The Madras High Court on Wednesday issued notice on a petition challenging the Constitutional validity of the Faceless Assessment Scheme introduced in 2020 by insertion of Section 144B in the Income Tax Act, reports Bar & Bench legal portal. The petition, filed by a limited liability partnership, says the Faceless Assessment Scheme was transformed into a statuary scheme with the insertion of Section 144B, which provides a detailed and cumbersome procedure for completing the assessment.
The petition further stated that the scheme is arbitrary and opaque, contrary to provisions of Income Tax Act, contrary to the principles of administrative law and natural justice and in violation of Articles 14, 19 (1)(g), 21, 265 of the Constitution of India. With the introduction of the Faceless Assessment Scheme, a jurisdictional assessing officer will no longer be involved in the completion of an assessment. Instead, the entire assessment will be under the control of the “National Faceless Assessment Centre”, whose constitution has not been defined under the Income Tax Act, the petitioner submitted.
The assessment will be conducted by the “assessment unit”, allocated by the National Centre based on an automated allocation system. No guidelines on the role and constitution of the assessment is provided in Section 144b (3) (iii) read with 144B (4), the petitioner further submitted. Following the submissions made for the petitioner by Advocate Sandeep Bagmar on Wednesday, the court has restrained the Income Tax Department from recovering the demand made in excess of ₹49 crores on the petitioner until the next hearing.
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