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Petition in Delhi High Court challenges Faceless Income Tax Appeal Scheme [Read Order]

Delhi High Court - Faceless Income Tax Appeal Scheme - Income Tax Appeal Scheme - petition - Taxscan

The Delhi High Court has issued notice on a petition challenging the Faceless Income Tax Appeal Scheme, 2020.

The government launched ‘Faceless Income Tax Appeal’ with the objective to ease compliance and reduce physical interface between the assessee and the Income Tax Department.

It was said that out of 4.6 lakh appeals pending at the level of the Commissioner (Appeals) in the Income Tax Department, about 4.05 lakh appeals (88% of the total) will be handled under the new mechanism. Almost 85% of the present strength of Commissioners (Appeals) will be utilized for disposing of cases under the faceless appeal mechanism.

The petitioner, Lakshya Budhiraja filed the petition seeking a direction to the respondents authorities to grant an opportunity of hearing to all taxpayers or assessee and to hold that the same is not at the discretion of the Chief Commissioner or the Director-General as proposed in the Faceless Appeal Scheme, 2020 notified from 25th September, 2020.

The petitioner further prays for a declaration that the Faceless Appeal Scheme, 2020 is discriminatory, arbitrary, and illegal to the extent it provides a virtual hearing as per the circumstances to be approved by the administrative authorities under the Income Tax Act, 1961.

The petitioner contended that the mechanism is discriminatory and is against the settled principles of law and in violation of Article 14 of the Constitution of India. He further submits that the right to provide or not to provide a hearing in the matter is also against the principle of Audi alteram partem i.e. no person should be judged without a fair hearing in which each party is given an opportunity to respond to the evidence against them.

The division bench of Justice Manmohan and Justice Sanjeev Narula issued notice to the Government. The matter will now be heard on December 15.

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