Challenged notices under s.148 void for s.151A non-compliance and issued by unauthorized JAO under March 29, 2022 notification

HC held impugned notices under s.148 invalid for non-compliance with s.151A and for being issued by a JAO who lacked jurisdiction under the Central Government notification dated 29 Mar 2022. Relying on the court's prior decision in Hexaware, the HC found the notices illegal and void as the JAO could not issue them in place of the Faceless Assessing Officer. The petition was allowed in favour of the assessee.

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Issues:
Challenge to the validity of notice under Section 148 of the Income Tax Act, 1961 based on non-compliance with the provisions of Section 151A and the faceless mechanism.

Analysis:
The Writ Petition under Article 226 of the Constitution of India sought various substantive reliefs, including quashing the impugned initial notices and orders issued under Section 148A and 148 of the Act. The primary contention was that the notices and orders were issued in breach of Section 151A and the faceless mechanism, as argued by the Petitioner's counsel. The case involved a series of notices and orders related to the reassessment of income for the Assessment Year 2016-17, with objections and responses filed by the Petitioner at different stages.

The Respondent-Revenue acknowledged that the notices and orders were issued by the Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO), as required by Section 151A. The Court referred to a Division Bench judgment in the case of Hexaware Technologies Limited, emphasizing the exclusive jurisdiction of either the JAO or FAO for issuing notices under Section 148 of the Act. The Court highlighted the mandatory nature of the faceless mechanism introduced by the Central Government and the Scheme framed under Section 151A.

The Court held that the Respondent-Revenue failed to comply with the Scheme notified by the Central Government, rendering the notice invalid. Citing the judgment in Hexaware and other similar cases, the Court concluded that the proceedings initiated under Section 148 of the Act were not sustainable due to non-compliance with Section 151A. The Court allowed the Writ Petition based on the lack of jurisdiction of the JAO to issue the impugned notice, without expressing opinions on other issues raised in the petition.

In light of the detailed analysis and legal precedents, the Court granted the relief sought by the Petitioner, emphasizing the importance of compliance with statutory provisions and the faceless assessment mechanism. The judgment highlighted the significance of following due process in tax assessments and reiterated that actions contrary to law must be quashed, even without establishing specific prejudice to the assessee. The decision underscored the necessity of adhering to procedural requirements and the role of the FAO in issuing notices under Section 148 of the Act, as mandated by Section 151A and relevant notifications.

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