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TMI Blog2024 (12) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... ally, 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 Section 147 of the IT Act and for issuance of notice under Section 148 of the IT Act. Hence, by ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the said JAO will have no role to play in selection of cases. Subsequently, the notices have been sent to the e-mail id of the registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 guidelines had been issued by the Board, within the power available to them under Section 144B of the IT Act, without touching upon the Scheme and issuance of such guidelines w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in a faceless manner as per the following procedure, namely:- (i) the National Faceless Assessment Centre shall assign the case selected for the purposes of faceless assessment under this section to a specific as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end 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 notice referred toin clause (ix) or such time as may be extended on the basis of an application in this regard, file his response to the National Faceless Assessment Centre which shall forward the same to the assessment unit; (xi) where the assessee fails to file response to the notice served under clause (ix) with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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- clause (a) of clause (xvi) or under clause (xix) to the National Faceless Assessment Centre; (xxi) in case of an eligible assessee, where there is a proposal to make any variation which is prejudicial to the interest of such assessee, as mentioned in sub-section (1) under section 144C, the National Faceless Assessment Centre shall serve the draft order referred to in clause (xx) on the assessee; (xxii) in any ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, after completion of assessment, transfer all the electronic records of the case to the Assessing Officer having jurisdiction over the said case for such action as may be required under the provisions of this Act; (xxxii) if at any stage of the proceedings before it, the assessment unit having regard to the nature and complexity of the accounts, volume of the accounts, doubts about the correctness of accounts, multiplicity of transactions in the accounts or specialised nature of business activity of the assessee, and the interests of the revenue, is of the opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 same through the Automated Allocation System. 12.2 Clause (ii) (a) In terms of Clause (ii) of Sub-Section (1) of Section 144B of the IT Act, the NaFAC shall send intimation/notice to the Assessee stating that the assessment in his/her case shall be completed in accordance with the procedure laid down under Section 144B of the IT Act. 12.3 Clause (iii) (a) In terms of Clause (iii) of the Sub-Section (1) of Section 144B of the IT Act, a notice under Section 143(2) or 142(1) of the IT Act shall be served on the assessee, through NaFAC and the assessee shall file his/her response to such notice, within the date specified therein, to the NaF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return" 14. A reading of the above provisions of Section 142(1) would show that for the purpose of assessment under this Act, the Assessing Officer may serve on any person, who has made returns under Section 115WD or Section 139 or in whose case the time allowed under Sub-Section (1) of Section 139 for furnishing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plete 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 u/s 148 of the Act (i) Cases, where notices u/s 148 of the Act have been issued pursuant to search & seizure/survey actions conducted on or after the 1 day of April, 2021: These cases shall be selected for compulsory scrutiny with prior administrative approval of Pr.CIT/Pr.DIT/CIT/DIT concerned who shall ensure that such cases, if lying outside Central Charges, are transferred to Central Charges u/s 127 of the Act within 15 days of service of notice u/s 143(2)/142(1) of the Act calling for information by the Jurisdictional Assessing Officer concerned. (ii) Cases other than search & seizure/survey: a) For those cases which are to be completed by NaFAC on or before 31.03.2024, Jurisdictional Assessing Officers (JAOs) shall upload the underlying documents, on the basis of wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter, 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 Section 148 or 148A notice, has been alloted by the Directorate of Income Tax (Systems) to the Jurisdictional Assessing Officer based on the PAN jurisdiction by virtue of Automated Allocation System, whereas, the jurisdiction for issuance notice under Section 142(1) or 143(2) has been allotted to the NaFAC based on the automated allocation system to the extent as provided under clause (i) of Sub-Section (1) of Section 144B of the IT Act and subsequent procedure shall be conducted by the Assessing Officer in the manner referred in Section 144B of the IT Act. 23. Further, the Board has taken into consideration with regard to the aspect of obtaining prior approval from the higher authority for issuance