Reassessment Quashed as Section 148A(1) Notice Issued by Jurisdictional Officer Instead of Faceless Assessing Officer

The ITAT Chandigarh allowed the assessee's appeal and quashed the reassessment order. It held that the notice issued under section 148A(1) was invalid since it was issued on 31.03.2022 by a Jurisdictional Assessing Officer (JAO) rather than the designated Faceless Assessing Officer (FAO), contrary to the applicable faceless assessment/reassessment scheme. The Tribunal observed that this jurisdictional defect vitiated the entire reassessment proceedings. Consequently, the reassessment order passed pursuant to such invalid notice was held to be void ab initio and unsustainable in law, resulting in the assessment being annulled in toto in favour of the assessee.

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1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether reassessment proceedings initiated by a notice under Section 148A, issued by the Jurisdictional Assessing Officer after the Finance Ministry notification dated 29.03.2022 (providing for faceless regime), are without jurisdiction and liable to be quashed.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity of notice under Section 148A issued by Jurisdictional Assessing Officer after notification dated 29.03.2022

Legal framework

2.1 The Tribunal noted the Finance Ministry notification dated 29.03.2022 mandating that notices under Section 148 / 148A are to be issued under the faceless regime, and considered the legal effect of this notification on notices issued thereafter by Jurisdictional Assessing Officers.

2.2 The Tribunal relied on the binding precedents of the Jurisdictional High Court, including decisions holding that, post-notification dated 29.03.2022, notices under Section 148 issued by Jurisdictional Assessing Officers (instead of by the faceless authority) are without jurisdiction and invalid.

Interpretation and reasoning

2.3 The Tribunal first admitted an additional ground raising the pure question of law regarding the jurisdiction of the officer issuing the notice under Section 148A(d), placing reliance on the principle that pure questions of law can be raised at any stage.

2.4 It was undisputed on the record that the notice under Section 148A(1) in the present case was issued on 31.03.2022 by the Jurisdictional Assessing Officer, i.e., after the notification dated 29.03.2022 came into force.

2.5 The Departmental Representative was unable to controvert the assessee's contention that, in view of the notification and the decisions of the Jurisdictional High Court (including in matters such as Disha Gupta and other cited writ petitions), issuance of such notice by the Jurisdictional Assessing Officer was contrary to the faceless scheme and without jurisdiction.

2.6 The Tribunal referred to and followed its own earlier decision in another appeal for a different assessment year, where identical facts existed and where it had already held, by respectfully following the Jurisdictional High Court, that a notice under Section 148 issued by the Jurisdictional Assessing Officer after 29.03.2022 was bad in law and the consequent reassessment order was liable to be quashed as without jurisdiction.

2.7 The Tribunal observed that there are multiple decisions of the Jurisdictional High Court on this precise point, including the case of Disha Gupta, and held itself bound to apply that law to the present appeal.

Conclusions

2.8 The Tribunal held that, since the notice under Section 148A(1) dated 31.03.2022 was issued by the Jurisdictional Assessing Officer instead of through the faceless mechanism mandated by the notification dated 29.03.2022, the notice was without jurisdiction.

2.9 Consequently, the reassessment order founded on such invalid notice was held to be bad in law and was quashed.

2.10 With the reassessment having been quashed on this legal ground, the appeal was allowed in favour of the assessee.

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