Faceless assessment scheme noncompliance in reopening proceedings invalidates notice and vitiates reassessment, petition allowed.

Non-compliance with the faceless assessment scheme governing reassessment notices was held to vitiate reopening proceedings: because the prescribed scheme operates as subordinate legislation governing conduct under reassessment provisions, issuance of a notice by the local jurisdictional assessing officer rather than under the faceless procedure amounted to jurisdictional error and rendered the notice invalid. Reliance on recent precedents applying the same principle supported quashing of the impugned proceedings, and the petition challenging the notice was allowed with the consequence that the reassessment initiated on that notice was set aside.

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Issues: (i) Whether a notice under Section 148 of the Income-tax Act, 1961 issued by the Jurisdictional Assessing Officer (JAO), instead of a Faceless Assessing Officer (FAO), in contravention of Section 151A and the Notification dated 29 March 2022 (Faceless Scheme), is valid.

Analysis: The Scheme notified by the Central Government pursuant to Section 151A introduces a faceless mechanism and mandates issuance of notices and related proceedings through automated allocation to the officer allocated by the Scheme. The Division Bench decision in Hexaware Technologies (reported) interprets Section 151A and the Scheme to exclude concurrent jurisdiction between the JAO and FAO for issuance of notices under Section 148, holding that the Scheme's automated allocation is mandatory. Where the revenue acts contrary to the Scheme and issues a notice under Section 148 through the JAO instead of following the faceless procedure, that act constitutes non-compliance with Section 151A and the notified Scheme. Such procedural non-compliance, being contrary to the statutory scheme and subordinate legislation, vitiates the initiation of reassessment proceedings and requires quashing of the impugned action without necessity for separate proof of prejudice.

Conclusion: The notice(s) under Section 148 issued by the JAO in breach of Section 151A and the Notification dated 29 March 2022 are invalid; the impugned notices and related order are quashed and set aside and the writ petition is allowed on that ground.

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