MUMBAI: In a win for Vodafone Concept Restricted, Bombay excessive courtroom on Wednesday held that an evaluation order of August 31, 2023 handed by the Faceless Assessing Officer (FAO) two years after instructions issued by a dispute decision panel (DRP) had been “time barred’’ and unsustainable. The HC thus directed Revenue Tax authorities to refund to Vodafone Concept, over Rs 1128 crore in taxes paid within the evaluation 12 months 2016-17, with curiosity.The method needs to be accomplished in 30 days, a division bench of Justices Ok R Shriram and Neela Gokhale directed.
Pulling up the FAO, the HC held, “If the provisions of Part 144C—requiring closing orders in 30 days– as mandated by the Statute aren’t strictly adhered to, your entire object of offering for an alternate redressal mechanism within the type of DRP stand defeated’’ .
The Judgment pronounced on Wednesday and authored by Justice Gokhale additionally strongly beneficial an in depth inquiry towards the FAO for failure to abide by the authorized mandate and the :lack of diligence on a part of officers involved…within the current assesment’’.
“Strict motion ought to be taken towards individuals accountable for the laxity and lethargy displayed which has prompted an enormous loss to the exchequer and in flip to the residents of this nation,’’ added the judgment directing {that a} copy be circulated to the CBDT and Principal Secretary, Union Finance Ministry.
Vodafone Concept Ltd had on June 8, 2023 this 12 months, as successor of Vodafone Cellular Providers Ltd, petitioned the HC towards the Central Processing Centre, Bengaluru, Assistant Commissioner of Revenue-Tax, Mumbai and others. Via its senior counsel J D Mistri, the mobile operators referred to as in query the failure of CPC and IT officers to refund the quantity it paid for 2016-17, in extra of respectable tax due on returned revenue.
The HC stated, “The case of Petitioner is sort of elementary and we’re constrained to watch the entire apathy and negligent strategy of the assessing officer involved in discharging his duties, in accordance with the provisions of Revenue Tax Act, 1961.’’ It added, “Laxity on this regard has a propensity to destroy and produce to naught any efficient system put in place by the Authorities for environment friendly and clear administration of taxation legal guidelines and its laws. Such an hostile impact on the exchequer is revealed within the current case.’’
The AO handed a draft order on this case on December 29, 2019, towards which the corporate filed an objection earlier than the DRP on January 27, 2020. On March 25, 2021 the DRP issued instructions which had been uploaded the identical day on the Revenue Tax Enterprise Utility (ITBA) portal.
The grievance of Vodafone Concept primarily was that the AO didn’t cross the ultimate order when it comes to the instructions of DRP inside 30 days, the interval of limitation prescribed by Part 144C(13) of the Act and consequently stated it’s entitled to refund with curiosity. Mistri stated as soon as DRP order is uploaded and is accessible, when no order is handed in a month, the revenue declared by Vodafone Concept is deemed to be accepted by the Revenue Tax Division and petitioner, entitled to refund of extra tax.
After the petition was filed, the FAO handed its order on August 31, 2023, the HC famous. Defending the actions of the division, advocate Devvrat Singh for the Income stated the FAO obtained the 2021 order solely on August 23, 2023 within the ‘case historical past noting’ after which inside a month handed the order.
The HC after analysing the legislation and the evaluation continuing scheme below e-assessment scheme stated, “any discover, summons, order is deemed to have been obtained by the FAO as soon as it’s out there to the NeAC.’’
Additionally highlighting the scheme of the Act was to make sure speedy disposal of disputes below, the HC held, “As soon as the statute has prescribed a limitation interval for passing the ultimate order, it’s anticipated that the inner process of the division ought to mould itself to provide which means to and act in assist of the supply. Any procedural defect (there’s none on this case) within the inner mechanism of the working of E-assessment Scheme, can’t function towards the curiosity of assessee. Therefore, the FAO can’t be, believed that the DRP route was obtained by him solely on twenty third August 2023 regardless of being uploaded on the ITBA portal on twenty fifth March 2021. The failure on the a part of division to comply with the process below Part 144C of the Act isn’t merely a procedural irregularity, however is an illegality and vitiates your entire continuing.’’
