2024 (10) TMI 1092 - HC - Income Tax

Faceless assessment of income escaping assessment - notice issued u/s 148 is issued by the Jurisdictional Assessing Officer ( JAO ) and not by a Faceless Assessing Officer ( FAO ), as is required by the provisions of Section 151A - HELD THAT - It is now well settled that for a notice to be validly issued for reassessment u/s 148 of the Act, the Respondent-Revenue would need to be compliant with Section 151A, which has been interpreted and analysed in detail by a Division Bench of this Court in the case of Hexaware Technologies Limited 2024 (5) TMI 302 - BOMBAY HIGH COURT wherein held Court held that it was not permissible for the Jurisdictional Assessing Officer to issue a notice u/s 148, as the same would amount to breach of the provisions of section 151A of the IT Act. There is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice u/s 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of Revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an assessee to make submission before the JAO and vice versa, which is clearly not contemplated in the Act. Therefore, there is no question of concurrent jurisdiction of both FAO or the JAO with respect to the issuance of notice under Section 148. As there is no dispute that the JAO had no jurisdiction to issue the impugned notice, the Writ Petition is accordingly allowed.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 for Assessment Year 2017-18. Compliance with Section 151A for issuance of notice under Section 148. Validity of notice issued by Jurisdictional Assessing Officer (JAO) instead of Faceless Assessing Officer (FAO).

Issue 1: Challenge to Notice under Section 148:
The Writ Petition was filed to challenge a notice dated 29 March, 2024, issued under Section 148 of the Income Tax Act, 1961, for the Assessment Year 2017-18. The Petitioner contended that the notice, along with prior notices under Section 148A (b) and Section 148A (d), were issued by the Jurisdictional Assessing Officer (JAO) instead of the required Faceless Assessing Officer (FAO) as per Section 151A of the Act.

Issue 2: Compliance with Section 151A:
The Central Government introduced a faceless mechanism through a Notification dated 29 March 2022, requiring compliance with Section 151A for notices issued under Section 148 of the Act. The Division Bench in the case of Hexaware Technologies Limited vs. Assistant Commissioner of Income Tax & 4 Ors. interpreted Section 151A, emphasizing that only the FAO, not the JAO, can issue notices under Section 148 in a faceless manner as mandated by the Scheme framed by CBDT.

Issue 3: Validity of Notice Issued by JAO:
The Court found that the Revenue did not comply with the Scheme under Section 151A, rendering the notice invalid. Citing precedents like Nainraj Enterprises Pvt. Ltd. and Kairos Properties Pvt. Ltd., the Court held that the JAO lacked jurisdiction to issue the notice. Consequently, the Writ Petition was allowed, quashing the impugned notices issued by the JAO.

Conclusion:
The Court allowed the Writ Petition based on non-compliance with Section 151A, setting aside the impugned notices. The judgment clarified that the decision was solely on the grounds of non-compliance and did not address other issues raised in the petition. The ruling emphasized the importance of adherence to statutory procedures and the jurisdictional requirements set forth in the Act.