Govind Singh Vs ITO (Himachal Pradesh High Court)
Himachal Pradesh High Court has issued an interim stay on a reassessment notice issued under Section 148 of the Income Tax Act, 1961, to petitioner Govind Singh. The court, in its order, prima facie found the notice to be “wholly without jurisdiction” due to non-compliance with the provisions of Section 151A, introduced with effect from November 1, 2020, and subsequent notifications.
The impugned notice was issued by the jurisdictional Income Tax Officer (ITO). However, Section 151A, alongside a notification dated March 28, 2022, mandates an automated allocation system based on a risk management strategy formulated by the Central Board of Direct Taxes (CBDT). The court observed that the revenue had not contended that the first respondent (the ITO) was randomly allocated the case under this automated system.
Judicial Precedents Cited
The Himachal Pradesh High Court relied on similar pronouncements from other High Courts:
1. Telangana High Court in Kankanala Ravindra Reddy Vs. Income Tax Office and two others (CWP No. 25903 of 2023, judgment dated September 14, 2023): The Telangana High Court emphasized that two CBDT notifications (March 28 and March 29, 2022) made it mandatory for reassessment proceedings under Sections 147, 148, and 148A of the Act to be conducted in a faceless manner. This includes allocation through an automated system and reassessment under Section 144B. The court had ruled that since the proceedings in Kankanala Ravindra Reddy were initiated by a local jurisdictional officer and not in the prescribed faceless manner after the “Faceless Jurisdiction of the Income Tax Authorities Scheme, 2022” and “e-Assessment of Income Escaping Assessment Scheme, 2022” were introduced, they were invalid. The core principle cited was that “where the power is given to do certain things in certain way, the thing has to be done in that way alone.”
2. Bombay High Court in Hexaware Technologies Ltd. Vs. Assistant Commissioner of Income Tax & others (Writ Petition No. 1778 of 2023, judgment dated May 3, 2024): The Bombay High Court echoed the Telangana High Court’s view, stating that the Scheme dated March 29, 2022, mandatorily requires notice issuance “through automated allocation.” This automated allocation implies a randomized distribution of cases, and it was not the revenue’s contention that the Assistant Commissioner of Income Tax in that case was a randomly allocated officer. The Bombay High Court also dismissed reliance on a Calcutta High Court judgment (Triton Overseas Private Limited) for not considering the mandatory nature of the March 29, 2022 Scheme.
The Himachal Pradesh High Court concurred with the views expressed by the Telangana and Bombay High Courts. Consequently, the court granted an interim stay on all further proceedings pursuant to the Section 148 notice issued to Govind Singh. The case is scheduled for further hearing on September 17, 2024.
