TaxTMI 
TaxTMI 
2026 (1) TMI 594
X X X X Extracts X X X X
X X X X Extracts X X X X
.... order dated 29/03/2022 and 27/03/2023 u/s 148A(b) of the Act are bad in law. Therefore submitted that the consequential assessment orders deserves to be set aside. The Ld. Counsel has also relied on the order of the Co-ordinate Bench of the Tribunal in the case of Chirag Kirpal Vs. ACIT in ITA No. 656/Del/2025 dated 30/09/2025 and also the Judgment of Jurisdictional High Court i.e. High Court of Punjab and Haryana in CWP-15745-2-24 in the case of Jatinder Singh Bhangu Vs. Union of India vide Judgment dated 19/07/2024. 3. Per contra Ld. DR submitted that as against the Order of the Tribunal and the Judgment of the Jurisdictional High Court relied by the A.R., the Revenue preferred Appeals. Therefore submitted that the present Appeals requires to be dismissed or kept in abeyance. Further submitted that Assessments have been framed and additions have been made on its merits in order to recover the actual tax due from the Assessee, thus sought for dismissal of the Appeals of the Assessee. 4. We have heard both the parties and perused the material available on record. It is found that the Jurisdictional A.O. issued notice dated 31/03/2022 for Assessment Year 2018-19 and 27/03/202....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an Sahvs Union of India reported in 163 Taxmann.com 478 (Gau HC) and after considering the decision of Hon'ble Calcutta High Court in the case of Triton Overseas Private Ltd vs Union of India reported in 156 Taxmann.com 318(Cal HC) [which has been heavily relied upon by the Learned DR before us], held that notice under section 148 of the Act issued by the Jurisdictional Assessing Officer to be bad in law as it is not in consonance with the provisions of section 151A read with Clause 3(b) of CBDT Notification dated 29-3-2022 and it also defeats the very object of introduction of faceless assessment. Similar observations were made in the subsequent decisions of Hon'ble Punjab & Haryana High Court in the case of Jasjit Singh vs Union of India and others in CWP No. 21509 of 2023 dated 29- 7-2024 and in the case of Vinay Sharma vs ITO in CWP No. 16228 of 2025 (O&M) dated 29-5-2025. 5. Further we find that the Hon'ble Telengana High Court in the case of Sri Venkataramana Reddy vs DCIT reported in 468 ITR 181 (Tel) in Writ Petition Nos. 13353, 16141 and 16877 of 2024 dated 24-7-2024 ( which is a case of assessee in International Taxation) had categorically observed that in respec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ary No. 33956 /2025 dated 16-7-2025 by clearly stating in para 3 as under:- ― 3. Having heard the learned counsel appearing for the petitioners - Revenue and having gone through the materials on record, we find no good reason to interfere with the impugned order passed by the High Court. 7. The Learned DR apart from relying on the decision of Hon'ble Calcutta High Court in the case of Triton Overseas P Ltd vs Union of India reported in 156 Taxmann.com 318 (Cal HC), which had already been considered by the Hon'ble Punjab & Haryana High Court (being the Jurisdictional High Court), also placed reliance on the decision of Hon'ble Delhi High Court in the case of T K S Builders P Ltd vs ITO reported in 469 ITR 657 (Del), wherein it was held that Section 144B of the Act cannot be viewed as exclusive basis for all assessment and reassessment procedures and Jurisdictional Assessing Officer (JAO) cannot be completely deprived of power to assess or reassess merely because section 144B and Faceless Reassessment Scheme 2022 have been introduced. The Learned DR also placed reliance on the decision of Hon'ble Madras High Court in the case of Mark Studio India (P) Ltd vs IT....
