JAO lacks jurisdiction to issue section 143(2) notice under Faceless Assessment Scheme without prior section 148 notice

The HC held that the JAO lacked jurisdiction to issue notice under section 143(2) for AY 2023-24. Under the Faceless Assessment Scheme, only NFAC has jurisdiction to issue such notices per section 144B(1)(iii). JAO can assume jurisdiction only in special circumstances under sections 144B(7) and (8), specifically where notice under section 148 has already been issued for that assessment year. Since no section 148 notice was issued for AY 2023-24, the JAO's notice was without jurisdiction despite Principal Commissioner's approval.

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Issues:
Jurisdiction of the Assessing Officer under Section 143 (2) of the Income Tax Act for assessment year 2023-24.

Analysis:
The case involved a dispute regarding the jurisdiction of the Assessing Officer (AO) under Section 143 (2) of the Income Tax Act for the assessment year 2023-24. The petitioner argued that the notice issued by the Jurisdictional Assessing Officer (JAO) was without jurisdiction as it should have been issued by the National Faceless Assessment Centre (NFAC) in accordance with Section 144B of the Act. The petitioner contended that the JAO's assumption of jurisdiction was not in line with the Circular dated 03.05.2024, which required a notice under Section 148 of the Act for compulsory scrutiny. The petitioner also relied on a previous judgment by the Court in a similar matter.

On the other hand, the respondent argued that the ITR filed by the petitioner fell within the jurisdiction of the JAO, who had issued the notice under Section 143 (2) of the Act. The respondent contended that the JAO had jurisdiction as per the CBDT Guidelines for compulsory selection of returns for scrutiny. The respondent highlighted that the petitioner had not filed returns in response to a previous notice under Section 148 of the Act for other assessment years.

The Court examined the relevant provisions of the law, specifically Section 144B (1) of the Act, which mandates assessment in a faceless manner through the NFAC. The Court noted that the JAO's jurisdiction to issue a notice under Section 143 (2) arises only if a notice under Section 148 has been issued for that assessment year. Since no notice under Section 148 was issued for the assessment year 2023-24, the JAO did not have jurisdiction to issue the notice under Section 143 (2).

Citing a previous judgment, the Court emphasized that instructions and circulars cannot override statutory provisions and must only supplement them. The Court held that the notices issued by the JAO without conducting faceless assessment were contrary to the provisions of the Act and lacked jurisdiction. Consequently, the Court quashed the notice dated 18.06.2024 and set aside the proceedings initiated by the JAO. The respondents were directed to follow the procedures laid down under the Act for further action.

In conclusion, the Court allowed the writ petition, quashed the notice issued by the JAO, and disposed of all pending applications in the matter.

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