of notice under Section 148 of the Act. Though Section 151A mandates the Central Government to bring in a Scheme in this regard, so far, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 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 issuance of show-cause notice or passing of order under section 148A or sanction for issue of such notice under section 151, so as to impart greater efficiency, transparency and accountability by- (a) Eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible. (b) Optimizing utilization of the resources through economies of scale and functional specialization; (c) Introducing a team-based assessment, reassessment, re-computation or issuance or sanction of notice with dynamic jurisdiction. (2) 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 speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igher 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 either Section 144B or Scheme issued on 28.03.2022 and 29.03.2022 empowers them. Therefore, this Court is not is a position to agree with the submissions of the learned counsel for the petitioner on this aspect. 32.Clause (iv) (a) Further, Clause (iv) of Sub-Section (1) of Section 144B of the IT Act deals with the aspect, which enables the assessment unit to obtain such further information or document or evidence from the Assessee or any other person and may make a request to NaFAC to send appropriate notice with regard to the same. (b) Subsequent to the allotment of cases by NaFAC on the basis of Automated Allocation System to the assessment unit, the assessment unit can request NaFAC for any additional information. Therefore, as much as possible the information has been furnished, when the matters are selected and allocated, to the assessment unit. (c) In terms of Clause (i) of Sub-Section (1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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, 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, provided that no direction shall be issued after the 31st day of March, 2022. 36. Thus, Section 151A of the IT Act enables the Central Government to bring separate scheme for the purpose of i) assessment, reassessment or re-computation under section 147 or ii) issuance of notice under Section 148 or iii) conducting of inquiry or issuance of show cause notice or passing of order under Section 148A or iv) sanction for issuance of notice under Section 151. 37. By virtue of the power available under Section 151A of the IT Act, the Central Government has brought a Scheme called "E-Assessment of Income Escaping Assessment Scheme, 2022" (hereinafter called as Scheme) vide notification S.O.1466(E) dated 29.03.2022 and the said e-assessment scheme is extracted h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uance of notice under Section 148 or iii) conducting of inquiry or issuance of show cause notice or passing of order under Section 148A or iv) sanction for issuance of notice under Section 151. 41. With the above, now let me analyze the provisions of the Scheme in detail as follows: (i) Clause 2(1)(b) of the above Scheme, defines "automated allocation" which 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. (ii) The purpose of the Scheme is to make a) assessment, reassessment or re-computation under Section 147 of the Act; b) issuance of notice 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, reassessment or re-computation of total income or loss of assessee. (iii) As far as assessment, reassessment or re-computation under Section 147 of the IT Act is concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Systems) will not have any knowledge, about the allotment of cases to a particular assessing officer. (iii) As far as the present case is concerned, as contended by the learned Senior Standing counsel appearing for the respondents, the Directorate of Income Tax (Systems) has made the allocation through Automated Allocation System to the respective Assessing Officer based on the PAN card jurisdiction. Hence, in the case on hand, the requirement of Automated Allocation System has already been duly complied with. (b) Risk Management Strategy: (i) As far as the risk management strategy is concerned, it was contended by the respondents that the Income Tax Department developed an integrated platform, i.e. Income Tax Business Application (ITBA), which is the core application used by the Income Tax Officer for all operations. In the said portal, all the information gets uploaded based on the risk management strategy formulated by the Board from time to time, and once the information is uploaded in the ITBA Portal from various sources. Thereafter, the system will classify, select and allot, based on the PAN card jurisdiction, after classification based on the Software, through the aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stency over years. Discrepancies in declarations. Past compliance behavior. Complexity of transactions. High-risk cases are alerted for further review. 