexaware Technologies Limited (Supra) distinguished the decision of Hon'ble the Delhi High Court in case of T.K.S. Builders (P.) Ltd (Supra) wherein, it is held that the Act does not distinguish between the Jurisdictional Assessing Officer or NFAC Centre with respect to the jurisdiction over a case in view of the Circular issued by the CBDT on 13.08.2020 which provides that both the Jurisdictional Assessing Officer and the Faceless Assessing Officer would have concurrent jurisdiction in the sense that the Faceless Assessing Officer will have jurisdiction over any case assigned to it from whole of the Country to make assessment to the extent provided under Section 144B of the Act and that the No....
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....ficers will be randomly selected so as to conduct the proceedings and it is not merely a case where the notice is to be issued through an automated allocation. It was submitted that the term "an algorithm for randomised allocation of cases" in the definition would mean something which is chosen by chance rather than according to a plan and therefore, the cases are chosen based on the Risk Management Strategy formulated by the Board for the purpose of issuance of the notice under Section 148 of the Act which is in accordance with the Explanation 1 to Section 148 of the Act. 13.10. It was therefore submitted that the evaluation of the faceless scheme under the Act is considered than earlier E-Assessment Scheme, 2019 which was applicable only to regular assessments under Section 143(3) of the Act or best judgment assessment under Section 144 of the Act selected on a pilot bases which was replaced by the Faceless Assessment Scheme, 2020 wherein, all assessments specified except non-resident and search cases were covered, whereas, Section 144B of the Faceless Assessment Scheme, 2022 introduced under TOLA Act, 2020 is now applicable to all assessments excluding search cases and other ....
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....ction 151A of the Act, which has come into effect from 01.11.2020 as inserted by the TOLA, 2020, the Central Government has granted powers to make a scheme by notification in Official Gazette for the functions which are prescribed in clauses (a) to (c) so as to eliminate interface between the Income-tax Authority and the assessee or any other person to the extent technologically feasible and to optimise utilisation of the resources through economies of scale and functional specialisation and to introduce a team-based assessment, re-assessment, recomputation or issuance or sanction of notice with dynamic jurisdiction. Reference was also made to Sub-section (2) of Section 151A of the Act which also provides powers to the Central Government to cow out an exception to the applicability of the Notification which may be issued under Sub-section (1) of Section 151A of the Act along with a timeline to issue the Notification on or before 31st March, 2022. It was also pointed out that Sub-section (3) of Section 151A of the Act provides that every notification issued under Sub-sections (1) and (2) of Section 151A of the Act, to be laid before each House of the Parliament. 14.3. Referring t....
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....d under the provisions of Section 144B of the Act for issuance of the notice under Section 148 of the Act and therefore, only the assessment, re-assessment and recomputation under Section 147 of the Act is required to be conducted in a faceless manner to the extent provided under Section 144B of the Act with a reference to make assessment and re-assessment of total income or loss of the asseesse. It was submitted that on perusal of Section 144B of the Act entirely, it appears that it only refers to automated allocation of the cases for assessment and re-assessment to the Faceless Assessing Officers and thereafter, to issue the notice for assessment proceedings under Sections 142(1) and 143(2) of the Act in a faceless manner so as to maintain the transparency of the assessment proceedings as provided under Section 144B of the Act. 14.6. It was further submitted that the phrase "to the extent provided under Section 144B of the Act with reference to making assessment or re-assessment of total income of the assessee or loss of assessee" is required to be strictly construed to mean that the procedure prescribed under Section 144B of the Act, so far as it relates to assessment and rea....
