2025 (1) TMI 702 - HC - Income Tax

Reassessment proceedings under faceless assessment regime: jurisdictional assessing officer may continue proceedings when original notice issued.

Reassessment under the faceless regime requires the same assessing officer who issued the original Section 148 notice to examine replies treated as ... Reassessment proceedings in old v/s new regime - Notices issued by JAO and the orders of assessment passed under the old regime, instead of the National Faceless Assessment Center - Whether the proceedings could have been initiated and continued by the jurisdictional assessing officer and the assessment order could have been passed by him in cases where the original notices issued by the jurisdictional assessing officer were treated to have been issued in terms of the new regime? - HELD THAT:- The entire scheme of the Act specifically requires the same assessing officer, who issues notices to conduct an enquiry and considered their reply in terms of Section 148A. Thereafter, the same assessing officer is required to pass an order under the new scheme after giving notice under Section 148 of the old Act. In our considered opinion, if we examine the provisions of present situation, which has arisen on account of treating the notices issued under Section 148 of the Act as notice u/s 148A (b) of the Act, the natural corollary would be that such replies which may be received to the notice issued u/s 148A (b) of the Act, would be examined by the same assessing officer, who had originally issued the notices under the old regime. His jurisdiction cannot be said to have been taken away for examining the reply to notice u/s 148A (b) of the Act. Therefore, as a result the same assessing officer i.e. JAO would be also entitled to take a decision on such reply and pass orders of assessment or reassessment in terms of the new provisions of Section 148 of the Act. As we find that the power u/s 144B (7) and (8) has not been exercised by the Principal Chief Commissioner to the Jurisdictional Assessing Officer, however, the circumstances have been considered by the Supreme Court while exercising its power under Article 142 of the Constitution of India in Ashish Aggarwal’s case [2022 (5) TMI 240 - SUPREME COURT] whereby it has specifically provided the jurisdiction to the Jurisdictional Assessing Officer by deemed fiction of law under the new Faceless Regime. We say so because the initial notice was issued by the Jurisdictional Assessing Officer, which has been treated to be a notice u/s 148A of the Act and Section 148 of the old Act, as notices u/s 148A(a) and (b) of the Act. He would, therefore, be the best person to assess and re-assess the provisions of law are required to be otherwise considered strictly. However, in cases where there is an allegation of escape of income, on account of which notices were issued by the Jurisdictional Assessing Officer, must reach to its logical conclusion by the same officer. We, therefore, hold that the Jurisdictional Assessing Officer would continue to proceed and have jurisdiction to decide the notices which were originally issued by him. In the opinion of this Court, the procedure which has been laid down under the new regime will of course have to be followed by the Jurisdictional Assessing Officer. No prejudice would be caused if such a course is adopted by the Jurisdictional Assessing Officer. The submission of the petitioners is, therefore, found to be without force. We do not agree with the view taken by the Telangana High Court in Kankanala Ravindra Reddy’s case [2023 (9) TMI 951 - TELANGANA HIGH COURT] The contention of petitioners relating to non-application of the judgment passed in Rajeev Bansal’s case [2024 (10) TMI 264 - SUPREME COURT (LB)] is also found to be wholly misconceived. Jasjit Singh’s case facts [2024 (8) TMI 228 - PUNJAB AND HARYANA HIGH COURT] were different. The case deals with the notices which have been issued by the Jurisdictional Assessing Officer after the faceless regime had come into force with effect from 29.03.2022. The view taken in Hexaware Technologies Limited’s case [2024 (5) TMI 302 - BOMBAY HIGH COURT] also does not apply to the present bunch of cases. It is made clear that the petitioners relating to the orders passed by the Assessing Officer on merits can be raised in appeal before the appellate authority. If appeals are so filed, the same shall be decided on merits and the delay shall be condoned on account of the fact that the writ petitions are pending before this Court. All the writ petitions are dismissed. 1. ISSUES PRESENTED and CONSIDEREDThe core legal question addressed in this judgment is whether the jurisdictional assessing officer could initiate and continue proceedings and pass assessment orders in cases where original notices issued by the jurisdictional assessing officer were treated as issued under the new regime by the Supreme Court in the case of Union of India vs. Ashish Aggarwal and considered within limitation as per the Supreme Court's judgment in Union of India vs. Rajeev Bansal.2. ISSUE-WISE DETAILED ANALYSISIssue: Legality of proceedings initiated by jurisdictional assessing officers under the old regime post-amendment.Relevant Legal Framework and Precedents:The judgment discusses the amendments introduced by the Finance Act, 2021, which brought in the faceless assessment and reassessment procedures under Section 144B of the Income Tax Act, 1961. The Supreme Court's decisions in Ashish Aggarwal and Rajeev Bansal are pivotal, as they address the transition from the old to the new regime and the applicability of the new provisions to notices issued after April 1, 2021.Court's Interpretation and Reasoning:The court interpreted that the jurisdictional assessing officer retains the authority to process notices originally issued under the old regime, which are deemed to be issued under the new Section 148A(b) by the Supreme Court. The court reasoned that the same officer who issued the original notices should be allowed to complete the assessment or reassessment process, as the Supreme Court's directions in Ashish Aggarwal's case did not explicitly remove this jurisdiction.Key Evidence and Findings:The court found that the procedural part of the new regime was intended to be followed by the jurisdictional assessing officer, who had originally issued the notices under the old regime. The court emphasized the need for continuity in the assessment process to ensure that the proceedings reach a logical conclusion.Application of Law to Facts:The court applied the provisions of Sections 148 and 148A of the Income Tax Act, as amended, to the facts of the case. It concluded that the jurisdictional assessing officer has the authority to proceed with the assessment or reassessment based on the notices deemed to be issued under the new regime.Treatment of Competing Arguments:The court addressed the petitioners' arguments that the jurisdictional assessing officer lacked authority under the new faceless regime. It refuted these arguments by stating that the Supreme Court's directions allowed the jurisdictional assessing officer to continue the proceedings, as the initial notices were deemed valid under the new provisions.Conclusions:The court concluded that the jurisdictional assessing officer is empowered to continue with the assessment or reassessment proceedings under the new regime for notices originally issued under the old regime. The court dismissed the writ petitions challenging this authority.3. SIGNIFICANT HOLDINGSPreserve Verbatim Quotes of Crucial Legal Reasoning:'We, therefore, hold that the Jurisdictional Assessing Officer would continue to proceed and have jurisdiction to decide the notices which were originally issued by him.'Core Principles Established:The jurisdictional assessing officer retains authority to process notices deemed issued under the new regime by the Supreme Court.The procedural requirements of the new regime must be followed by the jurisdictional assessing officer.The continuity of the assessment process is essential to reach a logical conclusion.Final Determinations on Each Issue:The jurisdictional assessing officer is authorized to continue proceedings and pass assessment orders for notices deemed issued under the new regime.The writ petitions challenging this authority are dismissed.The petitioners are free to raise objections related to the orders passed by the jurisdictional assessing officer in appeals, and the time limitation for such appeals is extended due to the pendency of the writ petitions.