Niranjan Kumar Jain V. Deputy Commissioner Of Income Tax Circle '1(1)' and The Principal Commissioner of Income Tax - 1 and The Assessment Unit, Income Tax Department, National Faceless Assessment Centre, Delhi

WP/14430/2023

AI Insights

The case involves two writ petitions filed by Niranjan Kumar Jain against the Deputy Commissioner of Income Tax and other officials, challenging the validity of reassessment notices and orders issued for the assessment years 2018-19 and 2019-20. The petitioner argued that the reassessment and subsequent notices were issued in violation of the faceless assessment provisions mandated by the Finance Act, 2021, which require such proceedings to be conducted in a faceless manner through automated allocation. The respondents contended that the notices were valid under the unamended provisions of the law. The High Court, referencing a Supreme Court decision in Ashish Agarwal, found that the notices and orders were improperly issued under the old provisions and should have adhered to the new faceless assessment procedures.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 682452 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 14-09-2023
• Assessment Year: misc
• Other Referred Cases: Union of India and Others vs. Ashish Agarwal
• Laws Referred To: Income Tax Act, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J V PRASAD
• Assessee Lawyers: DUNDU MANMOHAN
• Keywords: Faceless assessment; Income Tax; Natural Justice; Reassessment; Writ petition
• Section: 148; 148A(d); 226; 151 CPC

Judgement Text

" [ 337e ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) SATURDAY, THE EIGHTEENTH DAY OF NOVEIVBER TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE P. SAM KOSHY AND THE HONOURABLE SRI JUSTICE N. TUKARAMJI WRIT PETITION Nos.: 14430 AND 14451 OF 2023 WRIT PETITION NO: 14430 OF 2023 Between: Niranjan Kumar Jain, S/o Ramesh Kumar Jain, Aged about 40 Years, 3-6- 363, Mahaveer chambers, Himayatnagar, Hyderabad, Telangana- 500029. ...PETITIONER AND 1. Deputy Commissioner Of lncome Tax Circle 'l(1), lT Towers, AC Guards, Masab Tank, Telangana - 500004 2- The Principal Commissioner of Income Tax - 1, l.T. Towers, AC Guards, Masab Tank, Hyderabad, Telangana 500004- ...RESPONDENTS Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all further proceedings pursuant to the Order u/s 148A(d) of the Act and consequential notice u/s 148, dt. 18.04.2022, passed by the 1st respondent for A.Y. 2019- 2O, and may pass such other order(s) as the Honble Court deems fit Petition under Article 226 ol the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus, declaring the impugned Order u/s 148A(d) of the Act, dt. 18.04.2023, passed by the 1st respondent vide DIN No. ITBA/AST/F/148A12022-2311042642037(1)and the consequent notice issued uis 148 of the Act by the JAO for A.Y.2019-20, vide Document ldentification No. (DlN) ITBA/AST lsl148_112023- 24 11052158544(2), as void, illegal, and contrary to the Provisions of lncome- tax Act and contrary to the Principles of Natural Justice. lA NO: 'l OF 2023 I and proper in the interests of substantial justice, as otherwise the Petitioner would be put to irreparable loss and severe injury. Counsel for the Petitioner: SRI DUNDU MANMOHAN Counsel forthe Respondents: SRI J.V. PRASAD (SC FOR INCOME TAX) WRIT PETITION NO: 14451 OF 2023 Between: Niranjan Kumar Jain, S/o. Ramesh Kumar Jain, Aged about 40 Years, 3-6- 363, Mahaveer chambers, Himayatnagar, Hyderabad, Telangana-500029. ...PETITIONER AND '1. Deputy Commissioner Of lncome Tax, Circle 1(1),lTTowers, AC Guards, Masab Tank, Telangana - 500004 2. The Principal Commissioner of lncome Tax - 1, l.T. Towers, AC Guards, Masab Tank, Hyderabad, Telangana 500004. 3. The Assessment Unit, lncome Tax Department, National Faceless Assessment Centre, Delhi, Ministry of Finance, Room No. 4O1 ,2nd Floor, E- Ramp, Jawaharlal Nehru Stadium, Delhi-1 '10003. ...RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus, declaring the impugned Order u/s 148A(d) of the Act, dl. 25.04.2022, passed by the 1st respondent vide DIN No. ITBA/AST/F/148A12022-2311042835493(1) and the consequent notice issued u/s 148 of the Act for A.Y. 2018-19, vide Document ldentification No.(DlN)ITBA/ AST/S/148-1/2022-2311042835507(1), as void, illegal, and contrary to the Provisions of lncome-tax Act and contrary to the Principles of Natural Justice. lA NO: 1 OF 2023 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all further proceedings pursuant to the impugned Order u/s 148A(d) of the Act, dt. 25.04.2022, passed by the 1st respondent vide DIN No. ITBA/AST/F/148A12022-2311042835493(1) and the consequent notice issued u/s 148 of the Act for A.Y. 2018-19, vide Document ldentification No.l DlN)ITBA/AST/ s t 1 48 _1 I 2022-231 1 O 42835507 (1 ) Counsel for the Petitioner: SRI DUNDU MANMOHAN Counsel for the Respondents: SRI J.V. PRASAD (SC FOR INCOME TAX) The Court made the following: COMMON ORDER I I THE HON'BLE SRI .IUSTICE P.SAM KOSHY ANt) THE HON'BLE SRI ruSTICE N.TUKARAMJI WRIT PETITION Nos.14430 and 14451 of 2023 When these matter are taken up lor hearing today, it has been informed by the parties that identical writ petitions i.e., W.P.No.25903 of 2022 and batch have already been allowed and disposed of vide order dated 14.o9.2023. 