The Delhi High Court dismissed a batch of petitions by Rahul Gandhi, Sonia Gandhi, Priyanka Gandhi Vadra, Aam Aadmi Party (AAP), and other and other charitable trusts challenging the Income Tax department’s decision of transferring their tax assessments from faceless assessment to its Central Circle.
The primary issue that arises for consideration in the present batch of writ petitions is whether the assessments of the petitioners could be transferred to the Central Circle by way of the impugned orders passed under Section 127 of the Income Tax Act, 1961 without sanction of the Central Board of Direct Taxes (‘CBDT’).
It is pertinent to mention that the present batch of writ petitions has been preferred by five Charitable trusts viz. Sanjay Gandhi Memorial Trust, Jawahar Bhawan Trust, Rajiv Gandhi Foundation, Rajiv Gandhi Charitable Trust, Young India as well as three individuals viz. Mrs. Sonia Gandhi, Mr. Rahul Gandhi, Mrs. Priyanka Gandhi Vadra and a political party – Aam Aadmi Party (AAP).
The three Congress leaders opposed the transfer of the tax assessment to the central circle in 2021, arguing that only the rarest of cases go out of faceless assessment and that during the proceedings, the Congress leaders underlined that even cases that are taken out of faceless assessment are marked to the assessment officer concerned and not the central circle, which only happens in cases of search and seizure.
The Counsel for the Aam Aadmi Party contended that the cogent rights have been embedded in the statutory framework under which the Faceless Assessment Mechanism has been incorporated in the Scheme of the Income Tax Act itself and any deprivation of such rights qua an assessee will obviously affect the assessee prejudicially.
The Solicitor General and Additional Solicitor General submitted that stated that the reason mentioned in the impugned orders is ‘better coordination, effective investigation and meaningful assessment’ which reflects administrative convenience and exigency viz. the need of the assessment taking place under the same Assessing Officer and any future possibility of conflicting views/ treatment in similar transactions is averted.
A Division Bench of the Delhi High Court comprising Justice Manmohan and Justice Dinesh Kumar Sharma observed that “The assessments of the petitioners have been transferred to the Central Circle in accordance with law by way of the impugned orders passed under Section 127 of the Income Tax Act. Accordingly, the present writ petitions along with pending applications are dismissed, without any order as to costs and the interim orders passed by this Court stand vacated.”
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