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2024 (7) TMI 1498 - 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 u/s 148 after introduction of Finance Act, 2021, cannot be issued by Jurisdictional AO. Revenue is not in compliance with the Scheme notified by the Central Government pursuant to Section 151A (2) of the Act. The Scheme has also been tabled in Parliament and is in the character of subordinate legislation, which governs the conduct of proceedings under Section 148A as well as Section 148 of the Act Thus, as 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 order are hereby quashed and set aside. So also consequential demand notices or penalty notices will also stand quashed and set aside.
Issues involved:
Challenge to notice under Section 148 of the Income Tax Act, 1961 due to jurisdictional Assessing Officer not being a Faceless Assessing Officer as required by Section 151A. Detailed Analysis: 1. The Writ Petition filed under Article 226 of the Constitution challenged a notice dated 31 March 2024 issued to the Petitioner under Section 148 of the Income Tax Act, 1961, for reassessment of returns filed for the Assessment Year 2017-18. The notice and underlying order were issued by the Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO) as mandated by Section 151A of the Act. 2. The Division Bench in the case of Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax emphasized that the FAO is exclusively authorized to issue notices under Section 148 of the Act in a faceless manner. The Scheme framed by the CBDT, applicable for both assessment and issuance of notice under Section 148, must be followed to avoid chaos and ensure compliance with the law. 3. The Court highlighted that non-compliance with the Scheme notified by the Central Government pursuant to Section 151A (2) of the Act renders the notice invalid. The proceedings initiated without adherence to the Scheme, as established in previous judgments like Siemens Financial Services (P.) Ltd., are unsustainable. 4. Referring to a recent decision in Nainraj Enterprises Pvt. Ltd. Vs. The Deputy Commissioner of Income Tax, the Court allowed the petition, considering the provisions of Section 151A. Consequently, the impugned notice and order were quashed and set aside, along with any consequential demand or penalty notices. 5. The Court clarified that the decision was based on non-compliance with Section 151A and did not address other issues raised in the petition. The Writ Petition was disposed of with no costs, emphasizing the importance of following due process and statutory provisions in income tax proceedings. This detailed analysis of the judgment highlights the key legal issues, interpretations of relevant provisions, and the Court's decision based on non-compliance with statutory requirements.
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