Reassessment notice issued outside faceless mechanism u/s151A scheme-s.148 notice invalid, resulting s.147 assessment quashed.

Reassessment proceedings were challenged on the ground that the Jurisdictional AO issued the order under s.148A(d) and notice under s.148 on 31.03.2022 contrary to the faceless reassessment scheme notified on 29.03.2022 under s.151A, which mandated that actions under ss.148A(b), 148A(d) and issuance of s.148 notice be undertaken only through the faceless mechanism. The Tribunal held that issuance of the s.148 notice by the Jurisdictional AO was non-compliant with the statutory mandate and therefore invalid. As the foundational notice was void, the consequential assessment order under s.147 r/w s.144 was also vitiated and quashed, and the appeal was allowed.

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Issues: (i) Whether the delay of 259 days in filing the appeal before the Commissioner of Income Tax (Appeals) should be condoned. (ii) Whether the notice under Section 148 dated 31.03.2022 issued by the Jurisdictional Assessing Officer (JAO), after notification of the faceless e-assessment Scheme dated 29.03.2022 under Section 151A, is invalid and whether the consequent reassessment/assessment order is vitiated.

Issue (i): Whether the delay of 259 days in filing the appeal before the first appellate authority should be condoned.

Analysis: The delay explanations were examined against established principles requiring a liberal construction of "sufficient cause" where delay is not deliberate or mala fide. Binding precedents were applied that condonation should be granted when default is attributable to reasons beyond the appellant's control and no culpable negligence or mala fides is shown.

Conclusion: The delay is condoned in favour of the assessee.

Issue (ii): Whether the notice under Section 148 dated 31.03.2022 issued by the JAO, after issuance of the faceless e-assessment Scheme dated 29.03.2022 under Section 151A, is invalid and whether the consequent reassessment/assessment order is vitiated.

Analysis: The e-assessment Scheme notified on 29.03.2022 pursuant to Section 151A prescribes faceless, automated allocation for issuance of notices under Sections 148/148A and framing of reassessment under Section 147 to the extent provided in Section 144B. The notice and the order under Section 148A(d) dated 31.03.2022 were issued by the JAO and not by the Faceless/NFAC/FAO, contrary to the Scheme. Relevant High Court and Tribunal authorities considering the same statutory scheme and facts were considered; the Supreme Court's dismissal of a related SLP at admission stage was held not to create binding precedent under Article 141. Applying these authorities, non-compliance with the faceless procedure was held to affect jurisdiction and vitiate proceedings founded on the defective notice.

Conclusion: The notice under Section 148 dated 31.03.2022 issued by the JAO is invalid and the reassessment/assessment order passed pursuant thereto is quashed; conclusion is in favour of the assessee.

Final Conclusion: The appeal is allowed on the admitted legal ground that the impugned notice and consequential reassessment are invalid for non-compliance with the faceless e-assessment Scheme; therefore, the reassessment need not be examined on merits and the assessment order stands quashed.

Ratio Decidendi: Where a statutory faceless e-assessment scheme issued under Section 151A mandates faceless issuance and automated allocation for notices under Sections 148/148A and related reassessment under Section 147, a notice issued by the Jurisdictional Assessing Officer instead of the designated faceless authority is invalid and vitiates all consequential assessment proceedings.

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