Relief to TVS: Madras HC Quashes Income Tax Notices Issued by JAO, Upholds Mandatory Notice By FAO under Faceless Assessment [Read Order]
The Court quashed income tax notices issued by the Jurisdictional Assessing Officer (JAO) to TVS Credit Services Limited and ruled that notices must be issued by the Faceless Assessment Officer (FAO)
TVS - Mandatory Notice - Income Tax Notices
TVS - Mandatory Notice - Income Tax Notices
In a Recent ruling, the Madras High Court has quashed income tax notices issued by the Jurisdictional Assessing Officer (JAO) and affirmed that such notices must be issued by the Faceless Assessment Officer (FAO) under the mandatory faceless assessment regime.
TVS Credit Services Limited, the petitioner, filed a writ petition under Article 226 of the Constitution of India, challenging the validity of income tax notices issued by the JAO. The issue arose from conflicting rulings by Single Judges.
One of the Single Judges held that notices issued by the JAO were valid and that faceless assessment by the FAO was not mandatory. However in batch cases, another Single Judge followed the Bombay High Court’s ruling in Hexaware Technologies Ltd, which mandated that notices must be issued by the FAO, rendering JAO-issued notices invalid.
The Counsel for the petitioner argued that law laid down in the Hexaware Technologies Ltd will apply to the present case.
The Additional Solicitor-General, representing the Revenue, contended that the Hexaware ruling was not accepted by the IncomeTax Department. The counsel also added that a special leave petition (SLP) had been filed before the Supreme Court against the Bombay High Court’s decision.
However, the Additional Solicitor-General stated that no stay had been granted on the Hexaware judgment, making it binding as of the hearing date.
The Division Bench comprising Justice K.R. Shriram (Chief Justice) and Justice Sunder Mohan clarified that the Hexaware ruling currently governs, but if the Supreme Court reverses it, the parties would be subject to the Apex Court’s decision.
The Division Bench ruled that notices issued by the JAO were invalid. It quashed the impugned notices and set aside related proceedings, keeping all rights and contentions of the parties open. The Revenue was granted liberty to seek revival of the petitions if it succeeds before the Supreme Court.
The bench also noted that issues not covered by the Hexaware judgment remain open for adjudication at the appropriate stage. The writ petitions were disposed of in favor of the assessee, TVS Credit Services Limited, with no order as to costs. All connected interim applications were also closed.
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