JAO cannot issue Section 148 notices when faceless assessment provisions under Section 151A apply

The Bombay HC held that a Jurisdictional Assessing Officer (JAO) cannot issue notices under Section 148 for income escaping assessment when faceless assessment provisions under Section 151A apply. The Court ruled that JAO and Faceless Assessing Officer (FAO) do not have concurrent jurisdiction - when specific jurisdiction is assigned to either JAO or FAO under the March 29, 2022 scheme, it excludes the other. The Court quashed the JAO's notice as invalid, stating that actions contrary to statutory provisions inherently prejudice assessees who are entitled to assessment following prescribed legal procedures. The decision favored the assessee.

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Issues Involved: Validity of notice issued under Section 148 of the Income Tax Act, 1961; Compliance with Section 151A of the Act; Applicability of faceless assessment scheme.

Issue-wise Detailed Analysis:

1. Validity of Notice Issued under Section 148 of the Income Tax Act, 1961:
The petitioner challenged the notice dated 30 March 2024, issued under Section 148 of the Act, and the preceding order under Section 148A(b) and Section 148A(d). The reassessment was initiated for the Assessment Year 2017-18. The court found that the impugned notice and orders were issued by the Jurisdictional Assessing Officer (JAO) instead of the required Faceless Assessing Officer (FAO) as mandated by Section 151A of the Act. The court referenced the Hexaware Technologies Limited case, which clarified that there is no concurrent jurisdiction between JAO and FAO for issuing notices under Section 148. The issuance of notice must be through automated allocation, and any deviation renders the notice invalid.

2. Compliance with Section 151A of the Act:
The court emphasized that Section 151A mandates a faceless mechanism for issuing notices under Section 148. The Central Government's notification dated 29 March 2022, which introduced this faceless mechanism, must be adhered to. The court reiterated that the scheme covers both the issuance of notices and the subsequent assessment or reassessment. The court found that the respondent-Revenue did not comply with this scheme, thus vitiating the proceedings.

3. Applicability of Faceless Assessment Scheme:
The court discussed the applicability of the faceless assessment scheme, referencing multiple cases, including Nainraj Enterprises Pvt. Ltd., Kairos Properties Pvt. Ltd., and Abhin Anilkumar Shah. The court concluded that the scheme applies to all steps under Section 148A and Section 148, including cases pertaining to central charges and international tax charges. The court rejected the revenue's argument that the present case should be excluded from the scheme due to its central charge nature.

Conclusion:
The court allowed the writ petition, quashing the impugned notice and orders due to non-compliance with Section 151A of the Act. The court did not express any opinion on other issues raised in the petition, as it was unnecessary to do so after resolving the primary issue of non-compliance. The rule was made absolute with no costs.

Final Order:
The writ petition is allowed, and the impugned notices and orders are quashed. The court clarified that this decision is based solely on the non-compliance with Section 151A, leaving other issues unaddressed.

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