Reopening notice u/s 148 and order u/s 148A(d) quashed as it was issued by Jurisdictional AO and not by a Faceless AO
In a recent judgment, Hon’ble Bombay High Court has quashed notice u/s 148 and order u/s 148A(d) as they were issued by the Jurisdictional Assessing Officer (“JAO”) and not by a Faceless Assessing Officer (“FAO”), as is required by the provisions of Section 151A of the Act.
ABCAUS Case Law Citation:
ABCAUS 4155 (2024) (07) HC
In the instant case, the assessee had filed a Writ Peition before the Hon’ble High Court challenging the notice issued under Section 148 of the Income Tax Act, 1961 (the Act) and also the underlying prior notice and order under Section 148A(b) and Section 148(A)(d) of the Act.
The Hon’ble High Court observed that from a plain reading of the record, it was apparent that the notice issued under Section 148 of the Act and the underlying order of the same under Section 148A(d) of the Act were issued by the Jurisdictional Assessing Officer (“JAO”) and not by a Faceless Assessing Officer (“FAO”), as is required by the provisions of Section 151A of the Act.
The Hon’ble High Court observed that it is well settled that for a notice to be validly issued for reassessment under Section 148 of the Act, it would need to be compliant with Section 151A, which has been interpreted and analysed in detail by a Division Bench of the High Court.
It was noted that the Division Bench had held that here is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice under Section 148 of the Act or even for passing assessment or reassessment order. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. ITD, being an authority subordinate to the CBDT, cannot argue that the Scheme framed by the CBDT, and which has been laid before both House of Parliament is partly otiose and inapplicable. When an authority acts contrary to law, the said act of the Authority is required to be quashed and set aside as invalid and bad in law and the person seeking to quash such an action is not required to establish prejudice from the said Act.
The Hon’ble High Court further observed that it is apparent that the Revenue was not in compliance with the Scheme notified by the Central Government pursuant to Section 151A(2) of the Act. The Scheme has also been tabled in Parliament and is in the character of subordinate legislation, which governs the conduct of proceedings under Section 148A as well as Section 148 of the Act. In view of the explicit declaration of the law by the Division Bench, the grievance of the Assessee insofar as it relates to an invalid issuance of a notice was sustainable and consequently, the very manner in which the proceedings had been initiated, vitiated the proceedings.
Accordingly, the Hon’ble High Court allowed the Writ Petition and the impugned notice as well as order were quashed and set aside.
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