Faceless Assessment: Retrospective repeal of Section 144B(9) – should be read down?

Manuj Sabharwal & Abhijeet Bhatt – [2022] 137 taxmann.com 276 (Article)

The Hon’ble Supreme Court in National Faceless Assessment Centre v. Mantra Industries Ltd. has stayed the operation of order of the Hon’ble Bombay High Court by getting persuaded / recording submissions of the Revenue on the ground that s. 144B(9) of the Income-tax Act, 1961 (“Act”) is repealed retrospectively w.e.f. 1st April 2021 by Finance Act, 2022, and also that the taxpayer should have availed a statutory appellate remedy against the adverse assessment order.

As a matter of fact, the Hon’ble Bombay High Court had set aside the order passed by the assessing officer owing to the applicability of s. 144B(9) which provides that the assessment order shall be non-est if the assessment is not made in accordance with s. 144B.

From the bare perusal of the order of the Hon’ble Bombay High Court, it is not coming out very clearly that the assessment was remanded back to the assessing officer, as was done by other High Courts in similar matters, and as a fortiori, a plausible argument can be taken that the High Court has actually quashed the assessment. Possibly, this seems to be the reason why the matter travelled to the Supreme Court as serious prejudice has been caused to the Revenue.

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