The assessee, a registered association of insurance pensioners, preferred an appeal against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, for Assessment Year 2019-20. The primary legal issue raised by the assessee challenged the validity of the notice issued under section 148 of the Income-tax Act, 1961, dated 31 March 2023.

The notice under section 148 was issued by the Jurisdictional Assessing Officer (JAO), Non-Corporate Ward-9(1), Chennai. Pursuant to the said notice, reassessment proceedings were initiated under section 147, and the assessment order was subsequently passed on 24 February 2024 by the Assessment Unit of the Income-tax Department. The Commissioner (Appeals) upheld the reassessment, against which the assessee approached the Tribunal.

Before the Tribunal, the assessee contended that after the notification of the Faceless Reassessment Scheme, 2022, issued by the Central Board of Direct Taxes on 29 March 2022 in exercise of powers under section 151A, issuance of notices under sections 148A and 148 was mandatorily required to be through the faceless mechanism. It was argued that the impugned notice issued by the Jurisdictional Assessing Officer was contrary to the statutory scheme and therefore void ab initio.

The assessee placed reliance on a series of judicial precedents, including the Division Bench judgment of the Hon’ble Madras High Court in Mark Studio India (P.) Ltd. v. ITO, wherein it was held that reassessment notices issued by the Jurisdictional Assessing Officer, instead of through the faceless mechanism, are invalid. Reliance was also placed on the decisions of the Hon’ble Bombay High Court in Hexaware Technologies Ltd. v. ACIT and similar rulings of the Telangana, Punjab & Haryana, and Gauhati High Courts.

The Revenue, on the other hand, contended that the Jurisdictional Assessing Officer and the NFAC had concurrent jurisdiction and that no prejudice was caused to the assessee. Reliance was placed on certain contrary High Court decisions.

After examining the statutory framework, judicial precedents, and the facts of the case, the Tribunal observed that the issue was no longer res integra in view of the binding decision of the Hon’ble jurisdictional Madras High Court (Division Bench) in Mark Studio India (P.) Ltd., which followed the ratio laid down by the Hon’ble Bombay High Court in Hexaware Technologies Ltd.. The Tribunal noted that the Division Bench had expressly held that notices under section 148 issued by the Jurisdictional Assessing Officer, post-notification of the Faceless Scheme, are invalid and contrary to the rule of law.

Applying the said binding precedent, the Tribunal held that the notice dated 31 March 2023 issued under section 148 by the Jurisdictional Assessing Officer was invalid and bad in law. Consequently, the reassessment proceedings initiated pursuant thereto and the assessment order dated 24 February 2024 were held to be void ab initio and null in the eyes of law.

In view of the reassessment being quashed on legal grounds, the Tribunal refrained from adjudicating the issues on merits. The appeal of the assessee was accordingly allowed.

Source Link- https://itat.gov.in/public/files/upload/1767848458-2sfu5D-1-TO.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.