2. In view of the lact that the identical rnatter has already been allowed by this Court, we are inclined to allow these writ petitions also, in terms of the order passed in W.P.No.25903 of 2022 and batch 3. As a sequel, miscellaneous applications pending if any in these writ petitions, shall stand closed. No order as to costs. //TRUE COPY// SD/.N. SRIHARI ASSISTANT REGISTRAR SECTIO}SFFICER 1. DeDutv Commissioner Of lncome Tax Circle 1(1 ), lT Towers, AC Guards' Ma'sa5 Tank, Telangana - 500004 z. iG princioai Comriissioner of lncome Tax - 1, l.T Towers, AC Guards' Masab Tai.rk, Hyderabad, Telangana 500004' O. ifre Assessment Unit, lncome TZx Department, National Faceless * nls6simlnt Centre, Delhi, Ministry of Finance, Room No' 401 ,2nd Floor' E- Ramo. Jawaharlal Nehru Stadium, Delhi-'1 10003. a One CC to SRI DUNDU IVIANMOHAN, Advocate IOPUCI - 5. oG cc to snt J.v. PRASAD (sc FoR INCoME I4x) toPqgl - - tni\"rg *itli the order copy d)ted 14.09.2023 in w.P. No'25903 ot 2022) 6. Two CD Copies BN GJP ^) b COMMON ORDEIT:1pcr Ilon blc. ri .tusrica P.S,IM KO,SHYl decided on t4.O9.2023 on similar terms. l To, l HIGH COURT DATED:1811112023 COMMON ORDER WP.Nos.l4430 of 2023 AND 14451 of 2023 ! ALLOWING BOTH THE WRIT PETITIONS WITHOUT COSTS 1 EL4 o( H9 6? .s , s b I o (. * cyu' ge..__ . ''w THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY Writ Petition Nos.259O3 242t4 2427t 32075 32090 s2688 33050 334o2 33474 34100 34101 34340 3459a 34604 3466t 34698 34746 34836 36598 36828 36945 35774 374t4 3749t 37536 43427 45047 of 2022 Writ Petition Nos.15383 47 37t9 372L 3729 3738 9695 11599 14485 16224, t67 61, 1 6783, t9966, 209 L4, 20929, 20959 COMMON ORDER: (per Hon'ble Sn Jrstice P. S.4M KOSIIY) These batch of writ petitions have been filed assailing the order passed by the respondent No. l/The Income Tax Officer dated 29.O7.2022, vide DIN & Notice No.ITBA/COM/Fl17/2022- 23 /1044297902(1) for the assessment year 2016-17, under Section 148-A (d) of the Income Tax Act, 1961 (for short the ActJ. The challenge is also to the consequential notice dated 29.O7.2022, under Section 148 of the Income Tax Act, as well, issued by the respondent No. t himself. 2, Heard Sri A.V. Krishna Kaundinya, learned Senior Counsel appearing on behalf of Sri A.V.A. Siva Kartikeya, learned counsel for the petitioner and Sri J.V. Prasad, learned counsel for the respondent- Department. t4492. L542L. 15736. 15745. L576a. 15779. t6t64. 16223, arl^d.23556 of 2023 2 3. Though the aforesaid two orders have been assailed on various grounds, nonetheless, the foremost objection which the petitioners have raised is that of the two orders being in contravention of the amended provision of the Income Tax Act, 1961. 4. The objection specificaliy was that once when the respondent No. I have decided to go in for re-assessment of the return submitted by the petitioner/ assessee and notice for the same under Section 148A of the Act was issued, it was incumbent upon tht: respondent No. 1 to have adhered to the amended provision of the A<:t. According to the learned Senior Counsel for the petitioner it was required to get the re-assessment done in a faceless manner, rather than being assessed by the jurisdictional officer as has been provided under Section I44B of the Act and in accordance with the scheme enacted by the Central Government under Section 151A of the Act. There were other objections also raised by the petitioners in this batch of writ petitions. But, since the aforesaid objections was substantially touching the jurisdictional issue itself, the learned Senior Counsel appearing for the petitioner requested for considering and deciding the aforesaid preliminary objection first. Further only if required and in case, the preliminary objection is held to be not sustainable, would there be a requirement for this Court to proceed further and decide the other issues raised. l l 5. In view of the request made by the learned Senior Counsel appearing for all the petitioner and which was accepted by the learned counsel for the respondent, we proceed to decide the aforesaid jurisdictional issue as a preliminary issue and only if required would we then proceed further to decide the other issues. 6. The preliminary objection raised by the petitioner which is being considered as the foremost issue is, \"whether the impugned order under Section l48A (d) as well as the notice under Section 148 of the Act could be issued by the local jurisdictional officer, rather than the faceless assessment.\" The issue in other words was \"whether was it not mandatory for the authorities concerned to initiate proceedings pertaining to re-assessment under Section 148A and 148 of the Act in a faceless manner, (rather than being proceeded by the local jurisdictional ofhcer), as is envisaged under Section 1448 as also under Section 151A of the Act.\" 7. Learned Senior Counsel appearing for the petitioner stressed hard on the fact that subsequent to the amendment incorporated in the Income Tax Act, 1961, with effect from 29.03.2022 all the proceedings initiated by the authorities concerned under Section 148A and 148 of the Act were all mandatorily to be proceeded in a faceless manner. Else, the same would amount to being violative of the Income Tax Act or in contravention to the procedure prescribed under law which is in force. 