8. Alerts for Reassessment (Section 148) If the system identifies significant discrepancies or undisclosed income, a case is alloted for reassessment under Section 148, subject to approval by senior tax authorities. This automated and data-driven process minimizes human bias and ensures systematic detection of income escaping assessment. The alerts in the Income Tax Department's system are identified through automated processes that analyze discrepancies, patterns, and inconsistencies in financial data. These alerts are triggered when specific conditions or anomalies are detected. Here's how they are identified: a) Mismatch in Reported Income The income reported in the ITR does not align with financial transactions in the Annual Information Statement (AIS) or Form 26AS. Example: Reported income: **** : Bank deposits: **** b) High-Value Transactions Specific thresholds for transactions trigger an alert if not properly explained in the ITR. Cash Deposits: Deposits above *** in a savings account. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir likelihood of evasion based on their profile, transaction history, and compliance behavior. 3. Cross-Verification Tools: Automated systems crosscheck data from multiple sources (e.g., banks, registrars, GST filings). 4. Threshold Alerts: Pre-defined thresholds for transactions trigger system-generated alerts for review. Once the above criteria have been complied with, the notice under section 148 will be issued for further scrutiny, after obtaining the prior approval/sanction from the senior Authorities in terms of provisions of Section 151 of the IT Act. (iii) From reading the above, it is clear that the Department has been selecting the cases based on the above procedure and the same is squarely in accordance with the risk management strategy framed by Board referred in Section 148 of the IT Act. Thereafter, based on the Automated Allocation System, the Directorate of Income Tax (Systems) forwarding the cases based on the PAN jurisdiction. Therefore, the selection and allotment of cases, will not comes within the purview of the person who send notice based on the PAN jurisdiction, who is non other then the Jurisdictional Assessing Officer. (iv) Therefore, the cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Principal Director General, in charge of the National Faceless Assessment Centre. This designated portal is meant for the purpose of making faceless assessment under Section 144B of the IT Act. (vi) As far as sending notice in faceless manner is concerned, the Directorate of Income Tax (Systems) will select the cases based on the risk management strategy formulated by the Board from time to time. Thereafter, allocating the case through Automated Allocation System as discussed above to the respective Jurisdictional Assessing Officer based on the PAN card jurisdiction. (vii) As discussed above, the faceless manner means, sending notice electronically by way of "e-proceedings" to the assessee's registered account through ITBA portal itself, i.e. web portal which is designated and controlled by Directorate General of Income Tax (System). (viii) In the present case, the notice was sent to the Assessee electronically from the web portal of ITBA through the e-proceeding facilities available with the Department through the Assessee's registered account from the web portal of the ITBA. There is no quarrel on this aspect also. If it is so, all the requirements of the Scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned, this Court is of the view that if all the notices have been send in faceless manner, name of the Officer should not be mentioned. However, it will only be considered as a procedural error, which will not vitiate the entire initiation of the proceedings and hence, it will not affect the jurisdiction to issue the notice by the respondent. But in future cases, the respondent is being advised not to mention the name of the officer and from where the notices has been sent. 45. Section 130 of the Income Tax Act empowers the Central Government to make a scheme to exercise powers and performance of certain functions, vesting jurisdiction with the Assessing Officer, the exercise of power to transfer cases, or exercise of jurisdiction in case of change of incumbency in a faceless manner. 46. For the purpose of assessment, reassessment or re-computation, the Jurisdictional Assessing Officer has been vested by virtue of the Faceless Jurisdiction of Income Tax Authorities Scheme, 2022, which was introduced on 28.03.2022.reads as under: "In exercise of the powers conferred by sub-sections (1) and (2) of section 130 of the Income-tax Act, 1961 (43 of 1961), the Central Government her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttlement of pending applications by the interim Board; (vi) the e-advance rulings Scheme, 2022 notified under sub-sections (9) and (10) of section 245R of the Act with reference to dispute resolution for persons or class of persons, as specified by the Board, who may opt for dispute resolution under the Chapter XIX-AA of the Act with reference to dispute arising from any variation in the specified order fulfilling the specified conditions." 47. A reading of above Clause 3(b) shows that 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 section 144B of the Act with reference to making faceless assessment or reassessment of total income or loss of assessee. 