Income Tax--Current Issues
Practice Update
CA V.K. Subramani
VALIDITY OF REASSESSMENT AFTER CHANGE OF CASE TO
ANOTHER JURISDICTIONAL AO
Section 130 of the Income Tax Act, 1961 was inserted by the
Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act,
2020 w.e.f. 1.11.2020. It empowers the Central Government to make a scheme for
the purposes of section 120, 124, 127 and 129 to impart greater efficiency,
transparency and accountability by (i) eliminating the interface between the
Income-tax authority and assessee or any other person, to the extent
technologically feasible; (ii) optimizing utilization of resources through
economies of scale and functional specialization; (iii) introducing team based
exercise of powers and performance of functions by two or more income-tax
authorities, concurrently, in respect of any area or persons or classes of
persons or incomes or classes of income or cases or classes of cases, with
dynamic jurisdiction.
The Central Government vide Notification S.O. 1400(E),
dated 28-3-2022 has notified Faceless Jurisdiction of Income Tax
Authorities Scheme, 2022. Thus, provisions of sections 120, 124, 127 and 129
are brought under single umbrella viz. the faceless jurisdiction Scheme.
Madras High Court in the case of Charu K. Bagadia v.
Asst. CIT 2022 TaxPub(DT) 4423 (Mad-HC) dealt with a case where the
assessment jurisdiction was transferred after a notice under section 148 was
issued by the income tax authority who held jurisdiction over the assessee
previously. The income tax authority to whom the proceedings of the assessee
got transferred did not issue a notice under section 148 but continued the
proceedings by issuing a notice under section 143(2). The Court held that
section 129 would apply only when there is change in incumbent within the same
jurisdiction. Since the proceedings were transferred to another income tax
authority due to change of jurisdiction, a fresh notice under section 148 ought
to have been issued. The facts of the case relate to assessment year 2011-12.
This decision would not be applicable now as dynamic
jurisdiction is applicable by virtue of faceless jurisdiction, which is a
recent development in tax administration.