4 8. According to the learned Senior Counsel appearing for the petitioner once when the Central Board of Direct Taxes (for short CBIT), have issued the notification dated 29 .03.2022, whe reby a scheme called e-assessment of Income Escaping Assessment Scheme 2022 which came into lorce with effect from 29.03.2022 itself; the assessment, re-assessment or re-computation under Section 147 and the issuance of notice under Section 148A shall be done through the automated allocation. Further the notices, to be issued, have to be in a faceless manner as is provided under Section l44B of the Act. It was also contended that the re-opening proceedings first of all could not have been initiated after a gap of three (3) years. Secondly, re- opening of the proceedings can only be permitted if the income chargeable to tax escaping assessment is more than hfty Rs.5O,00,O0O/ - 9. It was further contended by the learned Senior Counsel appearing for the petitioner that the respondent No.1 has acted in a mechanical and arbitrary fashion while issuing notices through the jurisdictional officer. The said Act was without taking into consideration the amended provision under the Income Tax Act, 1961, as introduced under the Finance Act,2O2l.lt was also without proper verification of whether the so called income which has escaped assessment exceeds Rs.50,00,OOO/- or more. 5 1(}. Learned counsel for the respondent-Department on the other hand opposing the petition submits that it is not the case where a notice has been recently issued to the petitioner subsequent to the amendment brought in to the Act. According to him in all these cases, notices were issued prior to the amendment which had come. As such, the proceedings also have been drawn in terms of the un- amended provision. Moreover, the fact that no further approval was required to issue notices at this stage by the Assessing Officer lends support to the contention of the respondent-Department that the action on the part of the jurisdictional officer in initiating the proceedings was proper, legal and justified. 11. It was also the contention of the respondent-Department that under the provisions of the Act both the JAO as well as units under NFAC have concurrent jurisdiction. The Act does not distinguish between JAO or NFAC with respect to jurisdiction over a case. This is further corroborated by the fact that under Section l44B of the Act, the records in a case are transferred back to the JAO as soon as the assessment proceedings are completed. So, section l44B of the Act lays down the role of NPAC and the units under it for the specific purpose of conduct of assessment proceedings in a specific case in a particular assessment year. This cannot be construed to mean that the JAO is bereft of the jurisdiction over a particular assessee or with respect to procedures not falling under the ambit of Section l44B ot 6 the Act. Since, section 1448 of the Act does not provide for issuance of notice under Section 148 of the Act, there can be no ambiguity in the fact that the JAO still has the jurisdiction to issue notice under Section 148 of the Act. 12. It was further contended by the learned counsel for the respondent-Department that the said notification does not state whether the notice is to be the scope of the scheme with regards to the procedure covered by it and lays down the legal contours of how such procedures are to be carried out. It states that the issuance of notice under Section 148 of the Act shall be through automated allocation in accordance with the risk management stratery and that the assessment shall be in a faceless manner to the extent provided under Sectior-r 1448 ol the Act. From the above, it. is apparent that in the procedure for re-assessment, as it exists as on date, both these can be followed. Therefore, it will be incorrect to state that the issuance of notice by the JAO is without jurisdiction. 13. According to the learned counsel for the respondent- Department neither the Section nor the scheme dated 29.03.2022 speak about the detail specifics of the procedure to be followed therein. They lay down the general principles that should be followed so as to impart greater efficiency, transparency and accountability to the procedures contained therein. The said scheme lays down that the issuance of notice under Section 148 of the Act shall be through 7 automated allocation in accordance with Section 7448 of the Act. It was also submitted that the CBIT has issued notification No.Ol /2O22 dated 1 1.O5.2O22 containing guidelines for implementation of the Hon'ble Supreme Court's judgement in the case of Union of India and Others us. Ashish Aganaal. Vide the said judgment, the Hontrle Supreme Court revived nearly 90,000 notices issued under Section 148 between OI.O4.2O2l to 30.06.2021 re-opening assessment for the assessment year 2073-14 and subsequent years. It is to be stated that these notices u,ere issued under the old provisions of re-opening. The Hon'ble Supreme Court had revived these notices quashed by certain High Courts by converting the notices issued under Section f 48 (old) to notice under Section 148A (new) of the Act with a direction to continue the proceedings after following the procedure laid down under the provisions. As such, the instruction No.Ol/2022 of CBIT, the present notice under Section 148 dated 31.O7.2022 and the order under Section 148A(d) dated 29.O7.2O22 are valid actions on the part of the Department. 14. It was further contended that the order passed under Section l48A(d) of the Act is not a final assessment order and the notice issued under Section 148 is only to commence the re-assessment proceedings and the assess€ has the re-course of Iiling appeal before the CIT (Appeals) when the final order of assessment is passed. 