Faceless assessment notices must be issued by FAO, not Jurisdictional Officer, under Section 144B; assessee succeeds

HC resolved the divergence between two Single Judges by holding that, in line with Hexaware Technologies Ltd (Bom HC), it is mandatory for the Faceless Assessment Officer (FAO) to issue notices in faceless assessment proceedings. Notices issued by a Jurisdictional Assessing Officer (JAO) are invalid. Applying this principle, the HC held that the impugned notice issued by the JAO was bad in law and disposed of the petition in favour of the assessee. Other issues not covered by Hexaware were expressly kept open for adjudication at an appropriate stage.

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The petition arose from conflicting single-judge views on whether reassessment notices must be issued by the Faceless Assessment Officer (FAO) or could validly be issued by the Jurisdictional Assessing Officer (JAO). One earlier decision held FAO issuance was not mandatory; another, following Bombay High Court in Hexaware Technologies Ltd v. ACIT and related cases, held that notices issued by JAO were invalid. The Division Bench resolved the conflict by expressly following Hexaware Technologies Ltd and subsequent Bombay High Court decisions including BMC Software India (P) Ltd and Kairos Properties (P) Ltd. It held that "it is mandatory for the FAO to issue the concerned notices and issuance thereof by the JAO would make the notice invalid." It was noted that Special Leave Petitions against these Bombay decisions are pending before the Supreme Court, but there is presently no stay. The impugned notice, having been issued by the JAO, was quashed and set aside. All other issues not covered by Hexaware are kept open, with liberty to seek revival if the Revenue succeeds before the Supreme Court.

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