Section 148 Notices After 29.03.2022 Must Be Issued Only by Faceless Assessing Officers, Else Invalid

The ITAT Chennai held that post-29.03.2022, notices under section 148 must be issued only by faceless assessing officers as per the CBDT notification. Any notice issued by jurisdictional assessing officers after this date is invalid. In the present case, the notice under section 148 dated 30.03.2022 issued by the jurisdictional assessing officer was declared invalid, rendering the subsequent assessment order under section 147 void ab initio. The appeal by the assessee was allowed on this ground.

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1. ISSUES:

1.1 Whether, after issuance of the Central Government/CBDT notification dated 29.03.2022 under section 151A of the Act, notices under section 148 must be issued by a "faceless assessing officer" through "automated allocation" and in a "faceless manner", or whether a "jurisdictional assessing officer" may issue such notices.

1.2 Whether an assessment order under section 147 read with section 144 that rests on a section 148 notice issued by a jurisdictional assessing officer after the notification of 29.03.2022 is invalid and "void ab initio".

1.3 Whether a decision following High Court precedent that the section 148 notice issued by a jurisdictional assessing officer is invalid remains operative where there is an extant appeal by Revenue to the Apex Court against that High Court precedent.

2. RULINGS / HOLDINGS:

2.1 On issue 1.1: The court holds that, pursuant to section 151A and the notification dated 29.03.2022, notices under section 148 are to be issued by a "faceless assessing officer" through "automated allocation" and in a "faceless manner", and a notice issued by a "jurisdictional assessing officer" after that notification is not in conformity with the statutory scheme.

2.2 On issue 1.2: The court holds that a section 148 notice issued by a jurisdictional assessing officer post-notification is an "invalid notice" and that any assessment "which is resting on any such notice shall also be invalid and void ab initio"; accordingly the assessment order founded on that notice does not survive.

2.3 On issue 1.3: The court applies existing High Court precedent adopting the view that the faceless scheme precludes concurrent issuance by the jurisdictional officer, but records that its ruling is "subject to the decision of" the Apex Court in the pending appeal against that High Court precedent.

3. RATIONALE:

3.1 Statutory framework applied: Section 151A was read with the e-Assessment Scheme notified by the Central Board of Direct Taxes on 29.03.2022, which prescribes that assessment, reassessment or recomputation under section 147 and "issuance of notice under section 148" shall be through "automated allocation" and in a "faceless manner", and that the scheme is intended to achieve "eliminating the interface between the income-tax authority and the assessee" and "optimising utilisation of the resources" by team-based assessment with "dynamic jurisdiction".

3.2 Precedential reliance and interpretation: The court followed the reasoning of prior High Court decisions which held that the faceless assessment scheme vests authority to issue reassessment notices in the faceless assessing officer and that allowing concurrent jurisdiction to the jurisdictional assessing officer would undermine the scheme; the court treated those High Court decisions as determinative for the legal questions before it.

3.3 Consequential legal principle: The court endorsed the principle that where the statutory foundation for reassessment notice issuance (i.e., the faceless, automated allocation mechanism) is not complied with, the notice is "invalid" and the resulting assessment order is "void ab initio"-in the court's words, "once foundation goes the superstructure is bound to collapse."

3.4 Condition on supervening appellate outcome: The court expressly noted that its application of the High Court precedent is "subject to the decision of" the Apex Court in the pending appeal against those precedents, and left open the parties' rights to seek revival of proceedings if the Apex Court reverses the High Court view.

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