JAO cannot issue Section 148 notices for income escaping assessment under faceless regime established by Section 151A

The Bombay HC held that Jurisdictional Assessing Officers (JAO) cannot issue notices under Section 148 for income escaping assessment under the faceless assessment regime established by Section 151A of the IT Act. The Court ruled there is no concurrent jurisdiction between JAO and Faceless Assessment Officer (FAO) - when specific jurisdiction is assigned to either authority under the March 29, 2022 scheme, it excludes the other. The Court emphasized that allowing concurrent jurisdiction would create chaos and render faceless proceedings redundant. Any action by authorities contrary to statutory provisions is invalid and causes prejudice to assessees, who are entitled to assessment following prescribed legal procedures. The case was decided in favor of the assessee.

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Issues:
1. Validity of notice issued under Section 148 of the Income Tax Act, 1961.
2. Compliance with the provisions of Section 151A for issuance of notices in a faceless manner.
3. Jurisdiction of the Assessing Officer in issuing the impugned notice.
4. Delay in deciding on the application for condonation of delay in filing of return of income and tax audit report.

Analysis:
1. The Writ Petition was filed to challenge a notice issued under Section 148 of the Income Tax Act, 1961, for reassessment. The notice, along with prior notices and orders, was issued by the Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO) as required by Section 151A of the Act. The Central Government had introduced a faceless mechanism through a Notification, mandating compliance with Section 151A for valid issuance of notices under Section 148. The Court referred to the Division Bench's decision in Hexaware, emphasizing the exclusivity of jurisdiction between JAO and FAO for issuing notices under Section 148, and the mandatory nature of automated allocation under the Scheme dated 29th March 2022.

2. The Court held that the Respondent-Revenue did not comply with the Scheme notified by the Central Government under Section 151A of the Act, rendering the notice invalid. The Scheme, treated as subordinate legislation, governs proceedings under Section 148A and Section 148. Referring to the judgment in Hexaware and another recent decision, the Court found that the proceedings initiated under Section 148 were unsustainable due to non-compliance with Section 151A.

3. The Court acknowledged the delay in deciding on the petitioner's application for condonation of delay in filing the return of income and tax audit report. It noted that the application should have been decided expeditiously. Consequently, the Court considered granting the prayer for condonation of delay, highlighting the importance of timely decision-making by the tax authorities.

4. As the JAO had no jurisdiction to issue the impugned notice, the Court allowed the Writ Petition, quashing the impugned orders and notices. The relief sought by the petitioner was granted, emphasizing the need for compliance with Section 151A for valid issuance of notices under Section 148. The Court clarified that its decision was based on non-compliance with Section 151A and did not address other issues raised in the petition.

5. The Court made the Rule absolute in favor of the petitioner, without imposing any costs, and refrained from addressing other issues raised in the petition as they were deemed unnecessary due to the non-compliance with Section 151A being the primary ground for the decision.

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