The HC after listening to the IT counsel and going by two affidavits, one by Chief Commissioner of Revenue Tax (Worldwide Taxation and Switch Pricing) West Zone, Mumbai and one other by JCIT, Ratlam famous that each officers agree that the DRP instructions as soon as uploaded on the ITBA portal are robotically seen to the FAO, if any evaluation work merchandise is pending associated to a specific PAN.
The HC stated, “Admittedly evaluation proceedings of Petitioner had been pending. Thus, undoubtedly the DRP instructions uploaded on the ITBA portal had been readily and clearly seen and accessible to the FAO of assessee.’’
The HC stated, “There is no such thing as a whisper of any rationalization as to why the FAO, who was seized with the pending evaluation of Petitioner, remained inactive and silent for 2 lengthy years and swung into motion solely when details about submitting of this writ petition was uploaded on the CHN.’’
What Bombay HC stated:
• You will need to word that your entire evaluation proceedings are ruled by the Faceless Evaluation Mechanism below the scheme often known as the e-Evaluation Scheme (“eAS”), 2019 as notified by the Ministry of Finance (Division of Income) on twelfth September 2019.
• The salient options of the scheme embrace defining the scope of scheme, jurisdiction of e-Evaluation Centre, process for evaluation, penalty proceedings for non-compliance amongst different options.
• The Central Authorities amended the FAS of 2019 and the primary modification got here into impact on seventeenth February 2021.
• All communication among the many evaluation unit, overview unit, verification unit or technical unit or with the assessee or with every other individual with respect to the data or paperwork or proof or every other particulars, as could also be vital for the needs of constructing an evaluation below the scheme shall be by the Nationwide e-Evaluation Centre.”
• Thus, any discover, summons, order is deemed to have been obtained by the FAO as soon as it’s out there to the NeAC
• Part 144C of the Act is a self contained provision which carves out a separate class of assesses– ‘eligible assessee’.
• Part 144C of the Act was inserted within the Finance Act of 2009 and got here into impact from 1st October 2009.
• The intention of part 144C as talked about within the finance invoice of 2009: With a view to supply speedy disposal, it’s proposed to amend the Revenue-tax Act in order to create an alternate dispute decision mechanism inside the income-tax division and accordingly, part 144C has been proposed to be inserted in order to supply inter alia the Dispute Decision Panel instead dispute decision mechanism.”
Pulling up the FAO, the HC held, “If the provisions of Part 144C—requiring closing orders in 30 days– as mandated by the Statute aren’t strictly adhered to, your entire object of offering for an alternate redressal mechanism within the type of DRP stand defeated’’ .
The Judgment pronounced on Wednesday and authored by Justice Gokhale additionally strongly beneficial an in depth inquiry towards the FAO for failure to abide by the authorized mandate and the :lack of diligence on a part of officers involved…within the current assesment’’.
“Strict motion ought to be taken towards individuals accountable for the laxity and lethargy displayed which has prompted an enormous loss to the exchequer and in flip to the residents of this nation,’’ added the judgment directing {that a} copy be circulated to the CBDT and Principal Secretary, Union Finance Ministry.
Vodafone Concept Ltd had on June 8, 2023 this 12 months, as successor of Vodafone Cellular Providers Ltd, petitioned the HC towards the Central Processing Centre, Bengaluru, Assistant Commissioner of Revenue-Tax, Mumbai and others. Via its senior counsel J D Mistri, the mobile operators referred to as in query the failure of CPC and IT officers to refund the quantity it paid for 2016-17, in extra of respectable tax due on returned revenue.
The HC stated, “The case of Petitioner is sort of elementary and we’re constrained to watch the entire apathy and negligent strategy of the assessing officer involved in discharging his duties, in accordance with the provisions of Revenue Tax Act, 1961.’’ It added, “Laxity on this regard has a propensity to destroy and produce to naught any efficient system put in place by the Authorities for environment friendly and clear administration of taxation legal guidelines and its laws. Such an hostile impact on the exchequer is revealed within the current case.’’