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....Scheme, 2022 made by the CBDT. 14.10. It was submitted that paragraph No. 3 of the Office Memorandum refers to the scope of the Scheme, 2022 for issuance of notice under Section 148 of the Act and thereafter, assessment, reassessment or recomputation under Section 147 of the Act is to be carried out. It was submitted that Hon'ble the Bombay High Court has mixed up the issue of notice under Section 148 with assessment, reassessment and recomputation under Section 147 of the Act by making observations in paragraph No. 38 of the said decision. It was submitted that the Revenue has not misinterpreted the Scheme, 2022 because it is the same authority, who has issued the Office Memorandum and therefore, the misinterpretation of the Scheme, 2022 is beyond comprehension. 14.11. It was submitted that as per the Office Memorandum, the notice is only to be issued through automated allocation and thereafter, the proceedings for assessment, reassessment and recomputation under Section 147 of the Act are to be conducted under faceless manner to the extent as provided under Section 144B of the Act with reference to the assessment and reassessment. 14.12. It was submitted that the thrust ....
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.... of convenience and of meaningfulness, yet, a more thoughtful use of commas and other gadgets of punctuation would have helped make the meaning of the clause clear beyond controversy. Besides, how far a clause which follows upon a comma governs every clause that precedes the comma is a matter not free from doubt. I, therefore, consider it more safe and satisfactory to discover the true meaning of clause (c) by having regard to the substance of the matter as it emerges from the object and purpose of the Act, the context in which the expression is used and the consequences necessarily following upon the acceptance of any particular interpretation of the provision, the contravention of which is visited by penal consequences. 6. Commas or no commas, and howsoever thoughtfully one may place them if they are to be there, I find it impossible to take clause (c) to mean that any and every activity "for the making of quick or easy money" is comprehended within its scope. For the matter of that, I cannot believe any law to ban every kind of activity for making quick or easy money, without more, on pain of penal consequences. It is far too vague and arbitrary to prescribe that "whoso....
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....ame are placed both for matter of convenience and for meaningfulness. It was therefore submitted that the interpretation made by the petitioners that words "and in a faceless manner" would also apply to issue of notice under Section 148 of the Act, is not intended by the legislature as there is no mechanism provided under Section 144B of the Act to issue notice under Section 148 of the Act and therefore, the words "and in faceless manner" have to be read with following words to the extent provided under Section 144B of the Act which provides procedure for making assessment or reassessment of the total income or losses of the assessee to be conducted in a faceless manner. It was therefore submitted that the contention raised by the petitioners is contrary to the Scheme, 2022. 14.16. Learned advocate Mr. Varun Patel also referred to and relied upon the decision of the Hon'ble Apex Court in case of Kantaru Rajeevaru Versus Indian Young Lawyers Association reported in (2020) 9 Supreme Court Cases 121 wherein, the Hon'ble Apex Court considered the provisions of the Order 47 Rule 1 of the Code of Civil Procedure, which provides for review of the Judgment/Order of the Court as referred....
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....nd jurisdiction of the Assessing Officer as per Section 124 of the Act having the same convocations of automated allocations to the extent provided under Section 144B of the Act with reference to making faceless assessment of total income or loss of the assessee and other Schemes, which provides for faceless proceedings and for appeal, penalty, e-verification, e-settlement, e-advance ruling etc. It was therefore submitted that the intention of the legislature is clear that whenever it requires the faceless proceedings, the same are specified in the Scheme itself, whereas, in the facts of the case, the proceedings under Section 148A of the Act is not at all prescribed in the Scheme, 2022 and it refers only to issuance of notice through automated allocation and in the assessment proceedings, there is no provision for issuance of notice under Section 144B of the Act. 14.19. It was therefore submitted that the decision in case of the Hexaware Technologies Ltd. (Supra) rendered by Hon'ble the Bombay High Court as well as the decisions of the other Hon'ble High Courts following the said decision are under challenge before the Hon'ble Apex Court and considering the submissions made bef....
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....ed by the Finance Act, 2022 with effect from 01.04.2022. Prior to its substitution, Sub-section (1) of Section 144B of the Act provides for the assessment under Section 143(3) and under Section 144 of the Act only and there was no reference to the reassessment or recomputation under Section 147 of the Act. As per clause (i), the procedure is prescribed for "assessment in a faceless manner" provides that National Faceless Assessment Centre shall assign the case selected for the purpose of faceless assessment under this Section to a specified assessment unit through an automated allocation system. Prior to 01.04.2022, the clause (i) only provides that the National Faceless Assessment Centre shall serve a notice upon the assessee under Sub-section (2) of Section 143 of the Act. 21. Thus, clause (i) of Section 144B of the Act which has been substituted with effect from 01.04.2022, empowers the National Faceless Assessment Centre to assign a case selected for the purpose of faceless assessment under Section 144B of the Act to a specific assessment unit through an automated allocation system. 22. Clause (ii) of Sub-section (1) of Section 144B of the Act which came into effect from ....
