Reopening notice issued by Jurisdictional Assessing Officer (JAO) instead of Faceless Assessing Officer (FAO) was to be quashed.

The Jurisdicational Assessing Officer issued reopening notice dated 24.03.2024 to the assessee. Thereafter, assessment order was passed on 17.03.2025 under section 147. In writ, the assessee had challenged the order on ground that notice had been issued by Jurisdictional Assessing Officer (JAO) and not Faceless Assessing Officer (FAO), thus, same would be invalid.

Held : The Gujarat High Court case in Talati and Talati LLP v. ACIT (2024) 469 ITR 643 : 167 taxmann.com 371 (Guj.) was different from the facts of present case. In Talati and Talati LLP (supra), Gujarat High Court has held that notification dated 29th March 2022 (prescribing eassessment scheme) does not cover a case where notice under Section 148 is issued by the JAO, the information received by him in the matter of search and seizure under Section 132 of the Act, 1961, or requisitioned under section 132A.

In Abhin Anilkumar Shah v. ITO(International Taxation) [2024] 468 ITR 350 : 166 taxmann.com 679 (Bom.) the Court held that orders dated 31.03.2021 and 06.09.2021 issued by the CBDT only carve out exception in relation to the assessment proceedings. What has been done by order dated 06.09.2021 is to modify the order dated 31.03.2021 to the extent of what is set out in paragraph 3 thereof, namely, that in addition to such exceptions to the applicability of the faceless mechanism to assessment orders in relation to Central Charges and International Tax Charges, an additional exception was added, namely, to the assessment order in cases where pendency could not be created on ITBA because of technical reasons or cases not having a PAN, as the case may be. Thus, the scheme as framed under section 151A and notified under the notification dated 29.03.2022 does not include the applicability, inclusion or even reference to the orders dated 31.03.2021 and 06.09.2021. It was further held that it would be doing violence to the language of the notification/scheme dated 29.03.2022 to read into such notification what has not been expressly provided for and/or something which is kept outside the purview of the said notification, namely, the orders dated 31.03.2021 and 06.09.2021. It would be uncalled for to read into the scheme dated 29.03.2022, something which is not included.

The judgment passed by the Gujarat High Court is not based on the reading of notification dated 29th March 2022 along with orders dated 31st March 2021/6th September 2021 but is based on the simple reading of Explanation 2 to section 148 along with understanding that the pre-requisites for issuing notice under section 148 in search cases cannot be met by the FAO. With due respect, this Court does not agree. In these circumstances, notice dated 24.03.2024 issued under section 148 and assessment order dated 17.03.2025 passed under section 147 are liable to be quashed and set aside.

[In favour of assessee] – Rahul Bagrecha v. DCIT (2025)