Faceless reassessment procedure must be followed; notice and consequential proceedings were set aside for want of jurisdiction.

A notice under Section 148 and the consequential reassessment proceedings were held unsustainable because the mandatory faceless assessment procedure under Section 144B was not followed. The Court reiterated that circulars and instructions cannot override statutory requirements and may operate only in aid of the Act. It found that the authorities could not bypass the scheme under Sections 119 and 120 read with Section 144B(7) and 144B(8), and that initiation of proceedings without compliance with the prescribed faceless mechanism was contrary to the Income-tax Act. The notice and all subsequent proceedings were therefore set aside for want of jurisdiction.

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Issues: Whether notice issued under Section 148 of the Income-tax Act, 1961 and the consequential proceedings were sustainable when the faceless assessment procedure under Section 144B of the Income-tax Act, 1961 was not followed.

Analysis: The Court followed its earlier view that circulars or instructions cannot override statutory provisions and can operate only in aid of the statute. It held that the authorities could not bypass the mandatory scheme under Sections 119 and 120 of the Income-tax Act, 1961 read with Section 144B(7) and Section 144B(8) of the Income-tax Act, 1961. Since the notice under Section 148 of the Income-tax Act, 1961 and the proceedings initiated thereafter were taken without adhering to the prescribed faceless assessment mechanism, they were contrary to the Act.

Conclusion: The notice under Section 148 of the Income-tax Act, 1961 and all consequential proceedings were set aside for want of jurisdiction, and the writ petition was allowed.

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