Faceless reassessment notices must originate from designated faceless authorities; jurisdictional AO's Section 148 notices quashed

Whether reopening under faceless scheme was valid when notices were issued by the Jurisdictional Assessing Officer rather than the designated faceless authorities: held that the faceless procedure and CBDT guidance, as interpreted in precedent, require notices to originate from proper faceless authorities and not the Jurisdictional AO; the assumption of jurisdiction by the Jurisdictional AO was therefore invalid and vitiated the reassessment. Outcome: notices under section 148 quashed and the reassessment proceedings set aside; appeals allowed.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether reassessment notices issued under section 148 by the Jurisdictional Assessing Officer, instead of through the faceless mechanism contemplated under section 151A read with the notified scheme, are without jurisdiction and therefore invalid.

(ii) Whether invalid issuance of the section 148 notices vitiates the entire reassessment proceedings and consequential reassessment orders for the relevant assessment years.

(iii) Whether, upon quashing of the reassessment proceedings themselves, the remaining grounds on merits require adjudication and whether the Revenue's appeals survive.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Validity of section 148 notices issued by the Jurisdictional Assessing Officer under the faceless regime

Legal framework (as discussed by the Tribunal): The Tribunal examined section 151A, the faceless assessment framework referenced in section 144B, and the scheme/notification stated to govern "issuance of notice under section 148" in a faceless manner. The Tribunal treated the jurisdictional requirement as flowing from the statutory faceless regime and the scheme contemplated thereunder.

Interpretation and reasoning: The Tribunal held that under the faceless regime the power to issue notice enabling assumption of reassessment jurisdiction cannot be exercised by the Jurisdictional Assessing Officer where the governing framework mandates faceless issuance. The Tribunal treated the contrary submissions based on departmental communications and the pendency of further challenges as insufficient to displace the binding effect of the jurisdictional High Court's interpretation, and followed the view that departmental memoranda/instructions cannot override the statutory mandate as applied by the jurisdictional High Court.

Conclusion: The Tribunal conclusively held that the impugned notices under section 148 for both assessment years, having been issued by the Jurisdictional Assessing Officer, were bad in law and were therefore quashed.

Issue (ii): Consequence of invalid section 148 notice-whether reassessment proceedings and orders are vitiated

Interpretation and reasoning: The Tribunal reasoned that the section 148 notice is the jurisdictional foundation for reassessment. Once the notice itself is quashed as without authority, the assumption of jurisdiction becomes invalid, which necessarily vitiates the entire reassessment proceedings.

Conclusion: The Tribunal quashed the reassessment proceedings and consequential reassessment orders for both years on the ground of invalid assumption of jurisdiction.

Issue (iii): Effect on remaining grounds and the Revenue's appeals

Interpretation and reasoning: Having quashed the reassessment orders themselves on the jurisdictional ground, the Tribunal held that the other grounds raised on merits did not survive for adjudication. For the same reason, the Revenue's appeals challenging the appellate relief on merits were rendered infructuous because the underlying reassessment orders no longer existed.

Conclusion: The Tribunal declined to adjudicate the remaining grounds of the assessee as unnecessary, and dismissed the Revenue's appeals as infructuous.

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