Validity of Section 148 notices: issuance by a jurisdictional AO post-29 March 2022 is a jurisdictional defect; DRP must follow jurisdictional precedent.

Addresses validity of reassessment notices issued after 29 March 2022, applying the principle that notices under Section 148 must be issued by a Faceless Assessing Officer and that issuance by a jurisdictional Assessing Officer constitutes a jurisdictional defect where a jurisdictional High Court has so held; concludes the Dispute Resolution Panel (DRP) is bound to follow a binding decision of its jurisdictional High Court and cannot treat such defects as mere procedural irregularities or prefer other High Courts' rulings; operative effect in the document is quashing of specified notices, orders, reassessment and demand arising from those processes.

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Issues: (i) Whether the notice issued under Section 148 (and related proceedings) by the jurisdictional Assessing Officer after 29 March 2022 was invalid as a jurisdictional defect in view of the decision in Hexaware Technologies Ltd., and whether the DRP was bound to follow that jurisdictional High Court precedent.

Analysis: The Court examined the procedural history including prior orders remitting objections to the DRP and the subsequent DRP order which declined to follow the jurisdictional High Court decision in Hexaware Technologies Ltd. The Court analysed Hexaware Technologies Ltd., which held that notices under Section 148 issued after 29 March 2022 must be issued by a Faceless Assessing Officer and that issuance by a jurisdictional Assessing Officer is a jurisdictional defect. The Court further considered the DRP's reasons, including reliance on decisions of the Gujarat High Court and a coordinate Bench decision purportedly deviating from Hexaware, and assessed the binding effect of a decision of the jurisdictional High Court on the DRP.

Analysis: The Court found that the DRP misconstrued the law by treating issuance by the jurisdictional Assessing Officer as merely a procedural irregularity and by relying on out-of-jurisdiction High Court decisions rather than following the binding decision of the jurisdictional High Court. The Court concluded that where a jurisdictional High Court has decided the question, the DRP and authorities are bound to follow that decision and cannot ignore it or prefer decisions of other High Courts on the same issue.

Conclusion: The notice dated 29.03.2023 under Section 148A(b), the order dated 04.05.2023 under Section 148A(d), the notice dated 04.05.2023 under Section 148, the order dated 30.12.2025 under Section 144C(5), the reassessment order dated 23.01.2026 under Section 147 read with Section 144C(13), and the Notice of Demand dated 23.01.2026 under Section 156 are quashed and set aside. The decision is in favour of the assessee.

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