Madras High Court issues notice to Centre

Madras High Court issues notice to Centre

The move comes on the plea challenging the constitutional validity of the Faceless Assessment Scheme

The Madras High Court issued a notice to the Government of India on a plea challenging the constitutional validity of the Faceless Assessment Scheme (FAC).

A bench comprising Chief Justice Sanjib Banerjee and Justice PD Audikesavulu directed that a copy of the petition be sent to the Attorney General's office. It also restrained the Income Tax Department from recovering the demand made in excess of Rs.49 crores on the petitioner, for now.

The petitioner, Navitas LLP had challenged the Income Tax Act of 1961 that was inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. FAC was transformed into a statutory scheme, providing a detailed and cumbersome procedure for completing the assessment.

The petitioner contended that the scheme is arbitrary and opaque, contrary to provisions of the Income Tax Act, contrary to the principles of administrative law and natural justice, and in violation of the Constitution of India.

"It has suffered a wholly arbitrary assessment order which was bereft of reasons and showed non-application of mind after being subjected to the Faceless Assessment Scheme," the petition read. It further stated, "The entire assessment procedure under the scheme is opaque, arbitrary and suffers from judicial infirmities. It has led to a wholly unwarranted demand in the case of the petitioner."