Telangana High Court Mandates Faceless Notices for Income Tax Reassessment

HYDERABAD: The Telangana High Court made it clear that notices issued by the income-tax department to assessees for reassessment of returns under Section 148A of the Income Tax Act must be done in a faceless manner.

The court said that issuing notice for reassessment and the subsequent proceedings was mandatory under the amended provision of the I-T Tax Act, 1961, as introduced under the Finance Act, 2021.

Citing the insertion of two schemes to the Central Board of Direct Taxes (CBDT) with respect to the proceedings to be drawn under Section 148A, the High Court said that there are two mandatory conditions for the I-T department —firstly, the allocation being made through the automated allocation system in accordance with the risk management strategy formulated by the Board under Section 148 and secondly that the re-assessment has to be done in a faceless manner to the extent provided.

A division bench headed by Justice P. Sam Koshy gave the direction while dealing with a batch of petitions related to a jurisdictional issue. The petitioners challenged the notices and orders issued by the I-T officer of Ward 141 at Hyderabad, directing for reassessment for escaped assessment and further deciding the cases.

Counsel for the petitioner said that the CBDT had issued the notification dated 29.03.2022, under a scheme called e-assessment of Income Escaping Assessment Scheme 2022 which came into force with effect on the same day.

The assessment, re-assessment, or re-computation under Section 147 of the I-T Act and the issuance of notice under Section 148A should be done through automated allocation. Further, the notices have to be issued in a faceless manner as provided under Section 144B.