Himachal Pradesh High Court
Mk Steel Traders vs . Dcit And Ors. on 20 September, 2024
Author: Mamidanna Satya Ratna Sri Ramachandra Rao
Bench: Mamidanna Satya Ratna Sri Ramachandra Rao
MK Steel Traders Vs. DCIT and Ors.
.
CWP No. 10543 of 2024
20.09.2024Present: Mr. Sushant Keprate and Mr. Praveen Sharma,
Advocates, for the petitioner.
Mr. Neeraj Sharma and Mr. Ishan Kashyap,
Advocates, for the respondents.
CWP No. 10543 of 2024 & CMP No. 17583 of 2024
Notice to the respondents. Mr. Ishaan Kashyap,
Advocate, accepts notice for the respondents.
2. Prima-facie, we are of the view that the impugned
notice, Annexure P-5, issued under Section 148 of the Income Tax
Act, 1961 by the 1st respondent, who is the Jurisdictional Officer,
is wholly without jurisdiction having regard to Section 151-A,
introduced in the Income Tax Act, 1961 w.e.f. 01.11.2020 and the
notification issued on 28.03.2022 thereunder, which specifically
contemplates that there would be automated allocation system in
accordance with risk management strategy formulated by the
CBDT and it is not the case of the revenue that the 1st respondent
is an officer who has been so randomly allocated as per the
Scheme.
3. Similar view has been taken by the Telangana High
Court in a judgment dt. 14.09.2023, rendered in CWP No. 25903
of 2023 and other connected matters, titled as Kankanala
Ravindra Reddy Vs. Income Tax Office and two others in paras
.
25 to 27 & 31, which reads as under:-
"25. A plain reading of the aforesaid two
notifications issued by the Central Board of Direct
Taxes dated 28.03.2022 and 29.03.2022, 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 proceed-
ings 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 accord-
ance with the risk management strategy formulated
by the Board under Section 148 of the Act. Secondly,
the reassessing has to be done in a faceless manner
to the extent provided under Section 144B of the Act.
26. After the introduction of the above two
schemes, it becomes mandatory for the Revenue to
conduct/ initiate proceedings pertaining to reassess-
ment under Section 147, 148 & 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 re-
spect of reopening/re-assessment i.e., proceedings
under Section 148A of the Act.
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 Sec-
tion 148 of the Act were issued by the local jurisdic-
tional officer and not in the prescribed faceless man-
ner. The order under Section 148A(d) of the Act and
the notices under Section 148 of the Act are issued on
29.04.2022, i.e., after the "Faceless Jurisdiction of
the Income Tax Authorities Scheme, 2022."
and the "eAssessment of Income
Escaping Assessment Scheme, 2022 were introduced.
.
28 .........
29........
30.......
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 provided under
the law."
4.
The Bombay High Court in a judgment dt.
03.05.2024, rendered in Writ Petition No. 1778 of 2023, titled as
Hexaware Technologies Ltd. Vs. Assistant Commissioner of
Income Tax & others, has also taken a similar view in paras 35 &
39, which read as under:
"35.........The Scheme dated 29th March 2022 in
paragraph 3 clearly provides that the issuance of
notice "shall be through automated allocation"
which means that the same is mandatory and is
required to be followed by the Department and does
not give any discretion to the Department to choose
whether to follow it or not. That automated allocation
is defined in paragraph 2(b) of the Scheme to mean
an algorithm for randomised allocation of cases by
using suitable technological tools including artificial
intelligence and machine learning with a view to op-
timise the use of resources. Therefore, it means that
the case can be allocated randomly to any officer who
would then have jurisdiction to issue the notice under
Section 148 of the Act. It is not the case of respondent
no. 1 that respondent no. 1 was the random officer
who had been allocated jurisdiction.
36 to 38............
39. With reference to the decision of the Hon'ble
Calcutta High Court in Triton Overseas Private Lim-
.
ited (Supra), the Hon'ble Calcutta High Court has
passed the order without considering the Scheme
dated 29th March 2022 as the said Scheme is not re-
ferred to in the order. Therefore, the said judgment
cannot be treated as a precedent or relied upon to de-
cide the jurisdiction of the Assessing Officer to issue
notice under Section 148 of the Act. The Hon'ble Cal-
cutta High Court has referred to an Office Memoran-
dum dated 20th February 23023 being F No.
370153/7/2023 TPL which has been dealt with above.
Therefore, no reliance can be placed on the said Of-
fice Memorandum to justify that the JAO has juris-
diction to issue notice under Section 148 of the Act.
Further the Hon'ble Telangana High Court in the
case of Kankanala Ravindra Reddy vs. Income Tax
Officer has held that in view of the provisions of Sec-
tion 151A of the Act read with the Scheme dated 29th
March, 2022 the notices issued by the JAOs are
invalid and bad in law. We are also of the same view."
5. Therefore, there shall be interim stay of all further
proceedings pursuant to Annexure P-5, notice issued to the
petitioner, till the next date of hearing.
6. List on 24.10.2024.
Reply, if any, be filed in the meanwhile.
(M.S. Ramachandra Rao)
Chief Justice
(Satyen Vaidya)
Judge
20th September, 2024
(sushma)