15. According to the learned counsel for the respondent- Department the order passed under Section 148A(d) and the notice under Section 148 of the Act dateci 29.O7.2022 were passed/ issued as per the provisions of the Act rrvith appropriate sanction, after giving due opportunity to the petitioner, and after considering the submissions of the assessee. [t is submitted that no prejudice is caused to the petitioner as the order passed under Section l48A(d) of the Act is not an assessment order and only an order to determine whether it is a fit case for issuance of notice under Section 148 of the Act. 16. Having heard the contentions put lorth on either side and on perusal of records, what is now required to be considered is the factual matrix of the case. Admittcdly, thc notices were issued under Section 148 of the Act between Ol .O4.2O21 to 3 1 .O6.2O2 1 for re- opening of the assessments for the assessment year 2Ol3-74 and subsequent years. Initially, these re-opening assessments were subjected to challenge before various High Courts ancl many of the High Courts had quashed the notices in the light of the subsequent amendment that had been brought to the Income Ta-r Act and the insertion of the new Section i.e. Section 148A. The decision of the High Courts which had allou,ed the writ petitions of various other assessee's was subjected to challenge be fore the Hon'ble Supreme Court. Where the Hon'ble Supreme Court had tagged up all the I matters and passed the landmark decision in the case of UNION OF INDIA AND OTHERS. YS. ASHISIIAGARWALI. 17. The Hon'ble Supreme Court after considering the legal contentions raised at the bar, at paragraph No.7 held that the Finance Act,2O2I, being of remedial and benevolent nature and having been substituted with a specific aim and object, more particularly, to protect the rights and interests of the assessee and the same being in public interest, held that they were in complete agreement with the view taken by the various High Courts while holding that the benelit of the new provisions shall be made available even in respect of the proceedings relating to the past assessment years, where notices have been issued under Section 148 on or after O1.O4.2O21 i.e. the date since when the Finance Act,2O2l, became enforceable. 18. However, while upholding the judgements of the High Courts, the Hon'ble Supreme Court taking into consideration the fact that the Income Tax Department had issued approximately 9O,O00 notices under Section 148 of the un-amended Act and in all these cases, the Department would become remediless so far as re-assessment proceedings are concerned. Therefore, as a onetime measure invoking the powers conferred upon it under Section 142 of the Constitution of India, the Hon'ble Supreme Court ordered that the notices under ' 2022 qq| fiR t sc 10 Section 148 which we re issued by the Departmerlt should be considered to have been issued under Section 148,{ of the lncome Tax Act i.e. new provision inserted by u,ay of the Finance Act,2O2l, and permitted the Department to procced further with the re-assessment proceedings as per the substituted provisions of Section 147 to 151 of the Income Tax Act as per the Finance Act,2O2l. 19. It would be relevant at this juncture to take note of the observations made by the Hontrle Supreme Court in paragraph No.7 and paragraph No.8. The relevant portion of which is being re- produced herein under: \"Thus, the neu.t prouisions substiluted bA the Finance Act, 2021 being remed.ial and beneuolent in no.ture ond substituted uith a specific oim and object to protect the ights and interest of the assessee as uell as and the same being in public irtterest, the respectiue Htgh Courts Lnue rightly held that the benefit of neu) prouisions shall be made auailab[e euen in respect of the proceedings relating to past assessment Aears, prouid<:d section 148 notice has been issued on or aJler Apfl I, 2021. We are in complete agreement wtth the uietu taken bg the uarious High Courts in holding so. Hou.teuer, at the same time, the judgments of the seL'eral High Courts uould result in no reassessment proceedings at all, euen if the same are permissible under the Finance Act, 2021 and as per substituted sections 147. The Reuenue cannot be made remediless and the object and purpose of reassessment proceedings connot be frustroted. It is true that due to a bona fide mistake and in uteu of stLbsequent ertension of time uide uaious notifications, the Reuenue issued the impugned- notices under section 148 ofier the arnendment uas enforced ruith effect Jrom Apil 1, 2021, under the unamended section 148. In our uieLu the some ought tlot to hnDe been issued under the unamended Act and ought to l,oue been issued und.er the substituted proutsions of sections 147 to 151 of the Income-tax Act os per the Finance Ac| 2021. T'her<: appears to be genuine non-appltcation of the amendntents es th.e olficers of the Reuenue mag haue been under a bonct frde belicF that the I 11 amendmenls maA not llet haue been enforced. I-herefore, u.te are of the opinion that some leeuay rnust be shoutn in tlnt regard uLhtch the High Courts could haue done so. Therefore, instead of quashing end setting aside the reassessmen, notices issued under the unamended prouisions of the Income-tax Act as those deemed to haue been