Facts of the Case

The petitioner challenged multiple reassessment notices issued under Section 148 of the Income Tax Act, 1961, along with orders passed under Section 148A(d), all issued by the Jurisdictional Assessing Officer (JAO) after the enforcement of Sections 144B and 151A and the Faceless Reassessment Scheme, 2022 notified on 29.03.2022.

The principal grievance was that despite the statutory mandate requiring reassessment proceedings—including issuance of notice—to be conducted through automated allocation and faceless mechanism, the impugned notices were issued by the local jurisdictional officer, rendering them without jurisdiction.

Issues Involved

Whether, after the introduction of Sections 144B and 151A read with the Faceless Reassessment Scheme, 2022, reassessment notices under Sections 148 and 148A can validly be issued by the Jurisdictional Assessing Officer.

Petitioner’s Arguments

The petitioner contended that Section 151A expressly authorises a scheme covering issuance of notice under Section 148 and that Clause 3(b) of the Faceless Reassessment Scheme mandates issuance of such notice through automated allocation and in a faceless manner.

It was argued that once the scheme is operational, the Jurisdictional Assessing Officer stands denuded of jurisdiction to initiate reassessment. Reliance was placed on decisions of the Bombay High Court in Hexaware Technologies Ltd. and allied judgments of the Telangana, Gauhati, Punjab & Haryana High Courts.

Respondent’s Arguments

The Revenue argued that the Jurisdictional Assessing Officer continues to have concurrent jurisdiction and that Section 144B governs only assessment proceedings and not issuance of notice under Section 148. It was contended that internal administrative mechanisms and risk management strategies justified issuance of notices by the JAO.

Court Order / Findings

The Delhi High Court undertook an exhaustive analysis of the statutory framework, CBDT notifications, legislative intent, and judicial precedents. The Court held that:

  • Section 151A expressly covers issuance of notice under Section 148.
  • Clause 3(b) of the Faceless Reassessment Scheme, 2022 mandatorily requires issuance of notice through automated allocation and in a faceless manner.
  • The expression “to the extent provided under Section 144B” applies only to assessment and reassessment proceedings and does not dilute the requirement of faceless issuance of notice.
  • There is no concept of concurrent jurisdiction between the Jurisdictional Assessing Officer and the Faceless Assessing Officer once the scheme is notified.
  • Internal instructions, office memoranda, or administrative practices cannot override a statutory scheme laid before Parliament.

The Court endorsed the reasoning in Hexaware Technologies Ltd. and allied High Court judgments and rejected the Revenue’s contentions.

Important Clarification

The Court clarified that reassessment proceedings are not barred per se; however, strict compliance with the faceless and automated statutory framework is mandatory. Any reassessment initiated in violation of the scheme is invalid in law, and prejudice is inherent in such illegality.

Final Outcome

The reassessment notices issued under Section 148, along with consequential orders passed under Section 148A(d) by the Jurisdictional Assessing Officer, were quashed. The Revenue was granted liberty to initiate reassessment afresh strictly in accordance with law, following the faceless and automated procedure prescribed under Section 151A and the Faceless Reassessment Scheme, 2022.

link to download the order- https://www.mytaxexpert.co.in/uploads/1770112788_BISHAMBERDAYALCHANDERMOHANACTINGTHROUGHCOMPETENTPARTNERMRCHANDERMOHANAGARWALVsINCOMETAXOFFICERWARD583DELHI.pdf

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