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2024 (10) TMI 1093 - HC - Income TaxFaceless assessment of income escaping assessment - notice issued under Section 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 u/s 148. As there is no dispute that the JAO had no jurisdiction to issue the impugned notice, the Writ Petition is accordingly allowed.
Issues Involved:
Challenge to notice under Section 148 of the Income Tax Act, 1961 due to jurisdictional concerns. Detailed Analysis: Issue 1: Validity of Notice under Section 148 The writ petition challenges a notice dated 31 March, 2024, issued to the petitioner under Section 148 of the Income Tax Act, 1961, for reassessment in relation to the Assessment Year 2017-18. The petitioner argues that the notice was issued by a Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO) as required by Section 151A of the Act. The Court notes that a faceless mechanism was introduced by the Central Government through a notification dated 29 March 2022. The Division Bench in the case of Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors. has clarified that the FAO is exclusively authorized to issue notices under Section 148, and there is no concurrent jurisdiction between the JAO and FAO in this regard. Issue 2: Compliance with Scheme under Section 151A The Court emphasizes that the respondent-revenue failed to comply with the Scheme framed by the CBDT under Section 151A (2) of the Act, which governs proceedings under Section 148A and Section 148. The Scheme, being subordinate legislation, mandates a faceless issuance of notices under Section 148. The Court, relying on the precedent set by the Hexaware case, finds the grievance of the petitioner valid due to the non-compliance with the Scheme, which renders the proceedings initiated against the petitioner unsustainable. Issue 3: Legal Consequences and Relief Both parties agree that the proceedings initiated under Section 148 are not sustainable in light of the Hexaware judgment. The Court, referencing a similar case, Nainraj Enterprises Pvt. Ltd. Vs. The Deputy Commissioner of Income Tax, agrees that the present petition should be allowed. Consequently, the Court quashes the impugned notice dated 31 March 2024, as the JAO lacked jurisdiction to issue it. The Court clarifies that its decision is based on non-compliance with Section 151A and refrains from addressing other issues raised in the petition. In conclusion, the Court allows the writ petition, setting aside the notice under Section 148 due to jurisdictional non-compliance. The judgment emphasizes the importance of adhering to the faceless mechanism introduced by the Central Government and upholding the legal procedures prescribed by law in income tax assessments.
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