FAO has exclusive jurisdiction to issue Section 148 notices post-Finance Act 2021 amendments, JAO notices invalid

The Bombay HC quashed a Section 148 notice issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO) after the Finance Act 2021 amendments. Following the precedent in Hexaware Technology Ltd., the court held that post-2021, only FAOs have jurisdiction to issue such notices under the faceless assessment scheme notified under Section 151A(2). The revenue's non-compliance with the statutory scheme rendered the notice invalid. Consequently, the writ petition was allowed, and all related notices including demand and penalty notices were quashed.

---

---

Issues involved:
Challenge to notice under Section 148 of the Income Tax Act, 1961 due to jurisdictional Assessing Officer not being a Faceless Assessing Officer as required by Section 151A.

Detailed Analysis:
1. The Writ Petition filed under Article 226 of the Constitution challenged a notice dated 31 March 2024 issued to the Petitioner under Section 148 of the Income Tax Act, 1961, for reassessment of returns filed for the Assessment Year 2017-18. The notice and underlying order were issued by the Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO) as mandated by Section 151A of the Act.

2. The Division Bench in the case of Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax emphasized that the FAO is exclusively authorized to issue notices under Section 148 of the Act in a faceless manner. The Scheme framed by the CBDT, applicable for both assessment and issuance of notice under Section 148, must be followed to avoid chaos and ensure compliance with the law.

3. The Court highlighted that non-compliance with the Scheme notified by the Central Government pursuant to Section 151A (2) of the Act renders the notice invalid. The proceedings initiated without adherence to the Scheme, as established in previous judgments like Siemens Financial Services (P.) Ltd., are unsustainable.

4. Referring to a recent decision in Nainraj Enterprises Pvt. Ltd. Vs. The Deputy Commissioner of Income Tax, the Court allowed the petition, considering the provisions of Section 151A. Consequently, the impugned notice and order were quashed and set aside, along with any consequential demand or penalty notices.

5. The Court clarified that the decision was based on non-compliance with Section 151A and did not address other issues raised in the petition. The Writ Petition was disposed of with no costs, emphasizing the importance of following due process and statutory provisions in income tax proceedings.

This detailed analysis of the judgment highlights the key legal issues, interpretations of relevant provisions, and the Court's decision based on non-compliance with statutory requirements.

---