2026 (2) TMI 571 - HC - Income Tax

Faceless assessment notices and orders issued outside the mandated faceless mechanism held invalid; impugned notices quashed.

Issuance of income tax notices and orders outside the faceless procedure prescribed by Section 144B read with Section 151A and the E Income Assessment ... Assessment under Faceless Assessment Scheme - sanction for issue of notice u/s 151 - jurisdiction of Jurisdictional Assessing Officer vis-a -vis Faceless Assessment Officer - HELD THAT:- The Division Bench of the Bombay High Court in the case of Prakash Pandurang Patil [2024 (8) TMI 1625 - BOMBAY HIGH COURT] by following the judgment of Hexaware Technologies Limited [2024 (5) TMI 302 - BOMBAY HIGH COURT] had considered the effect and interpretation of the Section 151 (A) as held there is no dispute that the Jurisdictional Assessing Officer (JAO) had no jurisdiction to issue the impugned order and the impugned notices, the writ petition is required to be allowed. Thus, hold that the impugned notices and orders which have been issued by the Jurisdictional Assessing Officer, or outside the faceless mechanism as provided under the provisions of Section 144 (b) read with Section 151 A and the “E-Assessment Scheme of Income Escaping Assessment Scheme, 2022” notified by the Government of India on 29.03.2022 under Section 151 A, is bad and illegal. It is made clear that the Jurisdictional Assessing Officer (“JAO”) had no jurisdiction to issue the impugned orders/notices. Assessee appeal allowed. Issues: Whether notices and orders issued by the Jurisdictional Assessing Officer under Sections 148-A(b), 148-A(d) and Section 148 of the Income-tax Act, 1961, without following the faceless mechanism provided under Section 144B read with Section 151A and the E-Income Assessment Scheme, 2022 (Notification S.O.1466(E) dated 29.03.2022), are valid.Analysis: The Court examined the statutory scheme introduced for faceless assessments (Section 144B and Section 151A of the Income-tax Act, 1961) and the E-Income Assessment Scheme, 2022 notified on 29.03.2022. The Scheme provides for automated allocation and a faceless procedure for issuance of notices and for assessment/re-assessment under Sections 147 and 148. Judicial precedents from multiple High Courts and the Supreme Court's order upholding the Bombay High Court decision were considered. Applying that statutory framework and the authorities, the Court found that where the Scheme mandates faceless issuance through automated allocation, issuance of notices by the Jurisdictional Assessing Officer outside that mechanism is contrary to the procedure prescribed and exceeds the officer's jurisdiction; such actions are therefore invalid without the need for the assessee to show separate prejudice.Conclusion: The impugned notices and orders issued by the Jurisdictional Assessing Officer under Sections 148-A(b), 148-A(d) and Section 148 of the Income-tax Act, 1961, being issued outside the faceless mechanism required by Section 144B read with Section 151A and the E-Income Assessment Scheme, 2022 (Notification S.O.1466(E) dated 29.03.2022), are invalid; writ petitions are allowed in favour of the petitioners and those notices/orders are set aside.