2025 (12) TMI 651 - AT - Income Tax

Reassessment u/s 147 quashed as notice u/s 148 violated mandatory faceless scheme of section 151A

ITAT Chandigarh allowed the assessee's appeal, holding that the reassessment proceedings initiated u/s 147 were void ab initio due to a jurisdictional ... Faceless Reassessment Scheme - notice by JAO v/a FAO - Reopening of assessment u/s 147 - notice u/s 148 in the present case was issued on 30.07.2022 by the Jurisdictional Assessing Officer - HELD THAT:- It is undisputed that on 29.03.2022, the Central Government issued a Notification under section 151A introducing the Faceless Reassessment Scheme, making it mandatory that notices under section 148 shall be issued through automated allocation in a faceless manner. As in Jatinder Singh Bhangu [2024 (7) TMI 1191 - PUNJAB AND HARYANA HIGH COURT] and Jasjit Singh [2024 (8) TMI 228 - PUNJAB AND HARYANA HIGH COURT] has categorically held that where the statute mandates issuance of notice by the Faceless Assessing Officer, any notice issued by the Jurisdictional Assessing Officer is invalid for want of jurisdiction. These decisions have been consistently followed by this Bench. In Vishal Bhardwaj [2025 (12) TMI 583 - ITAT CHANDIGARH] an identical jurisdictional defect was examined and the Tribunal categorically quashed the reassessment proceedings. Likewise, in Sham Chand [2025 (8) TMI 1740 - ITAT CHANDIGARH] the Tribunal held that where the notice under section 148 is issued by the Jurisdictional Assessing Officer post 29.03.2022, the very initiation is void and consequently the reassessment order cannot survive. There is no distinction in facts in the case before us. Notice issued under section 148 by the Jurisdictional Assessing Officer is legally invalid. Appeal of assessee allowed. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether a notice under section 148 of the Income-tax Act, 1961, issued on 30.07.2022 by the Jurisdictional Assessing Officer, is valid in law in view of the Central Government notification dated 29.03.2022 mandating issuance of such notices through automated allocation under the Faceless Reassessment Scheme. 1.2 Consequentially, whether the reassessment order passed under section 147 read with section 144B and the appellate order can stand when the foundational notice under section 148 is held to be without jurisdiction. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of notice under section 148 issued by Jurisdictional Assessing Officer after 29.03.2022 Legal framework 2.1 The Court noted that on 29.03.2022 the Central Government issued a notification under section 151A introducing the Faceless Reassessment Scheme, making it mandatory that notices under section 148 shall be issued through automated allocation in a faceless manner by the Faceless Assessing Officer. 2.2 The Court referred to the binding decisions of the jurisdictional High Court in the cases of Jatinder Singh Bhangu and Jasjit Singh, wherein it was held that once the statute and the scheme mandate issuance of notice by the Faceless Assessing Officer, any notice under section 148 issued by the Jurisdictional Assessing Officer thereafter is invalid for want of jurisdiction. Interpretation and reasoning 2.3 It was undisputed that in the present case the notice under section 148 was issued on 30.07.2022 by the Jurisdictional Assessing Officer and not through the automated faceless mechanism. 2.4 The assessee contended that this defect is jurisdictional and renders the entire reassessment proceedings void ab initio; reliance was placed on earlier decisions of the same Bench in Sham Chand v. ITO, Biripur Primary Agriculture Society v. ITO, and Vishal Bhardwaj v. ITO, where on identical facts the reassessment proceedings had been quashed. 2.5 The Court observed that in those earlier decisions, following the law laid down by the jurisdictional High Court, it had categorically held that notices under section 148 issued by the Jurisdictional Assessing Officer after 29.03.2022 are without authority of law, and the consequent reassessment proceedings are non est. 2.6 The Court found no distinction in the facts of the present case from the cases earlier decided and held that the same legal position squarely applied. Conclusions 2.7 Applying the binding precedents of the jurisdictional High Court and following the coordinate Bench decisions, the Court held that the notice under section 148 dated 30.07.2022 issued by the Jurisdictional Assessing Officer is legally invalid for want of jurisdiction. 2.8 As the foundational notice itself was void, the order passed under section 148A(d), the reassessment order passed under section 147 read with section 144B, and the appellate order of the Commissioner (Appeals) were all held to be vitiated and unsustainable in law. Issue 2: Effect of invalid notice on reassessment and necessity to examine merits Interpretation and reasoning 2.9 The Court observed that once the initiation of reassessment proceedings is found to be void for lack of jurisdiction, the entire subsequent proceedings, including the additions made and sustained on merits, automatically fall. 2.10 In view of the invalidity of the notice under section 148, the Court considered that it was not necessary to adjudicate the other grounds on merits, including the challenge to additions under section 69 and the related factual disputes. Conclusions 2.11 The reassessment order dated 29.05.2023 was quashed and the appellate order dated 03.06.2025 was set aside solely on the ground of lack of jurisdiction arising from the invalid notice under section 148. 2.12 The appeal was allowed, with no adjudication on the substantive additions or other grounds raised, as they were rendered academic in view of the jurisdictional defect.