2024 (7) TMI 1192 - HC - Income Tax

Validity 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 - JAO would not have jurisdiction to issue the impugned notices more particularly in view of the clear provisions of Section 151A read with notification dated 29 March, 2022 issued by the Central Government. As fairly conceded on behalf of the revenue, the challenge in the proceedings would stand covered by the decision of this Court in Hexaware Technologies Ltd. ( 2024 (5) TMI 302 - BOMBAY HIGH COURT . The impugned notices would be required to be held to be illegal and invalid as and there is no dispute that the JAO had no jurisdiction to issue the impugned notice. We, accordingly, allow this petition in favour of assessee.

Summary

Issues:
Challenge to notice issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2020-21.

Analysis:
The Writ Petition filed under Article 226 challenges the notice dated 30 March 2024 issued under Section 148 of the Income Tax Act, 1961, along with a prior notice and order under Section 148A (b) and an order under Section 148(A)(d). The impugned notice and order were issued by the Jurisdictional Assessing Officer (JAO) and not under the mandatory faceless mechanism as per Section 151A of the Act. The Court refers to the case of Hexaware Technologies Limited, highlighting that the faceless mechanism is mandatory, and the Scheme framed by the CBDT covers both issuance of notice under Section 148 and assessment/reassessment under Section 147. The Court emphasizes that when an authority acts contrary to law, the action must be quashed, and prejudice need not be proven by the petitioner. It is established that the impugned order and notices are not compliant with the Scheme, rendering them invalid.

The Court concludes that the impugned order and notices were not in compliance with the Scheme implementing Section 151A of the Act. As per the judgment in Hexaware Technologies Limited, the proceedings initiated under Section 148 are unsustainable due to the invalid issuance of the order and notices. Since the Jurisdictional Assessing Officer lacked jurisdiction, the writ petition is allowed, quashing the impugned notices and order. The Court clarifies that the decision is based on non-compliance with Section 151A and does not address other issues raised in the petition, keeping them open for future consideration.

In the final ruling, the Court allows the writ petition in terms of the prayer clause, issuing a Writ of Certiorari to quash the impugned notices and order. The judgment makes it clear that no opinion is expressed on other issues raised in the petition, and the rule is made absolute without any costs.