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TMI Blog2024 (7) TMI 1191X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent No. 4 from proceeding ahead in pursuance to the intimation dated 21.06.2024 (Annexure P-4) as the initiation of proceedings by Respondent No. 3 by issuing Notice under Section 148 dated 28.03.2024 (Annexure P-2) is without jurisdiction as Respondent No. 3 could not have issued Notice under Section 148 after the introduction of E-Assessment Faceless Scheme and also for the reason that no reasoning has been assigned as to why the case of the petitioner is selected for proceedings under Section 148; (ii) For the issuance of a writ in the nature of certiorari for quashing the Approval dated 22.03.2024 (Annexure P-3) accorded by Respondent No.2 under Section 151 of the Act ibid having been issued without due application of mind and without disclosing any information to the petitioner on the basis of which the proceedings in question have been initiated; and (iii) In the interregnum, further proceedings in pursuance to the notice dated 28.03.2024 (Annexure P-2) issued by Respondent No. 3 may be stayed; and (iv) Issuance of any other appropriate writ, order or direction, which this Hon'ble Court may deem fit and proper in the circumstances of the case. 3. The bri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctional Assessing Officer without considering office memorandum dated 20.02.2023 issued by Central Board of Direct Taxes (for short 'CBDT'). The Jurisdictional Assessing Officer in terms of circular dated 19.01.2024 issued by Directorate of Income Tax (Systems) can issue notice under Section 148. Calcutta High Court in 'Triton Overseas Private Limited Vs. Union of India (2023) 156 taxmann.com 318 (Calcutta)' has formed an opinion contrary to opinion of other High Courts. The respondent vide SLP (Civil) Diary No. 2041/2024 has assailed judgment of Telangana High Court before Supreme Court which has issued notice to opposite side. 7. We have heard the arguments of learned counsel for both sides and perused the record with their able assistance. 8. The conceded position emerging from the record is that the petitioner has filed his return within stipulated time. JAO has issued notice under Section 148. The said notice has been issued after obtaining prior approval from Principal Commissioner of Income Tax. The respondent has further intimated the petitioner that his assessment would be completed in accordance with procedure prescribed under Section 144B. A detailed procedure of facel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso in direct contravention to the directives issued by the Hon'ble Supreme Court in the case of Ashish Agarwal, supra. 36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent-Department is neither tenable, nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under section 147 and 148 would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically." 10. A Single Bench of Calcutta High Court in Triton Overseas (P.) Ltd. (Supra) relying upon office memorandum dated 20.02.2023 issued by CBDT, dismissed the petition assailing notice issued under Section 148 by JAO. It is apt to notice here that Calcutta High Court without testing contents of office memorandum vis-à-vis mandatory provisions dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar issue came up for consideration before a Division Bench of Bombay High Court in Hexaware Technology Ltd.(Supra) which vide judgment dated 03.05.2024 discussed the issue at length and held that notice under Section 148 after introduction of Finance Act, 2021, cannot be issued by Jurisdictional Assessing Officer. It is apt to mention here that Bombay High Court noticed order dated 13.09.2023 passed by Calcutta High Court as well as office memorandum issued by CBDT. The relevant extracts of judgment passed by Bombay High Court are reproduced as below:- "20. After hearing all the counsels, the following issues came up for consideration: (1) (2) and (3) xxx xxx xxx (4) Whether the impugned notice dated 27th August 2022 is invalid and bad in law being issued by the JAO as the same was not in accordance with Section 151A of the Act? 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrect 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 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 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 app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 151A of the Act read with the Scheme dated 29th March 2022 the notices issued by the JAOs are invalid and bad in law. We are also of the same view. 12. The issue involved came up for consideration before a Single Judge Bench of Gauhati High Court in Ram Narayan Sah (Supra). The Court expressed the same opinion as was formed by Telangana and Bombay High Courts. As per 1961 Act, every assessee has to file annual return disclosing its total income, taxable income and tax liability. In case Assessing Officer disagrees with the disclosed income, he has right to re-assess tax liability of the assessee. Re-assessment cannot be made without granting opportunity to the assessee. The opportunity is granted by way of issuing notice followed by personal hearing. Section 147, 148 and 148A contemplate procedure of reassessment. Section 144B prescribes procedure of self assessment. Section 151A provides that assessment of escaped income shall be made faceless. The concept of self assessment has been introduced w.e.f. 01.04.2021. The object of faceless assessment is to eliminate interface between the Income Tax Authority and assessee to the extent feasible. There are further objects as e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing 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. Explanation 2.-For the purposes of this section, where,- (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under sub-section (2A) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scaping Assessment Scheme, 2022 which is reproduced as below:- "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 optimize 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 of the Scheme. 3. For the purpose of this Scheme,-- (a) assessment, reassessment or recomputation under section 147 of the Act, (b) issuance of notice under section 148 of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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