The AO handed a draft order on this case on December 29, 2019, towards which the corporate filed an objection earlier than the DRP on January 27, 2020. On March 25, 2021 the DRP issued instructions which had been uploaded the identical day on the Revenue Tax Enterprise Utility (ITBA) portal.
The grievance of Vodafone Concept primarily was that the AO didn’t cross the ultimate order when it comes to the instructions of DRP inside 30 days, the interval of limitation prescribed by Part 144C(13) of the Act and consequently stated it’s entitled to refund with curiosity. Mistri stated as soon as DRP order is uploaded and is accessible, when no order is handed in a month, the revenue declared by Vodafone Concept is deemed to be accepted by the Revenue Tax Division and petitioner, entitled to refund of extra tax.
After the petition was filed, the FAO handed its order on August 31, 2023, the HC famous. Defending the actions of the division, advocate Devvrat Singh for the Income stated the FAO obtained the 2021 order solely on August 23, 2023 within the ‘case historical past noting’ after which inside a month handed the order.
The HC after analysing the legislation and the evaluation continuing scheme below e-assessment scheme stated, “any discover, summons, order is deemed to have been obtained by the FAO as soon as it’s out there to the NeAC.’’
Additionally highlighting the scheme of the Act was to make sure speedy disposal of disputes below, the HC held, “As soon as the statute has prescribed a limitation interval for passing the ultimate order, it’s anticipated that the inner process of the division ought to mould itself to provide which means to and act in assist of the supply. Any procedural defect (there’s none on this case) within the inner mechanism of the working of E-assessment Scheme, can’t function towards the curiosity of assessee. Therefore, the FAO can’t be, believed that the DRP route was obtained by him solely on twenty third August 2023 regardless of being uploaded on the ITBA portal on twenty fifth March 2021. The failure on the a part of division to comply with the process below Part 144C of the Act isn’t merely a procedural irregularity, however is an illegality and vitiates your entire continuing.’’
The HC after listening to the IT counsel and going by two affidavits, one by Chief Commissioner of Revenue Tax (Worldwide Taxation and Switch Pricing) West Zone, Mumbai and one other by JCIT, Ratlam famous that each officers agree that the DRP instructions as soon as uploaded on the ITBA portal are robotically seen to the FAO, if any evaluation work merchandise is pending associated to a specific PAN.
The HC stated, “Admittedly evaluation proceedings of Petitioner had been pending. Thus, undoubtedly the DRP instructions uploaded on the ITBA portal had been readily and clearly seen and accessible to the FAO of assessee.’’
The HC stated, “There is no such thing as a whisper of any rationalization as to why the FAO, who was seized with the pending evaluation of Petitioner, remained inactive and silent for 2 lengthy years and swung into motion solely when details about submitting of this writ petition was uploaded on the CHN.’’
What Bombay HC stated:
• You will need to word that your entire evaluation proceedings are ruled by the Faceless Evaluation Mechanism below the scheme often known as the e-Evaluation Scheme (“eAS”), 2019 as notified by the Ministry of Finance (Division of Income) on twelfth September 2019.
• The salient options of the scheme embrace defining the scope of scheme, jurisdiction of e-Evaluation Centre, process for evaluation, penalty proceedings for non-compliance amongst different options.
• The Central Authorities amended the FAS of 2019 and the primary modification got here into impact on seventeenth February 2021.
• All communication among the many evaluation unit, overview unit, verification unit or technical unit or with the assessee or with every other individual with respect to the data or paperwork or proof or every other particulars, as could also be vital for the needs of constructing an evaluation below the scheme shall be by the Nationwide e-Evaluation Centre.”
• Thus, any discover, summons, order is deemed to have been obtained by the FAO as soon as it’s out there to the NeAC
• Part 144C of the Act is a self contained provision which carves out a separate class of assesses– ‘eligible assessee’.
• Part 144C of the Act was inserted within the Finance Act of 2009 and got here into impact from 1st October 2009.
• The intention of part 144C as talked about within the finance invoice of 2009: With a view to supply speedy disposal, it’s proposed to amend the Revenue-tax Act in order to create an alternate dispute decision mechanism inside the income-tax division and accordingly, part 144C has been proposed to be inserted in order to supply inter alia the Dispute Decision Panel instead dispute decision mechanism.”