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....ed allocation of cases by using suitable technological tools, including artificial intelligence and machine learning with a view to optimise the use of resources. As far as the words and expressions used in the Scheme, 2022 are as defined in the Act shall have the meaning respectively assigned to them in the Act which means that the words "assessment", "reassessment", "recomputation", "notice" and "faceless manner", as used in the Scheme, 2022 are to be considered as provided in the Act. 25. The scope of the Scheme, 2022 is stated in paragraph No. 3 which is sub-divided into two parts. Clause (a) refers to assessment, reassessment and recomputation under Section 147 of the Act as Section 147 of the Act refers to the assessment of income escaping assessment. Whereas, Clause (b) refers to the issuance of notice under Section 148 of the Act which is prior to the stage of reassessment as to whether the reassessment is to be initiated or not as provided under Section 148 of the Act. 26. The Scheme, 2022 has come into effect from 29th March, 2022 but effectively from 01.04.2022 and as such, the provisions of Section 148 of the Act as it existed on the statute on the said date i.e. ....
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.... (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; or (vi) any information in the case of the assessee emanating from survey conducted under section 133A, other than under sub-section (2A) of the said section, on or after the 1st day of September, 2024. 148A. Procedure before issuance of notice under section 148:(1) Where the Assessing Officer has information which suggests that income chargeable to tax has escaped assessment in the case of an assessee for the relevant assessment year, he shall, before issuing any notice under section 148 provide an opportunity of being heard to such assessee by serving upon him a notice to show cause as to why a notice under section 148 should not be issued in his case and such notice to show cause shall be accompanied by the information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year. ....
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....be, whether the Jurisdictional Assessing Officer or the Assessing Officer of an assessment unit as per Section 144B of the Act. If we peruse Section 144B of the Act, there is no Assessing Officer as such, but it also only refers to the "assessment unit" which comprises of various Assessing Officers. If we peruse clause (i) of Sub-section (1) of Section 144B of the Act, it stipulates that the National Faceless Assessment Centre shall assign the case selected for the purpose of faceless assessment under Section 144B of the Act to a specific "assessment unit" through automated allocation system prior to selection of the case to be allocated to the specific assessment unit through automated allocation system and Section 144B of the Act has no role to play for the purpose of faceless assessment. 29. Therefore, if we read paragraph No.(3) of the Scheme, 2022, which refers to the issuance of the notice through automated allocation in accordance with the Risk Management Strategy formulated by the Board only. The contention on behalf of the petitioners that the issuance of notice also should be in a faceless manner is also required to be considered from the subsequent prefix after the wo....
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....t, the same shall be altered by adding the procedure of discarding which is not intended by the legislature. Therefore, we are of the opinion that the decision of the Bombay High Court in case of Kairos Properties (P.) Ltd. (Supra) wherein, the Scheme, 2022 is also extended to the procedure prescribed in Section 148A of the Act, would amount to alter the Scheme, 2022 itself. 30. The Hon'ble Bombay High Court while considering the provisions of Section 148A of the Act has held that the scope of scheme as defined in paragraph No. 3 by excluding the applicability of Section 148A of Act from the scope of the scheme would lead to an absolute absurdity and would amount to alter the Scheme. In such circumstances, we are with due respect not in agreement with the Bombay High Court to insert the provisions of Section 148A of the Act to be read in the scope of the scheme. Therefore, the logical conclusion which comes that if Section 148A of the Act is not part of the Scheme, 2022, then issuance of notice under Section 148 of the Act by the Faceless Assessing Officer would be an empty formality because issuance of notice under Section 148 of Act is consequence of the order which is passed ....