Reassessment notice under Section 148 invalid when issued by wrong assessing officer violating faceless assessment procedures

The Bombay HC held that a reassessment notice under Section 148 issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO) was invalid. Following the precedent in Hexaware Technologies Limited, the court ruled that Section 151A mandates compliance with faceless assessment procedures, creating exclusive jurisdiction for either JAO or FAO as specified in the March 29, 2022 scheme. The court rejected the Revenue's argument for concurrent jurisdiction, stating it would create chaos and render faceless proceedings redundant. The case was decided in favor of the assessee.

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Issues:
Challenge to notice issued under Section 148 of the Income Tax Act, 1961 due to non-compliance with Section 151A of the Act.

Analysis:
The Writ Petition was filed to challenge a notice issued under Section 148 of the Income Tax Act, 1961, along with prior notices under Section 148A(b) and Section 148(A)(d) for reassessment of returns filed for the Assessment Year 2014-15. The main contention was that the notice was issued by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO) as required by Section 151A of the Act.

The Division Bench of the High Court had previously interpreted Section 151A in the case of Hexaware Technologies Limited, emphasizing that the Scheme for automated allocation of cases is mandatory and must be followed. The Scheme, applicable for both assessment and issuance of notices under Section 148, mandates that only the FAO can issue such notices in a faceless manner, excluding the JAO from this process.

The Court reiterated that when an authority acts contrary to the law, the act must be quashed and set aside as invalid, causing prejudice to the assessee. Compliance with the due process of law is essential for all assessments, and any deviation from the prescribed procedure results in prejudice to the assessee, making the action invalid.

In light of the non-compliance with Section 151A and the precedent set by the Hexaware case, the Court allowed the Writ Petition, quashing the impugned notice and order issued by the JAO. Any consequential demand or penalty notices were also set aside. The judgment did not address other issues raised in the petition, as the non-compliance with Section 151A was sufficient to dispose of the case. The Writ Petition was allowed without costs, emphasizing the importance of following the statutory procedures outlined in the Act.

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