JAO lacks jurisdiction to issue Section 148 notices under CBDT Scheme only FAO authorized

Bombay HC quashed a notice issued under Section 148 by JAO for reopening assessment under Section 147. The court held that under the CBDT Scheme dated 29 March 2022, only the Faceless Assessing Officer (FAO) has jurisdiction to issue notices under Section 148, not the JAO. The court ruled there is no concurrent jurisdiction between JAO and FAO for issuing such notices. The impugned notice was set aside as being barred by limitation and contrary to Section 151A provisions, with JAO acting without jurisdiction.

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Issues Involved:
1. Legality of the notice issued under Section 148 of the Income Tax Act, 1961.
2. Validity of the approval granted under Section 151 of the Income Tax Act, 1961.
3. Compliance with the provisions of Section 151A regarding faceless assessments.

Issue-wise Detailed Analysis:

1. Legality of the Notice Issued Under Section 148:

The Petitioner challenged the notice dated 30 June 2021 issued under Section 148 of the Income Tax Act, 1961, for the Assessment Year (AY) 2015-16. The primary contention was that the notice is barred by limitation as per Section 149(1) of the Act, read with the first proviso. The notice was issued on 20 May 2022, after the prescribed period of limitation, which expired on 31 March 2022. The Court referred to the case of Hexaware Technologies Limited, where it was held that for AY 2015-16, the 6th year expired on 31 March 2022, and any notice issued beyond this period is barred by limitation. The Court observed that the term "at that time" in the first proviso to Section 149 refers to the date on which the notice is to be issued by the Assessing Officer. Therefore, the notice issued on 29 July 2022 was clearly beyond the period of limitation.

2. Validity of the Approval Granted Under Section 151:

The Petitioner also sought to quash the approval granted under Section 151 of the Act. The Court did not delve deeply into this issue as the primary contention regarding the limitation period under Section 149 was sufficient to decide the case. However, the approval under Section 151 was implicitly questioned as part of the broader challenge to the validity of the notice under Section 148.

3. Compliance with the Provisions of Section 151A Regarding Faceless Assessments:

The Petitioner argued that the notice issued by the Jurisdictional Assessing Officer (JAO) was not in consonance with the provisions of Section 151A, which mandates faceless assessments. The Court referred to the decision in Hexaware Technologies Limited, which held that there is no concurrent jurisdiction between the JAO and the Faceless Assessing Officer (FAO) for issuing notices under Section 148. The Scheme framed by the CBDT for faceless assessments applies to the issuance of notices under Section 148, and only the FAO can issue such notices. The notice issued by the JAO was thus held to be without jurisdiction and contrary to the provisions of Section 151A.

Conclusion:

The Court allowed the Writ Petition, quashing and setting aside the impugned notice dated 29 July 2022 issued under Section 148 of the Act, as it was barred by limitation and contrary to the provisions of Section 151A. The Rule was made absolute, and no costs were awarded.

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