issued under section 148A of the Income- tax Act os per the netu prouisions of section 1484 and the Reuenue ought to haue been perrnitted to proceed further with the reoss€ssment proceedings as per the substttuted. prouisions of sections 147 to 151 of the Income tax Act as per the Finance Act, 2021, subkct to compliance of atl the procedural requirements and the defences, tuhich may be ctuatlable to the assessee under the substituted prouisions of sections 147 to 151 of the Income- tax Act and uhich may be auailable under the Finance Act, 2021 and in law. Therefore, ue propose to modify the judgments and orders passed bA the respectiue High Courts as under : fi The respectiue impug1ned section 148 notices issued to the respectiue cssessees shctll be deemed to haue been issued under section l48A of the Income-tax Act as substituted bA the Finance Act, 2021 and treated to be shota-cause notices in terms of section 148A(b). The respectiue Assessing Offtcers shall uithin thirty dags from todag prouide lo the as.seess ees the information and mateial relied upon by the Reuenue so that the asseessees can replg to the notices Luithin tuo tueeks thereafter ; (it) The requirement of conducting any enquiry with the pnor opproual of the speciJied authorttg under section 148A9(a) be dispensed tuith as a onetime meo,sure uis-d-uis those notices uhich haue been issued under section 148 of the unamended Act from Apil 1, (tit ?he Assessing Olficers shall thereafter pass an order tn tern-s of section 148A(d) after following the due procedure as required under section 148A(b) tn respect of each of the concerned assessees \" ,' The Honble Supreme Court further, in order to strike a balance between the rights of the Revenue as well as the respective assessee's ordered that the notices issued under Section 148 of the un-amended Act to be deemed to have been issued under Section 148,{ of the Income Tax Act as substituted by the Finance Act, 2027, and also ordered for construing or treating the notices to be the show cause 72 notice in terms of Section 148A (b) while disposing of the batch matters. The Hon'ble Supreme Court in its operative [)art gave the following directions in paragraph No. I 0, w'hich aga in for ready reference is being reproduced herein under: \"In uieu.t of the aboue and for the reasons sto.ted aboue, the present appeals are allouted in part. The impuqned common judgments and orders passed bg the High Court of .ludicature at Allahabad in W. T. No. 524 of 2O21 and other allied tax appeals/ petitions, i.s/ are herebg modified and. subslituted as under (ii) Tlrc impugned section 148 notrces issued kt lhe respectiue ossessees u-thich uere issued under unantencled section 148 of th.e Income-tox Act, ttthich uere the sltliect matter of u-tit petitions before the uaious respectiue t{igh Couns shall be deemed to haue been issued under serction 148A of the Income-tax Act as substituted bA the l;inance Act, 2021 and construed or treated to be show'cause notices tn terms of section 148A(b). Ihe Assessirtg O.tficer shatt, ulithin thirty dags from today prouide to the respectiue asseessees information and material relied upon bg the Reuenue, so that the assessees can replg to the shou- cause notices uithin tuo ueeks thereafter ; The requirement of conducting anu enquiry, if required, uith the prior approuol of specifted authority under section 148A(a) is herebg dispensed uith as a oneltme measure ub-A -uis those nottces which haue been issued under section 48 of the unamended Act from April 1, 2021 titl date, including those which httue been quashed bg the High Courts. Euen otheruise as obserued hereinaboue holding ang enquiry utth the prior approual of specifed authoitA is not mandatory but it is for the concerned Asses-sing Offiers to hold ang en4uiry, if required ; (iit) Th.e Assessing Offtcers shall the-reaJie r poss orders in terms of section 148A(d) in respect of each of the concerned assesees ; thereafter aJter follotuing the procedure as required under section 148A nag issue notice und.er section 148 (as substituted) ; (iu) All defences which mag be auailable to ,he assessees including those auailable under section 149 of the Income- tax Act and all ights ancl corltentions uhich mag be auailable to the concemed assessees and Reuenue und.er (4 I t3 the Finance Act, 2021 and in latu, shall conttnue to be auailable. 20. Keeping the aforesaid vieu, of the Honble Supreme Court, it would be relevant at this juncture to take note certain provisions of the.Income Tax Act which stood amended with effect from O1.04.2021 by virtue of the Finance Act,2O2l. Section 144B inserted by virtue of the Finance Act, 2O2l , with effect from 01.O4.202 I provides for faceless assessment and sub-Section i of the said newly inserted Section 1448 is an non-obstante clause. The relevant portion of sub- Section 1 of Section 1448 necessary for adjudication of the preliminary issue under consideration is re-produced herein under: \"Notwitlstanding anything to the conlrary contained in ang other prouision of this Act, the assessmenl, ,\"eassessment or recomputation under sub-section (3) of section 143 of under section 144 or und.er section 147 as the case may be uith respect to the cases refened to in sub-section (2), shall be made in a faceless manner as per the follouing procedure, namelg:- (, the National Faceless Assessment Centre sholl assign the case selected for the purposes of