48. Therefore, the Faceless Assessment Officer's jurisdiction under Section 124 of the Act has been provided only to make faceless assessment in terms of Section 144B to the extent provided therein. In the Faceless Assessment Scheme, the Assessment Officer referred to in Section 144B will only to make faceless assessment and the Assessment Unit, Technical Unit, Verification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed faceless manner. The order under section 148A(d) of the Act and the notices under section 148 of the Act are issued on 29-4-2022, i.e., after the "Faceless Jurisdiction of the Income-tax Authorities Scheme, 2022" and the "e-Assessment of Income Escaping Assessment Scheme, 2022" were introduced. 50. In the above case, the Hon'ble Telangana High Court has held that for making assessment, reassessment or re-computation under Section 147, the notice under Section 148 or 148A of the IT Act shall be issued in the faceless manner and rendered the findings that in the above case, the notices were not issued in such faceless manner. However, in the present case, this Court has already elaborately discussed as to how the Section 148 or 148A notices have been issued by the respondents in faceless manner based on the available facts and circumstances. 51. Further, she referred to the judgment of the Hon'ble Bombay High Court in Hexaware Technologies Limited vz. Asistant Commissioner of Income Tax and others reported in 2024 SCC OnLine Bom 1249. The relevant paragraphs, viz., paragraph Nos.33 to 37 are extracted hereunder: "33. The guideline dated August 1, 2022 relied upon by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to use the Income-tax Department's portal, and does not even claim to be a statement of the Revenue's position/stand on the issue in question. Our observations with respect to the guidelines dated August 1, 2022 relied upon by the Revenue will equally be applicable here. 35. Further, in our view, there is no question of concurrent jurisdiction of the jurisdictional Assessing Officer and the Faceless Assessing Officer for issuance of notice under section 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the jurisdictional Assessing Officer or the Faceless Assessing Officer in the Scheme dated March 29, 2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of the Revenue is to be accepted, then even when notices are issued by the Faceless Assessing Officer, it would be open to an assessee to make submission before the jurisdictional Assessing Officer and vice versa, which is clearly not contemplated in the Act. Therefore, there is no question of concurrent jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould render clause 3(b) of the Scheme otiose and to be ignored or contravened, as according to the respondent, even though the Scheme specifically provides for issuance of notice under section 148 of the Act in a faceless manner, no notice is required to be issued under section 148 of the Act in a faceless manner. In such a situation, not only clause 3(b) but also the first two lines below clause 3(b) would be otiose, as it deals with the aspect of issuance of notice under section 148 of the Act. The respondents, being an authority subordinate to the Central Board of Direct Taxes, cannot argue that the Scheme framed by the Central Board of Direct Taxes, and which has been laid before both Houses of Parliament is partly otiose and inapplicable. The argument advanced by the respondent expressly makes clause 3(b) otiose and impliedly makes the whole Scheme otiose. If clause 3(b) of the Scheme is not applicable, then only clause 3(a) of the Scheme remains. What is covered in clause 3(a) of the Scheme is already provided in section 144B(1) of the Act, which section provides for faceless assessment, and covers assessment, reassessment or recomputation under section 147 of the Act. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of the petitioner having to prove further prejudice before arguing the invalidity of the notice." 52. In the above case, the Hon'ble Bombay High Court has also held that for making assessment, reassessment or re-computation under Section 147 of the IT Act, the notice under Section 148 of the IT Act shall be issued in faceless manner. Further, in the above case, it came to conclusion that the Section 148 notice was not sent by the respondents in faceless manner. On the other hand, as stated above, in the present case, this Court has already elaborately discussed as to how the Section 148 notice was send in faceless manner in due compliance of the provisions of the Scheme. However, the Bombay High Court has no occasion deal with the aforesaid aspect since the same was not brought before the Hon'ble Division Bench of the Bombay High Court. 