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2024 (7) TMI 1379 - HC - Income TaxValidity of Faceless assessment of income escaping assessment - Challenge to notice u/s 148 as non-compliance with Section 151A of the Act - notices issued by JAO instead of FAO - HELD THAT - Similar issue came up for consideration before a Division Bench of Bombay High Court in Hexaware Technology Ltd.( 2024 (5) TMI 302 - BOMBAY HIGH COURT discussed the issue at length and held that notice under Section 148 after introduction of Finance Act, 2021, cannot be issued by Jurisdictional Assessing Officer. Considering the fact that the impugned notice issued by the JAO was itself defective and without authority of law and the same was contrary to the provisions of Section 151A read with the Scheme dated 29 March, 2022 issued thereunder, the Petitioner having filed an Appeal ought not distract this Court s attention. Consistent with the view taken in Vikram Developers 2024 (5) TMI 1453 - BOMBAY HIGH COURT and since there is no dispute that the JAO had no jurisdiction to issue the impugned notice, the Writ Petition is accordingly allowed and the impugned notice as well as the reassessment order are hereby quashed and set aside. So also, consequential demand notices or penalty notices will also stand quashed and set aside.
Issues:
Challenge to notice under Section 148 of the Income Tax Act - Compliance with Section 151A - Validity of reassessment order Analysis: The Writ Petition challenges a notice dated 30 March, 2023, issued under Section 148 of the Income Tax Act, along with underlying notices under Section 148A(b) and Section 148(A)(d). The reassessment for the Assessment Year 2019-20 led to an impugned reassessment order dated 12 March, 2024. The primary contention is that the notice was issued by the Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO) as mandated by Section 151A of the Act. The Division Bench's judgment in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors. is cited to emphasize that the FAO, not the JAO, has the authority to issue notices under Section 148 of the Act. The Scheme dated 29 March 2022, framed by the CBDT, requires automated allocation for notice issuance, which must be followed without discretion. Any action contrary to law, such as the invalid notice issuance, must be quashed without the need for the petitioner to prove prejudice. The Respondent-Revenue's non-compliance with the Scheme under Section 151A of the Act, as highlighted in Hexaware, renders the notice invalid and vitiates the proceedings. Both parties agree that proceedings initiated under Section 148 are unsustainable due to the judgment in Hexaware and a recent decision in Nainraj Enterprises Pvt. Ltd. The completion of reassessment and subsequent appeal do not negate the defective notice issuance. In line with the rulings in Hexaware and Vikram Developers Private Limited vs. Income Tax Officer, the Court quashes the impugned notice, reassessment order, and any consequential demand or penalty notices. The judgment is based on the non-compliance with Section 151A, and the Court refrains from addressing other issues raised in the petition. The Writ Petition is allowed, and the impugned notice and reassessment order are set aside. Consequential demand and penalty notices are also quashed. The Court clarifies that its decision is solely based on non-compliance with Section 151A, without expressing an opinion on other raised issues.
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