faceless assessmen, under this section to a specific assessmen, unit through an automate d allocatto n sy ste m : the National Faceless Assessment Centre shall intimate the assessee that assessment in his case shall be completed in accordance with the procedure laid down under this section; a notice shall be serued on the assessee, through the National FaceJess Assessmenf Centre, under sub-section (2) of section 143 or under sub-section (1) of section 142 and the assessee may file his response to such notice tuithin the date spectfied therein, to the National Faceless Assessment Centre uhtch shall fonuard the same to the assessment unit\"; (i, (itil 21, In continuation to the aforesaid provisions, it would be relevant to take note of yet another provision of law i.e. sub-Section 1 of , ,/ I 1,4 Section 151A which was inscrted with effect from Oi.ll.2O2O.lt refers to faceless assessment of income escaping assessment u,hich would be relevant for better understanding of the issue being clecided in the present batch of writ petitions, which again for ready' reference is being re-produced herein under: \"The Central Gouentment mag make a scheme, bg rtotificatiott in the Official Ga.zette, fo, the purposes of assessment, reassessment or re-computation under section 147 or issuance of notice under section 148 [or conducting of enquiies or issuance of show-cause notice or passing of order under section l48Al or sanction for issue of such notice under section 151, .so as to import greater efftciencg, transparencg and accountabilitll bg (a) eliminating the interface betueen the income-tax authoity and the ossessee or ang other person to the' extent te chno log icallg fe as ib le ; (b) optimising utilisation of the resources through ecorutmies of scale and functional specialisation; (c) introducing a team-based cssessment, reassesstnerTt, re- computation or issuance or sanction of notice u[th dgnamic _juisdiction\". 22- Similarly, the Central Board of Direct Taxes had also amended Section 13O of the Income Tax Act so far as conferring jurisdiction of the Income Tax Authorities in the light of the faceless assessment procedure being adopted. The amended Section 13O and sub-Section 1 which is rclevant for the present issue under consideration again for ready reference is being reproduced herein under: \"The CentroL Gouernment may make a scheme, by nottftctrtion In the Olficial Cazette, for the purpose of (a) exercise of all or ang of the powers and perfonnatrce r-'f all or ang of the functions anferred orl, or, as the case nag be, assigned to income-tuc authortties bq or under lhis Act as refened to in section 120; or I / 15 (b) uesting tle jurisdiction with the Assessing Officer as referred to in section 124; or (c) exercise of poLuer to transfer cases under section 127; or (d) exercise of juisdiction in case of change of incumbencg as referred to in section 129, so as to impart greater efficiencg, tran-sparenc!4 and accountability bg (i) eltminating the interface betueen the income-tax authoitg and the assessee or ang other person, to the extent technolog icallg feas ibl e ; (ii) optimising utilisation of the resources through economies of scale and functional speciatisation; (iii) introducing a team-based exercise of powers and performance of functions bg tu.to or more income-tax authoities, cono)rrentlA, in respect of ang area or persons or classes or cases, utith dgnamic juisdiction.\" 23. In furtherance to the powers conferred under sub-Sections 1 and 2 of Section 130 of the aforesaid Income Tax Act, the Central Board of Direct Taxes framed a scheme called as the \"Faceless jurisdiction of Income Tax Authorities Scheme, 2022.\" A plain reading of the aforesaid notification would clearly reflect that as has been amended under Section 13O. The Central Board of Direct Taxes has framed a scheme which defines the Act to be the Income Tax Act and it specilically dehnes automated allocation which is defined under Section 2 (1)(b), which again for ready reference is being re-produced herein under: \"ln this Scheme, anless the context othenttise requires, (a) \"Act\" means the Income-tox Act, 1961 (43 of 1961); (b) \"automated allocation\" means an algoithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine leaming, u.tith a uieu to optimise the use of resources;\" /' 16 Further Section 3 of the said scheme deals with vesting of the jurisdiction 4,ith the Assessing Oflicer, which again for ready reference is being reproduced herein under: \" uesting tLrc juisdiction tuith the Assessing Ofjicer os rqfened to in section 124 of the Act, shall be in o faceless manner, through automated allocation, in accordance with ond to the extent prouided in- (i) Section 1448 of the Act u-tith reference to makinq faceless assessmenf of total income or loss orfassessee; ' 24. In furtherance to the aforesaid notification, the Central Board of Direct Taxes again in exercise of its powers conferred under sub- Sections I and 2 of Section 151A framed another scheme called as the e-assessment of Income Escaping Assessment Scheme 2022, which dehnes automated allocation is reproduced herein under: \"In this Scheme, unless the context othertuise requin:s,- (a) \"Act\" means the Income-tax Act, 1961 (43 of 1961); (b) \"automated allocation\" means an algorithm for randomised alLocation of cases, bg using suitable technological tools, including artificial intelli.qence and mochine leaming, uith a uieut to optimise the use of resources.