Reassessment notice u/s148 issued by jurisdictional AO despite s.151A faceless mandate struck down; proceedings set aside

The dominant issue was whether a reassessment notice under s.148 could be validly issued by a jurisdictional AO after insertion of s.151A and the consequent notification mandating issuance only through the faceless authority. Relying on its co-ordinate Bench decision, the HC held that issuance by the AO lacked jurisdiction because s.151A read with the notification displaced the AO's authority to issue such notice. Consequently, the impugned s.148 notice and consequential reassessment proceedings/orders were set aside, and the appellate proceedings were directed to be closed with liberty to either side to seek revival/restoration if circumstances warranted.

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1. ISSUES PRESENTED AND CONSIDERED

1) Whether the notices and orders initiating and continuing reassessment proceedings under Sections 148A(b), 148A(d) and 148, and the consequential reassessment order, were liable to be quashed on the ground of lack of jurisdiction of the jurisdictional Assessing Officer, in light of Section 151A and the faceless scheme as applied by a binding co-ordinate Bench decision.

2) Whether, upon quashing the reassessment initiation and consequential orders on the jurisdictional ground, the pending statutory appeal for the relevant assessment year should be directed to be treated as academic/infructuous, while preserving liberty to seek revival/restoration if circumstances so require (including depending on the outcome of pending proceedings before the Apex Court).

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Jurisdictional validity of reassessment initiation and consequential reassessment orders

Legal framework (as addressed by the Court): The Court proceeded on the basis that reassessment initiation under Sections 148A and 148 must comply with Section 151A and the scheme/notification providing for issuance of such notices through the faceless authority, and that action by an officer lacking such jurisdiction is invalid.

Interpretation and reasoning: The Court held that a co-ordinate Bench had already quashed similar show-cause notices and all further proceedings on the specific ground that the jurisdictional Assessing Officer issued notices outside the scope of Section 151A, when the governing scheme required issuance through the faceless authority. The Court found that the ratio of that co-ordinate Bench decision was applicable to the present facts, and therefore the same result had to follow here. On that footing, once the initiation was found to be without jurisdiction, the consequential proceedings and orders could not survive.

Conclusions: The impugned notices under Section 148A(b), the order under Section 148A(d), the notice under Section 148, and the consequential reassessment order and related computation/demand were quashed.

Issue 2: Effect on the pending statutory appeal and directions regarding closure as infructuous, with liberty to revive

Legal framework (as addressed by the Court): The Court addressed the practical consequence of quashing the reassessment foundation on jurisdictional grounds and the continuing pendency of the related statutory appeal.

Interpretation and reasoning: Since the reassessment notices and consequential orders forming the subject-matter of the dispute were quashed, the Court treated the related appeal proceedings as having become academic/infructuous. At the same time, the Court preserved liberty to both sides to seek revival/restoration if the occasion arises, particularly in view of pending matters before the Apex Court and the reserved liberty for the Revenue to seek revival of the writ petition after such disposal.

Conclusions: The appellate authority was directed to dispose of the appeal(s) for the relevant assessment year as academic/infructuous, while expressly reserving liberty to both sides to seek revival/restoration. The Court also reserved liberty to the Revenue to seek revival of the writ petition after the Apex Court's decision, and kept all rival contentions open upon any such revival (including contentions concerning the validity of related search, seizure, and inspection proceedings).

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