Tax consultants challenge constitutional validity of ‘Faceless Appeal Scheme’ in Bombay HC

One of the oldest industry bodies of professionals has argued that there is a reasonable apprehension in the mind of the taxpayers that this scheme will harm the overall decision-making process, and the persons to be affected the most would be the assesses.

“The concept of e-proceeding and the faceless proceeding is many a time detrimental even in the case of assessments,” said a person aware of the petition. “Stretching this concept to the appellate proceedings is something that will not inspire confidence in the masses.”

The primary contentions raised by the consultants’ body is that if even at the first appellate stage, an opportunity for a personal hearing is not granted, then the assessee would go without any oral hearing opportunity at two stages. “In such cases, the first time when an authorised representative’s voice is heard will be before the Income-tax Appellate Tribunal, which is the last fact-finding authority,” the petitioners argued.

“Since this matter involves serious questions of law and challenge the constitutional validity of certain amendments, we intend to dispose of the writ petition at the admission stage itself,” said the division bench Justice KR Shriram and Justice Abhay Ahuja on August 5.

The court has issued a notice to the Attorney General for India to clarify the government’s stand on the issue and has adjourned the case further to September 7.

When contacted, Vipul Joshi, advocate appearing for the Chamber of Tax Consultants along with Senior Advocate Arvind Datar, refused to comment on the case. Ketan L. Vajani, president of the chamber, also declined to comment since the matter is subjudice.

Founded in 1926, the Chamber of Tax Consultants has about 4000 members, including Advocates, Chartered Accountants and Tax Practitioners.

Amit Maheshwari, Partner AKM Global, a tax consulting firm, said, among several principles of natural justice, the right to be heard is one of the sacrosanct rights for a taxpayer to present its case during any matter pending before any judicial authority.

“Some issues are difficult to explain by way of written submission in a physical hearing, and there are arguments/ debates that lead to clearance of many doubts and issues of the appellate authorities. One has to remember that it’s the taxpayer who has filed an appeal, and she has to make out his case before the first appellate authority,” said Maheshwari.