HC Notice to Center on Petition Challenging Anonymous Income Tax Imposition


The Madras High Court has issued an opinion to the Union government on a lawsuit challenging the constitutional validity of the faceless valuation system under the Income Tax Act.

The court barred the tax department from collecting an additional claim and postponed the case until November 11.

The petition challenged the faceless assessment regime as being patently arbitrary, opaque, contrary to established principles of natural justice and administrative law in general, and violating equality before the law provisions among others in the Constitution.

Sandeep Sehgal, Director of Tax and Regulatory, AKM Global, a tax and consultancy firm, said: “It should be borne in mind that the intention of the faceless valuation measure was to create a system taxpayer friendly. However, it turned out unlike the same, as there were several instances where income grew without adhering to the principle of natural justice. “

The current petition challenges faceless assessments on related grounds such as a personal discretionary hearing, an opaque risk management strategy and no legal basis for automated case assignment, he said.

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