Plea filed in Kerala HC challenging Faceless Appeal Scheme, 2020 [Read Petition]

The plea has been filed in Kerala High Court challenging Faceless Appeal Scheme, 2020.

The Petitioner, Balachandran Aniyath challenges the “Faceless Appeal Scheme, 2020” framed by Fourth Respondent under section 250[6B] of the Income Tax Act - as per Notification dated 25.09.2020 which replaced the conventional procedure relating to disposal of appeals u/s 250 of the Income Tax Act which in effect, replaces the appellate authority itself with an “Appeal Unit” – constituted “with one or more Commissioner (Appeals) as considered necessary by the Board” set up by “National Faceless Appeal Centre” or “Regional Faceless Appeal Centers”. Quite strangely, the Scheme gives liberty to National Faceless Appeal Centre under the administrative control of Principal Chief Commissioners and/or Principal Director General to even “review” or ”examine” the “draft appellate order” prepared by “Appeal Unit” and to either accept the same or have the same examined by a different “appeal unit” other than the one which prepared the draft appellate order which goes against all cannons of jurisprudence governing appellate remedies.

In fact, the Scheme would indicate that the final appellate order is to be issued by “National Faceless Appeal Centre” – after the above “exercise” of reviewing  “draft orders” prepared by “appeal unit” consisting of one of more Commissioner [Appeals] despite the fact that u/s 246A, an appeal lies to the Commissioner [Appeals].

The Petitioner against whom an assessment order has been passed for 2010.11 where he has been subjected to capital gains taxes on the sale of property which admittedly was purchased in his name by 17 co-owners including his son-in-law using their funds – purchase having been made in his name for the reason that only agriculturist could purchase agricultural lands in Karnataka  – has filed an appeal against the said order before Second Respondent now finds that his appeal has been taken up for hearing by “National Faceless Appeal Centre” under the above Scheme. The Scheme is totally flawed as indicated above and for the further reason that it has done away with the mandatory requirement that the appellant should be given a personal hearing thus violating all principles of natural justice. Consequently, Petitioner challenges the Scheme as well as assessment order which clearly shows the same income being assessed in the hands of two sets of assessees.

It is submitted that for taking a fair decision, it becomes all the more necessary to give an oral hearing to the party affected by the assessment order and as such a requirement of an oral hearing is implicit in the concept of fairness in the quasi-judicial functioning and administration.

It is settled law that a Sub-Ordinate Legislation cannot be given retrospective effect when the parent legislation had not specifically authorised the creation of legislation with retrospective effect.

To Read the full text of the Petition CLICK HERE

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