\" And the scope of the scheme again has been envisaged in Section 3 of the said scheme, which again for ready reference is being reproduced herein under: \"For the purpose of this Scheme,- (a) assessment, recssessment or recomputalion under sectopm 147 of the Act, (b) issuance of notice under section 148 of the A<:t, 1,1 shall be through automated allocation, tn accordance tuith isk management strategA formulated by the Board as referred to irt section 148 of the Act for issuance of notice, and in a faceless manner, to the extent prouided tn section 1448 of the Act tuith reference to making assessment or reassessment of total income or loss orf assessee. \" 25. A plain reading of the aforesaid two notifications issued by the Central Board of Direct Taxes dated 28.O3.2022 aod 29.O3.2O22, it would clearly indicate that the Central Board of Direct Taxes was very clear in its mind when it framed the aforesaid two schemes with respect to the proceedings to be drawn under Section 148A, that is to have it in a faceless manner. There were two mandatory conditions which were required to be adhered to by the Department, firstly, the allocation being made through the automated allocation system in accordance with the risk management strates/ formulated by the Board under Section 148 of the Act. Secondly, the re-assessment has to be done in a faceless manner to the extent provided under Section l44B of the Act. 26. After the introduction of the above two schemes, it becomes mandatory for the Revenue to conduct/ initiate proceedings pertaining to reassessment under Section 147, l4a & 148A of the Act in a faceless manner. Proceedings under Section 147 and. Section 148 of the Act would now have to be taken as per the procedure legislated by the Parliament in respect of reopening/ re-assessment i.e., proceedings under Section 148A of the Act. L 18 27. In the present case, both the proceedings i.e., the impugned proceedings under Section 148A of the Act, as well as the consequential notices under Section 148 of the Act were issued by the local jurisdictional officer and not in the prescribed faceless manner. The order under Section 148A(d) of the Act and the notices under Section 148 of the Act are issued or 29 .O4 .2022, i.e., after the \"Faceless Jurisdiction of the Income Tax Authorities Scheme, 2022\" and the \"e-Assessment of Income Escaping Assessnrent Scheme, 2022\" were introduced. 2a. From the afore given factual matrix, firstly the statutory provisions enumerated in the preceding paragraphs and secondly, the subsequent direction given by the Hon'ble Supreme Court in the case of Ashish Agarwal, supra, what is clearly reflected is the fact that when the Hon'ble Supreme Court had partly allowed the petitions which were filed by the Union of India challenging 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 . lt never intended the authorities concerned to continue with the proceedings from the stage of the issuance of notices under Section 148, nor is the directions to that effect. And there cannot be any ? 79 confusion, ambiguity or mis-conception for the respondent- Department to have in this regard. 29. The Hon'ble Supreme Court has in paragraph No.7 specihcally held that the High Courts have rightly held that the benefit of new provisions shall be made available in respect of the proceedings relating to past assessment years. Further, the Hon'ble Supreme Court again in paragraph No.S very emphatically had said that the proceedings ought not to have been issued under the unamendecl Act. Rather ought to had been issued under the substituted provisions as per the Finance Act, 2027. Further, in the same paragraph clearly directed the Income Tax Department to proceed further as per the Finance Act, 2021, subject to compliance of all the procedural requirements and defences available to the assessee under the substituted provisions under the Pinance Act, 2021. The fact that the Hon'ble Supreme Court allowed the notice earlier issued under Section 148 be treated as notice one under Section 148A and further it was also be treated as the show cause notice issued under Section 148A(b) by itself establishes the fact the directions given by the Hon'ble Supreme Court for the respondent-Department was to proceed further in accordance with the substituted provisions which stood introduced by the Finance Act,2021. i 20 30. In thc instant case, undisputedly the respondent-Department has not proceeded against the petitioner under tbe substituted provisions of the Finance Act, 2021. Rather, it proceeded with the unamended provisions of 1arv. This in other words tak<:s the position back to the stagc as it stood when the initial notices under Section 148 under the unamended provisions of law were issued. This in other words also takes us to a position or a stage prior to the large number of writ petitions being allowed across the country, approximately 9,O0O in number and confirmed by the Hon'ble Supreme Court also vide tJle judgement of Ashish Agarwal, supra. 