2024 (5) TMI 1453 - HC - Income Tax

Income Tax Notice Quashed for Non-Compliance: Jurisdictional vs. Faceless Authority Under Income Tax Act.

The Bombay HC quashed the notice issued under Section 148 of the Income Tax Act, 1961, due to a violation of Section 151A, as it was issued by the ... Validity of notice being issued by the JAO - applicability of provisions of Section 151A - HELD THAT:- Notice u/s 148 was issued by the JAO and not FAO and hence, is in violation of Section 151A - As held by this Court in Hexaware Technologies Limited (2024 (5) TMI 302 - BOMBAY HIGH COURT) this notice will be invalid. Mr. Singh agrees. Therefore, the notice issued u/s 148 of the Act is hereby quashed and set aside. In case any re-assessment order is passed, the same also will stand quashed. So also, consequential demand notices or penalty notices will also stand quashed and set aside. Petition disposed accordingly. Issues:Violation of Section 151A of the Income Tax Act, 1961 due to notice issued by Jurisdictional Assessing Officer instead of Faceless Assessing Officer.Analysis:The judgment delivered by the High Court of Bombay addressed the issue of the validity of a notice issued under Section 148 of the Income Tax Act, 1961. The petitioner contended that the notice issued by the Jurisdictional Assessing Officer, rather than the Faceless Assessing Officer, violated Section 151A of the Act. The petitioner relied on the judgment in the case of Hexaware Technologies Limited v/s. Assistant Commissioner of Income Tax Circle 15(1)(2) Mumbai and Ors., wherein it was held that such a notice would be invalid. The respondent, represented by Mr. Singh, acknowledged the petitioner's argument. Consequently, the court quashed and set aside the notice dated 31st March 2023 issued under Section 148 of the Act. The judgment further stated that any re-assessment order, as well as consequential demand notices or penalty notices, would also be quashed and set aside in light of the invalid notice.Moreover, the court disposed of the petition in accordance with the decision rendered on the issue. It was noted that any contentions raised in the petition that were not covered by the Hexaware Technologies Limited case were kept open to be raised in the future if necessary. The judgment emphasized the importance of compliance with the provisions of the Income Tax Act and the significance of ensuring that notices are issued by the appropriate authority as mandated by the law. The decision highlighted the consequences of non-compliance, leading to the nullification of subsequent actions taken based on an invalid notice. Ultimately, the court's ruling provided clarity on the procedural requirements for issuing notices under the Income Tax Act, reinforcing the principles of legality and due process in tax matters.