X X X X Extracts X X X X
X X X X Extracts X X X X
....formation to the petitioner on the basis of which the proceedings in question have been initiated; and (iii) In the interregnum, further proceedings in pursuance to the notice dated 28.03.2024 (Annexure P-2) issued by Respondent No. 3 may be stayed; and (iv) Issuance of any other appropriate writ, order or direction, which this Hon'ble Court may deem fit and proper in the circumstances of the case. 3. The brief facts of the case which are necessary for the adjudication of the instant petition are that the petitioner is an Income Tax Assessee having PANBRKPB0596E.He is a farmer and owns agriculture land. He for the assessment year 2020-2021 filed his Income Tax Return on 29.09.2020. During the previous year, he had received compensation on account of acquisition of his land. He received a notice dated 28.03.2024 under Section 148 of Income Tax Act (for short '1961 Act') from respondent No. 3-Income Tax Officer wherein it was mentioned that department has received information of escaping tax. The said officer proposed to re-assess petitioner's returned income and informed that notice has been issued after obtaining prior approval from Princi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....el for both sides and perused the record with their able assistance. 8. The conceded position emerging from the record is that the petitioner has filed his return within stipulated time. JAO has issued notice under Section 148. The said notice has been issued after obtaining prior approval from Principal Commissioner of Income Tax. The respondent has further intimated the petitioner that his assessment would be completed in accordance with procedure prescribed under Section 144B. A detailed procedure of facessless assessment has been prescribed under Section 144B and Section 151A requires for issuance of notice and assessment by Faceless Assessing Officer. 9. A Division Bench of Telangana High Court in KankanalaRavindra Reddy (supra) has held that notice under Section 148 cannot be issued by Jurisdictional Assessing Officer. The relevant extracts of the judgment are reproduced as below:- "6. The preliminary objection raised by the petitioner which is being considered as the foremost issue is "whether the impugned order under section 148A (d) as well as the notice under section 148 of the Act could be issued by the local jurisdictional officer, rather than....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The reason we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically. " 10. A Single Bench of Calcutta High Court in Triton Overseas (P.) Ltd. (supra) relying upon office memorandum dated 20.02.2023 issued by CBDT, dismissed the petition assailing notice issued under Section 148 by JAO. It is apt to notice here that Calcutta High Court without testing contents of office memorandum vis-a-vis mandatory provisions dismissed the petition. The complete order dated 13.09.2023 passed by Calcutta High Court is reproduced as below :- "1. The Court: Heard the learned advocates appearing for the parties. 2. By this writ petition, petitioner has challenged the impugned notice dated 28th April, 2023, under Section 148 of the Income-tax Act, 1961 relating to assessment year 2019-20 on the ground that the same has been issued by the jurisdictional assessing officer and not by National Faceless Assessment Center as required under section 151A of the Income-tax Act, 1961. 3. Mr.Dutt, learned advocate appearing for the respondents....
X X X X Extracts X X X X
X X X X Extracts X X X X
....counsels, the following issues came up for consideration: (1) (2) and (3) xxx xxxxxx (4) Whether the impugned notice dated 27th August 2022 is invalid and bad in law being issued by the J AO as the same was not in accordance with Section 151A of the Act? 36. With respect to the arguments of the Revenue, i.e., the notification dated 29 th March 2022 provides that the Scheme so framed is applicable only 'to the extent' provided in Section 144B of the Act and Section 144B of the Act does not refer to issuance of notice under Section 148 of the Act and hence, the notice cannot be issued by the FAO as per the said Scheme, we express our view as follows: Section 151A of the Act itself contemplates formulation of Scheme for both assessment, reassessment or recomputation under Section 147 as well as for issuance of notice under Section 148 of the Act. Therefore, the Scheme framed by the CBDT, which covers both the aforesaid aspect of the provisions of Section 151A of the Act cannot be said to be applicable only for one aspect, i.e., proceedings post the issue of notice under Section 148 of the Act being assessment, reassessment recomputation unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., shall be issued through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in Section 148 of the Act and in a faceless manner. Therefore, "to the extent provided in Section 144B of the Act" does not go with issuance of notice and is applicable only with reference to assessment or reassessment. The phrase "to the extent provided in Section 144B of the Act" would mean that the restriction provided in Section 144B of the Act, such as keeping the International Tax Jurisdiction or Central Circle Jurisdiction out of the ambit of Section 144B of the Act would also apply under the Scheme. Further the exceptions provided in sub-section (7) and (8) of Section 144B of the Act would also be applicable to the Scheme. 