JAO lacks jurisdiction to issue faceless assessment notice under Section 151A(2), entire proceedings quashed following Hexaware precedent

The Bombay HC held that faceless assessment proceedings were invalid where notice was issued by JAO instead of FAO as required under the Central Government Scheme pursuant to Section 151A(2). The court found that revenue failed to comply with the notified Scheme governing proceedings under Sections 148A and 148. Following the Hexaware precedent, the court determined that improper notice issuance vitiated the entire proceedings. Since JAO lacked jurisdiction to issue the notice and the matter was time-barred, the writ petition was allowed and assessment proceedings were quashed.

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Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 due to jurisdictional concerns and non-compliance with faceless assessment provisions. Assessment year 2013-14. Time limitation for reassessment under Section 148.

Analysis:
The petition was filed to challenge a notice issued under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2013-14. The High Court observed that the notice and order were issued by the Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO) as required by Section 151A. The Court referenced the Hexaware case, which emphasized the exclusive jurisdiction of either the JAO or FAO for issuing notices under Section 148, not both concurrently. The faceless mechanism introduced by the Central Government mandates adherence to Section 151A for valid notice issuance.

The Court highlighted that non-compliance with the faceless assessment Scheme, framed under Section 151A, rendered the notice invalid. Both parties agreed that the proceedings initiated under Section 148 were unsustainable based on the Hexaware judgment and a similar decision by the Court in another case. Additionally, the Court referred to the New India Assurance case, which established that reassessment proceedings for the year 2013-14 after March 31, 2021, were time-barred. This limitation period was further analyzed in detail, emphasizing the invalidity of reopening assessments beyond the specified timeframe.

Consequently, the Court allowed the petition, quashing the reopening notice, order, and assessment due to jurisdictional issues and time limitations. The judgment clarified that the decision was based on non-compliance with statutory provisions and did not address other issues raised in the petition. The Rule was made absolute in favor of the petitioner, with no costs awarded.

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