[Faceless appeal scheme] Keep appeals seeking hearing in abeyance: Bombay High Court tells Central government

The Bombay High Court on Monday urged the Central government to refrain from holding hearings at the National Faceless Appeal Centres till the Faceless Appeal Scheme is reconsidered (Chamber of Tax Consultants v. Central Board of Direct Taxes & Anr.)..A Bench of Chief Justice Dipankar Datta and Justice MS Karnik said that if the government does not stop hearings voluntarily, the Court will have to pass orders to that effect.The Court was hearing a public interest litigation (PIL) petition challenging the constitutional validity of the 'Faceless Appeal Scheme' along with certain amended provisions of the Income Tax Act, 1961.While the petitioners had concluded their submissions last week, the Central government was giving its response to the plea..Additional Solicitor General Anil Singh raised preliminary objections against the plea challenging the scheme.He stated that the scheme formulated by the Central government had the Commissioner of Income Tax (Appeal) on the appeal units which adjudicated upon the appeals.The ASG submitted that out of the total appeals, about 56,104 appeals had been disposed of so far under the new scheme, without any request for personal hearing..The Bench, however, was not satisfied with the data and demanded how many appellants had made requests for personal hearing.“You cannot present one side of the coin, but not the other side! Income tax department is the most effective department and yet you cannot provide us with this information (about appeals)! We want the figures first, before we proceed to hear your arguments. Hearing was available but it was available upon certain circumstance of the appeal units. So the question is how do you find out what are those circumstances?” the Bench remarked..The ASG stated that while the Supreme Court did not specifically bar hearings by individual High Courts in the transfer petition pending before it, the petition before the top court would be rendered infructuous if the High Court passes an order.He added that the issue was an academic discussion and there was no foundation of facts by the petitioners.He reiterated that the parliament was having a re-look at the scheme, and it would come to a conclusion in another month. In light of this, he sought deferment of the hearing..The Court was not impressed by the preliminary objections raised by the Centre about the transfer petition being rendered infructuous.The Bench emphasised that till the Centre re-considers the scheme, any appellant who asks for personal hearing should not be deprived of the same.“We have to balance both the parties,” the Bench said..The Bench indicated that it was inclined to pass an order directing the Central government to follow Section 250(2) of the Income Tax Act, which provides for the right of an appellant to be heard.The Bench mused what would happen to the appeals that have been decided within the scheme in the event the Centre revokes the scheme altogether..The Bench suggested that the ASG make a statement that the appeals being filed seeking personal hearing be allowed as per Section 250(2) of the Income Tax Act, while those who want to be heard as per the provisions of the faceless scheme can continue to do so.“Appeals of assessees who seek to be heard in course of decision on the appeal would be kept aside till such time, a decision is given by the Parliament or the transfer petition is heard by Supreme Court. Instructions can be taken on this,” the Bench suggested to the ASG..The ASG sought time to take instructions, as the requisite authorised officers were not present in Court.The Bench posted the matter for hearing on December 3, 2021.