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 Jrrovided under the law. 32. The Hon'ble Supreme Court in the case of Chandra KisLnre Jha Vs. Mahaueer and otherszin paragraph No. 17 laying down the aforesaid principle held as under 'it is well settled solitary principle that if statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner. The said principle of law was further reiterated in the case of CLLerntlcttimani Vs. Chief Secretary Gouernment of Andhra Pradesh and ' t999 8 scc 206 )1, other*, wherein, again in paragraph No. 14, the aforesaid principle has been reinlorced by the Hontrle Supreme Court holding that \"where law prescribe a thing to be done in a particular manner following a particular procedure, it shall have to be done in the same manner folloq,ing the provisions of law without deviating from the prescribed procedure. The said principle has again recently been reiterated and lollowed in the case of Municipal Corporation Greater Mumbai Vs. Abhilash Lal and other*, and in the case of Opto Ciranit India Limited 7s. Axr's Bank and ofherssand again in the case of Union of India Vs. Mahesh SinEF.ln the case of Tata Chemicals Limited Vs. Commissioner of Customs (preuentiue) Jam Nagefl, wherein it has been held that there can be no stopple against the law. If the law requires something to be done in a particular manner, then it must be done in that manner, if it is not done in that manner then it would have no existence in the eye of law. In paragraph 18 of the said judgment, the Hon'ble Supreme Court held as under: \"The Tibunal's judgment has proceeded on the basis that euen though the samples u.tere drawn contrary to law, the appellants usould be estopped because their representatiue LUas present when the samples tuere drau.;n and theg did not object immediatelg. Ihis is a completely peruerse finding both on fact and la u.t. On fact, ' zots tz scclzz o zozo 13 scc z3q ' zozt a scctot \" clp.ruo.q8oz of 2022 ' zots t's. scc 6z8 22 it has been more than amply proued that no representatiue of the appellant Luas, in fact, presenl at the time the Customs Inspector took the samples. Shri K.M. Jani tuho tuas allegedlg present not onlA stated- that he did not represent the Cleaing Agent of the appellants in that he utas not their employee but also stated that he was not presenl when the samples were taken- In fact, therefore, there wos no representatiue of the appellants uthen the samples utere taken. In law equallg the Tibunal ought to haue realized. that there can be no estoppel against lctw- If the lou requires ttnt something be done in a particular manner, it must be done in that manner, and if not done tn that manner has no existence in the eye of law at all. The Custorns Authoities are not absolued from follor.uing the lau.t depending upon the acts of a partiatlar assessee. Something that is illegal <:annot conuert itself into something legal by the act of a third person. \" 33. If we look into the principle of law laid down by the Honble Supreme Court as enumerated in the preceding paragraphs and when we look into the facts of the present case, it would clearly reflect that the Parliament had by virtue o[ the Finance Act 2021, brought certain amendments to the provisions of the Income Tax Act, more particularly, in respect of the manner in which the reassessment and the procedure to be adopted by the Income Tax Department. The amendment was brought with an intention to make the law more transparent and effective. The Hon'ble Supreme Court aiso while deciding the case of Ashish Agarwal, supra, as is discussed with in the preceding paragraph had specifically directed the Union of India to I 23 proceed further in terms of the substituted provisions brought in by way of Finance Act 2O2l . 34. What is also relevant to take note of the fact that the Hon'ble Supreme Court while exercising its power under Article 142 of the Constitution of [ndia has also not relaxed the applicability of the Finance Act 2021. Rather, the Hon'ble Supreme Court in very clear and unambiguous terms had held that the notices issued under the un-amended provisions, which were struck down by the High Court, shall be treated as a notice under new amended provisions and the Union of India was directed to proceed further from that stage in terms of the amended provisions of law. In spite of such specific clear directions by the Hon'ble Supreme Court, the Union of India for reasons best known again proceeded with the procedure as it stood prior to the amended provisions which came into force from 07.o4.2021. 35. In view of the aforesaid discussions, it is by now very clear that the procedure to be followed by the respondent-Department upon treating the notices issued lor reassessment being under Section 148A, the subsequent proceedings was mandatorily required to be undertaken under the substituted provisions as laid down under the Finance Act, 2021. In the absence of which, we are constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Finance Act, 2021, at the first I 24 instance. Secondly, it is also in dircct 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 rcspondent-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. 37. The preliminary objection raised by the petitione r is sustained and all these writ petitions stands allowed on this very jurisdictional issue. Since tJle impugned notices and orders are getting quashed on the point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings. 38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers under 25 Article 142 of the Constitution of India, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra. 39. No order as to costs As a sequel, miscellaneous petitions, pending if any, shall stand closed. P.SAM KOSHY, J LAXMI NARAYANA ALISHETTY, J Date: L4.O9.2O23 GSD l I 1 "