Case Law Details
Royal Bitumen Private Limited Vs ACIT (Bombay High Court)
The Bombay High Court recently delivered a significant judgment in the case of Royal Bitumen Private Limited vs ACIT, focusing on the jurisdiction of Jurisdictional Assessing Officers (JAO) to issue reassessment notices under the Income Tax Act, 1961. This article provides a detailed analysis of the court’s findings and their implications.
The petitioner in this case challenged a notice issued under Section 148A(b) of the Income Tax Act, contending that it was issued by the JAO outside the framework of the faceless assessment scheme introduced under Section 151A. The crux of the petitioner’s argument was that under the new scheme, the JAO lacked authority to issue such notices, which should have been under the purview of the faceless assessment system.
The High Court referred to its earlier decision in Hexaware Technologies Limited vs Assistant Commissioner of Income Tax, where similar issues were addressed. The court reiterated that the legislative intent behind Section 151A was to centralize the issuance of notices and assessments to ensure transparency and efficiency in tax administration. Therefore, any deviation from this scheme by JAOs was deemed improper unless explicitly permitted under law.
Furthermore, the court highlighted that the Division Bench had previously ruled that actions by JAOs under Section 148A(b) and (d), outside the faceless assessment system, were invalid. This was based on the premise that such actions undermined the objectives of the legislative amendments aimed at streamlining tax assessments.
The respondents did not contest the petitioner’s argument, acknowledging the applicability of the faceless assessment framework as outlined in Section 151A. Consequently, the High Court concluded that the impugned notices and orders issued by the JAO were indeed beyond their jurisdiction under the prevailing legal framework.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Rule made returnable forthwith. By consent of the parties, heard finally.
2. This writ petition under Article 226 of the Constitution of India, in the context of a notice issued to the petitioner under Section 148A(b) of the Income Tax Act, 1961 (for short, “the Act”) and actions taken subsequent thereto, has prayed for the following reliefs:-
“(a) That this Hon’ble Court may be pleased to issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, order or direction, calling for the records of the Petitioner’s case and after going into the legality and propriety thereof, to quash and set aside (i) Notice under section 148 of the Act dated April 12, 2024 (Ex-A); (ii) Order dated April 12, 2024, passed under section 148A (d) of the Act (Ex-B); (iii) Notice under section 148A(b) of the Act dated March 21, 2024 (Ex-C);
(b) This Hon’ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, order or direction, directing the Respondents, its servants, subordinates, agents and successors in office;
(c) To forthwith withdraw and/or cancel (i) Notice under section 148 of the Act dated April 12, 2024 (Ex-A); (ii) Order dated April 12, 2024, passed under section 148A (d) of the Act (Ex-B); (iii) Notice under section 148A(b) of the Act dated March 21,2024 (Ex-C);
(d) To forthwith forbear from taking any steps whatsoever pursuant to or in implementation of (i) Notice under section 148 of the Act dated April 12, 2024 (Ex-A); (ii) Order dated April 12, 2024, passed under section 148A (d) of the Act (Ex-B); (iii) Notice under section 148A(b) the Act dated March 21,2024 (Ex-C);
(e) That pending the hearing and final disposal of the present Petition, this Hon’ble Court may be pleased to stay the operation of (i) Notice under section 148 of the Act dated April 12, 2024 (Ex-A); (ii) Order dated April 12, 2024, passed under section 148A (d) of the Act (Ex-B); (iii) Notice under section 148A(b) of the Act dated March 21,2024 (Ex-C).”
3. At the outset, Dr. Shivraman, learned senior counsel for the petitioner would submit that the impugned notice as issued to the petitioner under Section 148A(b) of the Act as also the consequent order under Section 148A(d) and the notice issued to the petitioner under Section 148 of the Act, have been issued by the Jurisdictional Assessing Officer (for short, “JAO”). It is submitted that in view of the faceless scheme notified under under Section 151A of the Act by the Central Government vide notification dated 29 March 2022, the JAO did not have an authority to issue the impugned notices, as necessarily, such exercise if at all was required to be undertaken under the faceless assessment scheme. It is his submission that such issue fell for consideration of the Division Bench of this Court in Hexaware Technologies Limited V/s. Assistant Commissioner of Income Tax, Circle 15(1)(2), Mumbai & Ors.1 in which in such context the Court had considered the said issue by framing the following question:-
“(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?
4. The Division Bench examining the provisions of Section 151A of the Act as also the faceless regime which was brought into effect by the Central Government by the notification dated 29 March 2022 came to the conclusion that the Jurisdictional Assessing Officer would cease to have jurisdiction to issue any notice under Section 148A(b) and to take further actions under Section 148A(d) and Section 148 of the Act, outside the faceless assessment. Learned counsel for the respondents would not dispute this position. Thus, the challenge as raised by the petitioner on such ground stands squarely covered by the decision of this Court in Hexaware Technologies Limited (supra).
5. In view of the aforesaid discussion, we are of the clear opinion that the petition would be required to be allowed on this short ground without delving on any other contention/ground raised by the petitioner in the present proceedings. Hence, the following order:-
ORDER
i. The writ petition stands allowed in terms of prayer clause (a) which reads thus:-
(a) That this Hon’ble Court may be pleased to issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, order or direction, calling for the records of the Petitioner’s case and after going into the legality and propriety thereof, to quash and set aside (i) Notice under section 148 of the Act dated April 12,2024 (Ex-A); (ii) Order dated April 12, 2024, passed under section 148A (d) of the Act (Ex-B); (iii) Notice under section 148A(b) of the Act dated March 21, 2024 (Ex-C).”
ii. Rule is made absolute in the aforesaid terms. No costs.
Notes:
1 [2024] 162 taxmann.com 225 (Bom)(HC)
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