TaxTMI 
TaxTMI 
2026 (8) TMI 441
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....issioner of Income Tax (Appeals)NFAC has failed to appreciate that the notice issued u/s 148 of the Act is barred by limitation and deserves to be quashed 3) The Ld. Commissioner of Income Tax (Appeals), NFAC has failed to appreciate that the notices issued under section 148 and 148A of the Act are without jurisdiction and deserve to be quashed 4) The Ld. Commissioner of Income Tax (Appeals), NFAC and 4 the Assessing officer have erred in making an addition of Rs 1,33,40,906 U/s 69A of the Act as unexplained money 5)The Ld. Commissioner of Income Tax (Appeals), NFAC and 5 the Assessing officer have failed to take cognizance of and appreciate the evidence and explanations offered by the assessee." 2. Also, the assessee has raised the additional grounds of appeal, which reads as under: "6) The Ld. CIT(A) failed to consider that the Reopening of Assessment under section 147 is time barred as per the provisions of section 149. 7) The Ld. CIT(A) ought to have concluded that the initiation of impugned assessment itself is bad in law as the same is against the faceless scheme and thus the notice issued U/s 148 of the Act by the JAO itself is....
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....section 148A(d) of the Act, dated 07/04/2022 and issued the notice under section 148 of the Act, dated 07/04/2022, therefore, the assessment order passed without valid jurisdiction cannot be sustained and is liable to be struck down on the said count itself. 10. Shri Akshay Surana, CA, the Learned Authorised Representative (for short, "Ld. AR") for the assessee, at the threshold of hearing of the appeal, submitted that both the impugned order passed under Section 148A(d) of the Act, dated 07/04/2022 and Notice U/s 148 of the Act, dated 07/04/2022 issued by the Jurisdictional Assessing Officer (JAO), i.e., outside the faceless mechanism as provided under the provisions of Section 144(b) read with Section 151A and the "E-Assessment Scheme of Income Escaping Assessment Scheme, 2022" notified by the Government of India on 29.03.2022 under Section 151A, are bad and illegal. Summing up his contention, the Ld. AR submitted that after the introduction of the "Faceless Jurisdiction of the Income Tax Authorities Scheme, 2022" and the "e-Assessment of Income Escaping Assessment Scheme, 2022", it is only the "Faceless Assessing Officer" (FAO) who can issue the notice under Section 148 of th....
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....mulation of the "e- Assessment of Income Escaping Assessment Scheme, 2022", the notice under Section 148 of the Act can only be issued by the FAO and not by the JAO. For the sake of clarity, the observations of the Hon'ble High Court are culled out as under: 23. In furtherance to the powers conferred under sub-sections 1 and 2 of section 130 of the aforesaid Income-tax Act, the Central Board of Direct Taxes framed a scheme called as the "Faceless jurisdiction of Income Tax Authorities Scheme, 2022." A plain reading of the aforesaid notification would clearly reflect that as has been amended under section 130. The Central Board of Direct Taxes has framed a scheme which defines the Act to be the Income Tax Act and it specifically defines automated allocation which is defined under section 2(1)(b), which again for ready reference is being re-produced herein under: "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,....
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....he Department, firstly, the allocation being made through the automated allocation system in accordance with the risk management strategy formulated by the Board under section 148 of the Act. Secondly, the re-assessment has to be done in a faceless manner to the extent provided under section 144B of the Act. 26. After the introduction of the above two schemes, it becomes mandatory for the Revenue to conduct/initiate proceedings pertaining to reassessment under section 147, 148 & 148A of the Act in a faceless manner. Proceedings under section 147 and section 148 of the Act would now have to be taken as per the procedure legislated by the Parliament in respect of reopening/reassessment i.e., proceedings under section 148A of the Act. 27. In the present case, both the proceedings i.e., the impugned proceedings under section 148A of the Act, as well as the consequential notices under section 148 of the Act were issued by the local jurisdictional officer and not in the prescribed faceless manner. The order under section 148A(d) of the Act and the notices under section 148 of the Act are issued on 29-4-2022, i.e., after the "Faceless Jurisdiction of the Income-tax Autho....
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.... 30. In the instant case, undisputedly the respondent-Department has not proceeded against the petitioner under the substituted provisions of the Finance Act, 2021. Rather, it proceeded with the unamended provisions of law. This in other words takes the position back to the stage as it stood when the initial notices under section 148 under the unamended provisions of law were issued. This in other words also takes us to a position or a stage prior to the large number of writ petitions being allowed across the country, approximately 9,000 in number and confirmed by the Hon'ble Supreme Court also vide the judgement of Ashish Agarwal, supra. 31. It is well settled principle of law that where the power is given to do certain things in certain way, the thing has to be done in that way alone and no any other manner which is otherwise not provided under the law. 32. The Hon'ble Supreme Court in the case of Chandra Kishore Jha v. Mahaveer Prasad [1999] 8 SCC 266 in paragraph No. 17 laying down the aforesaid principle held as under "it is well settled solitary principle that if statute provides for a thing to be done in a particular manner, then it has to be done ....
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.... done in that manner, and if not done in that manner has no existence in the eye of law at all. The Customs Authorities are not absolved from following the law depending upon the acts of a particular assessee. Something that is illegal cannot convert itself into something legal by the act of a third person." 33. If we look into the principle of law laid down by the Hon'ble Supreme Court as enumerated in the preceding paragraphs and when we look into the facts of the present case, it would clearly reflect that the Parliament had by virtue of the Finance Act 2021, brought certain amendments to the provisions of the Income-tax Act, more particularly, in respect of the manner in which the reassessment and the procedure to be adopted by the Income-tax Department. The amendment was brought with an intention to make the law more transparent and effective. The Hon'ble Supreme Court also while deciding the case of Ashish Agarwal, supra, as is discussed with in the preceding paragraph had specifically directed the Union of India to proceed further in terms of the substituted provisions brought in by way of Finance Act 2021. 34. What is also relevant to take note of ....
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.... on the point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings. 38. Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers under Article 142 of the Constitution of India, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra. 39. No order as to costs." 14. We, thus, respectfully follow the judgment of the Hon'ble Jurisdictional High Court in the case of Kankanala Ravindra Reddy Vs. ITO & 2 Others (supra), and on the same terms hold the impugned orders and notices issued by the Jurisdictional Assessing Officer (JAO), i.e., outside the faceless mechanism as provided in Section 144(b) r.w Section 151A and the "E-Assessment Scheme of Income Escaping Assessment Scheme, 2022" notified by the Government of India....