Faceless assessment notices under Section 151A quashed as void for lack of jurisdiction, abuse of power; officers fined

The HC held the faceless assessment notices issued by the JAO invalid for want of jurisdiction and for being contrary to Section 151A and related notification, observing the proceedings were mechanical, contrary to a coordinate Bench ruling and amounted to abuse of power. The court quashed the impugned notices, reprimanded the JAO and the Chief Commissioner for non-application of mind and ignoring binding appellate orders, and directed both officers to each pay personal costs of Rs.25,000.

---

---

Issues Involved:
1. Abuse of powers by the Jurisdictional Assessing Officer (JAO)
2. Issuance of notice under Section 148A of the Income-tax Act, 1961
3. Non-consideration of the Assessment Order dated 20 December, 2019 and the CIT (A) order dated 26 February, 2024
4. Mechanical sanction under Section 151(ii) of the Act
5. Legality of the impugned notices under Section 148A(b) and 148A(d)

Detailed Analysis:

1. Abuse of Powers by the Jurisdictional Assessing Officer (JAO):
The court observed that the JAO exhibited an absolute abuse of powers vested in him by initiating proceedings against the Petitioner under Section 148A of the Income-tax Act, 1961. The JAO either acted with total non-application of mind or irresponsibly by issuing a notice under Section 148 without considering the prior assessment order dated 20 December, 2019, which had already addressed the transaction in question.

2. Issuance of Notice under Section 148A of the Income-tax Act, 1961:
The impugned notice under Section 148A(b) was issued on 8 February, 2024, before the CIT (A) order dated 26 February, 2024. However, by the time the order under Section 148A(d) was passed on 8 March, 2024, the JAO was aware of the outcome of the appeal. The order under Section 148A(d) was silent about the adjudication on the same facts, indicating gross negligence.

3. Non-consideration of the Assessment Order dated 20 December, 2019 and the CIT (A) Order dated 26 February, 2024:
The court noted that the JAO failed to consider the assessment order dated 20 December, 2019, which had already added the amount of Rs. 4 Crores to the Petitioner's income. Furthermore, the CIT (A) had deleted this addition in its order dated 26 February, 2024. The JAO's failure to acknowledge these orders was seen as a dereliction of duty and a deviation from the path of law.

4. Mechanical Sanction under Section 151(ii) of the Act:
The Chief Commissioner of Income-tax granted a mechanical sanction under Section 151(ii) without considering the materials available on record. This sanction was contrary to the provisions of Section 151A and the faceless mechanism under the notification dated 29 March, 2022. The court criticized the Chief Commissioner for acting without application of mind, resulting in prejudice and harassment to the Petitioner.

5. Legality of the Impugned Notices under Section 148A(b) and 148A(d):
The court found that the impugned notices were issued with gross non-application of mind and contrary to the provisions of Section 151A. The JAO's action was seen as an attempt to initiate reassessment proceedings on an issue that had already attained finality. The court referenced the principles laid down in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors. (2024) 464 ITR 430, emphasizing the need for judicial discipline and adherence to appellate orders.

Conclusion:
The court allowed the Petition, declaring the impugned notices under Section 148A(b) and 148A(d) as illegal. The JAO and the Chief Commissioner were directed to deposit personal costs of Rs. 25,000/- each with the "National Association for the Blind" within two weeks. The judgment emphasized the importance of judicial discipline and the need for revenue officers to act in accordance with the law.

---