53. She has also referred to the judgment of the Hon'ble Gujarat High Court in Talati and Talati LLP vs. Office of Assistant Commissioner of Income Tax reported in 2024: GUJHC: 54567-DB. The relevant paragraphs, viz., paragraph Nos.22 to 28, 30 and 31 are extracted hereunder: "(22) From a further reading of Explanation 1 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of notice under Section 148 in a faceless manner, as per the scheme framed vide notification dated 29.03.2022, cannot be applied to the case of Search and Seizure under Section 132, where the Jurisdictional Assessing Officer (JAO) is required to record his satisfaction on the basis of the material for affirmation of opinion in an honest and bona fide manner. (26) We find substance in the submission of the learned counsel for the Revenue that recording of satisfaction by the Assessing Officer on a perusal of the information received by him as a result of search and seizure operation under Section 132 of the Income Tax Act' 1961, requires application of human mind, inasmuch as, reasons affirmed on the part of the Satisfaction Note may also become subject matter of scrutiny by the Court in a case of challenge, where the Court in exercise of power of judicial review may examine as to whether they are actuated by mala fides or passed on extraneous or irrelevant considerations. (27) The decision of the Division Bench of the Bombay High Court in the case of Hexaware Technologies Ltd. (supra) has been rendered in a case, which falls within the arena of Explanation 1 to Section 148 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 144B of the IT Act. However, this Court has already elaborately discussed about the situation, where Section 148 or 148A shall be sent in faceless manner and also the stage when the assessment, reassessment or re-computation under Section 144B of the IT Act will commence in detail, but the Hon'ble Division Bench of Gujarat High Court had no occasion to deal with the same. 55. Dr.B.Ramaswamy, learned Senior Standing counsel has referred the judgment of Hon'ble Delhi High Court in T.K.S.Builders Private Limited vs. Income Tax Officer rendered in W.P.(C).No.1968 of 2023. The relevant paragraphs, viz., paragraph Nos.99 to 103 are extracted hereunder: "99. Returning then to the Faceless Reassessment Scheme 2022 itself, we find sufficient merit in the interpretation of its clauses as has been commended for our consideration by the respondents. Clause 3 of the said scheme provides that assessment, reassessment or recomputation under Section 147 of the Act as well as issuance of notice under Section 148 would be through automated allocation in accordance with the risk management strategy and in a faceless manner. The respondents rightly draw our attention to the usage of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the scheme. Our conclusion would thus strike a harmonious balance between the evaluation of information made available to an AO, the preliminary consideration of information for the purposes of formation of opinion and its ultimate assessment in a faceless manner. 102. We are also, in this regard, guided by the principles of beneficial construction and thus avoiding an interpretation that would render portions of the Act or the Faceless Assessment Scheme superfluous or ineffective should be avoided//. To assert that the JAO's powers become redundant under the faceless assessment framework would conflict with beneficial construction, as it would undermine provisions specifically established to support comprehensive data analysis and informed decision-making, such as the JAO's access to RMS and Insight Portal information. 103. We are fully cognizant of the contrarian view which was expressed in this respect in Hexaware Technologies and which stands reflected in para 36 of the report which has been extracted hereinabove. However, for reasons assigned in the preceding parts of this decision, we find ourselves unable to concur with the interpretation accorded by the Bombay High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans,- (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; (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." (c) The Clause (i) of Explanation (1) deals on the aspect of income escaped assessment, means any information of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time. Therefore, except the clause (i) of Explanation (1), the Scheme has not mentioned anything about the faceless assessment of the categories mentioned at Clause (ii) to (v) of Explanation (1). Hence, all the other categories mentioned in Clause (ii) to (v) of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l id of the registered account of the Assessee through the ITBA Portal. v) In the present writ petitions, the cases were allotted by the Directorate of Income Tax (Systems) through Automated Allocation System, based on the risk management strategy formulated by the Board as referred to in Section 148 of the IT Act, for issuance of notice to the Jurisdictional Assessing Officer, who had thereafter sent the Section 148 notice to the registered email account of the Assessee from the ITBA Portal, in faceless manner. Thus, the issuance of the impugned notice was duly in accordance with the Scheme, except the procedural lapse of mentioning the name of the JAO. vi) The said procedural errors will not vitiate the initiation of the proceedings for issuance of notice under Section 148 of the IT Act since such errors are curable in nature. vii) In terms of the provisions of Section 151A of the IT Act, still the JAOs shall have to obtain prior approval from the higher authority for issuance of Section 148 notice under the Scheme in faceless manner. viii) The JAO shall upload in the ITBA Portal, the relevant documents along with the reply received for Section 148 notice from the Assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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