Section 148 reassessment notices must be issued by Faceless Assessing Officer, not Jurisdictional Officer under Section 151A

The Bombay HC ruled that notices under Section 148 for income escaping assessment must be issued by the Faceless Assessing Officer (FAO) as required under Section 151A, not by the Jurisdictional Assessing Officer (JAO). Following the precedent in Hexaware Technologies Limited, the court held there is no concurrent jurisdiction between JAO and FAO for issuing reassessment notices. When specific jurisdiction is assigned to either officer under the faceless assessment scheme, it excludes the other to prevent chaos and maintain the integrity of faceless proceedings. The case was decided in favor of the assessee.

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Issues:
Challenge to notice issued under Section 148 of the Act without compliance with Section 151A and Scheme dated 29 March, 2022.

Analysis:
The Writ Petition challenges a notice issued under Section 148 of the Act without compliance with Section 151A and the Scheme dated 29 March, 2022. The impugned notice was issued by the Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO) as required by law. The Division Bench in the case of Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors. clarified that there is no concurrent jurisdiction of the JAO and FAO for issuing notices under Section 148. The Scheme mandates automated allocation for issuing notices in a faceless manner, making it mandatory for the FAO to issue such notices. The Respondent-Revenue's non-compliance with the Scheme renders the notice invalid, vitiating the proceedings.

The judgment in Hexaware and a subsequent decision in Nainraj Enterprises Pvt. Ltd. Vs. The Deputy Commissioner of Income Tax supported the invalidity of proceedings initiated without adherence to Section 151A. Despite the completion of reassessment and filing of an appeal, the defective notice issued by the JAO without authority of law led to the quashing of the notice and reassessment order. The Division Bench's ruling in Vikram Developers Private Limited vs. Income Tax Officer affirmed that foundationally-defective notices under Section 148 result in quashing reassessment orders and consequential demand or penalty notices.

In light of the non-compliance with Section 151A and the Scheme, the Writ Petition was allowed, and the impugned notice, reassessment order, demand notices, and penalty notices were quashed and set aside. The Court clarified that this decision was based solely on non-compliance with Section 151A and did not address other issues raised in the petition. The Writ Petition was disposed of without costs, emphasizing the importance of adherence to statutory provisions for a valid notice under Section 148.

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