37 When an authority acts contrary to law, the said act of the Authority is required to be quashed and set aside as invalid and bad in law and the person seeking to quash such an action is not required to establish prejudice from the said Act. An act which is done by an authority contrary to the provisions of the statue, itself causes prejudice to assessee. All assessees are entitled to be assessed as per law and by f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ome, he has right to re- assess tax liability of the assessee. Reassessment cannot be made without granting opportunity to the assessee. The opportunity is granted by way of issuing notice followed by personal hearing. Section 147, 148 and 148A contemplate procedure of reassessment. Section 144B prescribes procedure of self assessment. Section 151A provides that assessment of escaped income shall be made faceless. The concept of self assessment has been introduced w.e.f. 01.04.2021. The object of faceless assessment is to eliminate interface between the Income Tax Authority and assessee to the extent feasible. There are further objects as enshrined in Section 151A. Section 148 provides for issuance of notice where income has escaped assessment. For the ready reference, Section 148 and 151A of 1961 Act are reproduced as below:- "148. Issue of notice 'where income has escaped assessment. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiri....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... section 133A, other than under subsection (2A) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee [where] the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or othe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eme, 2022. (2) It shall come into force with effect from the date of its publication in the Official Gazette. Definitions. 2. (1) In this Scheme, unless the context otherwise requires, (a) "Act" means the Income-tax Act, 1961 (43 of 1961); (b) "automated allocation" means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimize the use of resources. (2) Words and expressions used herein and not defined, but defined in the Act, shall have the meaning respectively assigned to them in the Act. Scope of the Scheme. 3. For the purpose of this Scheme,- (a) assessment, reassessment or re-computation under section 147 of the Act, (b) issuance of notice under section 148 of the Act, shall be through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in section 148 of the Act for issuance of notice, and in a faceless manner, to the extent provided in section 144B of the Act with reference to making assessment or reassessment of total income ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....invalidly made which vitiates the entire reassessment proceedings. The reassessment proceedings are hereby quashed. Accordingly, the Ground No. 1 raised by the assessee is hereby allowed. 10. Since the entire reassessment is quashed, the other grounds raised by the assessee challenging the validity of the addition on merits need not be gone into and they are left open. 11. In the result, the appeal of the assessee is allowed." 6. Further the Hon'ble Jurisdictional i.e. High Court of Punjab and Haryana in the case of Jatinder Singh Bhangu (supra), held as under:- "15. From the perusal of Section 151A, it is quite evident that scheme of faceless assessment is applicable from the stage of show cause notice under Section 148 as well as 148A. Clause 3 (b) of notification dated 29.03.2022 issued under Section 151A clearly provides that scheme would be applicable to notice under Section 148. Even otherwise, it is a settled proposition of law that assessment proceedings commence from the stage of issuance of show cause notice. The object of introduction of faceless assessment would be defeated if show cause notice under Section 148 is issued by Jurisdictio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... & Notice No: PAN: A.Y: 31/03/2022 ITBA/AST/S/148 1/2021- AABCT6693E 2018-19 22/1042312502(1) Notice under section 148 of the Income-tax Act.1961 Sir/Madam/ M/s. . I have the following information in your case or in the case of the person in respect of which you are assessable under the Income tax Act. 1961(here in after referred to as "the Act") for Assessment Year 2018-19 . information flagged by the risk management strategy formulated in this regard suggesting that income chargeable to tax has escaped assessment within the meaning of section 147 of the Act. Order under sub-section (d) of section 148A of the Act has been passed in such case vide DIN ITBA/AST/F/148A/2021-22/1041881994(1) dated 29/03/2022 and annexed herewith for reference, 2. I, therefore, propose to assess or reassess such income or recompute the loss or the depreciation allowance or any other, allowance or deduction for the Assessment Year 2018-19 and I, hereby, require you to furnish, within 30 days from service of this notice, a return in the prescribed form of the Assessment Year 2018-19. 3. This notice is being issued after obtaining the prior approval of the PCIT, Roht....