Section 148 notice set aside as issued by wrong officer, following Hexaware precedent on Faceless Assessment

The Bombay HC set aside a notice issued under Section 148 for reopening assessment under Section 147, following its precedent in Hexaware Technologies Ltd which held that such notices must be issued by Faceless Assessing Officers rather than Jurisdictional Assessing Officers. Despite Revenue's argument that Hexaware was under SC challenge, the HC noted no stay existed and was bound by its own decision. The court dismissed all subsequent proceedings arising from the invalid notice but granted Revenue liberty to revive the petition if SC overturns Hexaware, allowing revival through simple praecipe without separate interim application. The HC clarified that upon revival, the matter would be decided on merits considering other challenges to the Section 148 notice beyond the jurisdictional officer issue.

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The Bombay High Court, in a writ petition challenging a Section 148 Notice under the Income Tax Act, 1961, held that the Notice issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer is a "fatal defect" warranting quashing of the Notice. The Court relied on the Division Bench decision in Hexaware Technologies Ltd. v. Assistant Commissioner of Income-tax [(2024) 162 taxmann.com 225 (Bombay)], which squarely covers this issue. Although the Revenue informed that the Hexaware decision is under challenge before the Supreme Court, with no stay granted, the High Court declined to keep the matter pending and set aside the impugned Notice and all proceedings therefrom. The Court granted liberty to the Revenue to revive the petition if the Supreme Court sets aside the Hexaware decision, allowing revival by a simple Praecipe without a separate interim application. Upon revival, the petition would be decided on its own merits, including other challenges to the Section 148 Notice. The Rule was made absolute, the petition disposed of accordingly, and no costs were awarded.

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