INCOME TAX OFFICER, KRISHNAGIRI vs. MUNIRATHINAM SIVASANKARI, KRISHNAGIRI

The appeal filed by the Revenue is delayed by 4 days. The AO has filed an affidavit stating therein the reasons for belated filing of the appeal. On perusal of the reasons stated in the condonation petition, we are of the view that there is sufficient cause for late filing of the appeal and no latches can be attributed to the Department. Hence, we condone the delay in filing the appeal and proceed to dispose off the appeal on merits.

The FAA had not decided the issued on merits but quashed the reassessment on legal ground raised namely Jurisdictional Assessing Officer (JAO) does not have the power to issue notice u/s.148 of the Act. The FAA has considered the specific contention of the assessee that the notice u/s. 148 of the Act ought to have been issued by the Faceless Assessing Officer (FAO), instead of the Jurisdictional Assessing Officer (JAO), and consequently the proceedings initiated u/s.148 of the Act were liable to be quashed. The FAA, after considering the decisions of the Hon’ble Jurisdictional High Court in the cases of Mark Studio India Pvt. Ltd. vs. ITO & Others in WA No.781 of 2025 and CMP No.6739 of 2025, dated 24.06.2025, and

However, we note that the Revenue had preferred appeals before the Hon’ble Apex Court against the various decisions of the Hon’ble High Courts referred to (supra), wherein the notices issued under section 148 of the Act by the JAO on or after 29.03.2022 were held to be invalid. In the meantime, the Finance Act, 2026 has introduced a retrospective amendment validating the issuance of such notices by the JAO. The Hon’ble Apex Court, vide its order dated 10.04.2026, has taken note of the aforesaid retrospective amendment and set aside the judgments of the Hon’ble High Courts holding that the JAO could not have issued notices under section 148 of the Act on or after 29.03.2022. It is further noted that the Hon’ble Apex Court has permitted the taxpayers to approach the respective High Courts by way of writ petitions challenging the validity of the retrospective amendments introduced by the Finance Act, 2026. The Hon’ble Apex Court has directed the respective High Courts to decide such petitions filed on or before 31.07.2026 and has also stayed the assessment proceedings in the meanwhile.

In view of the aforesaid subsequent developments, the basis on which the FAA had allowed the legal ground raised by the assessee no longer survives. The decisions of the Hon’ble High Courts relied upon by the FAA having been set aside by the Hon’ble Apex Court, the impugned finding of the FAA cannot be sustained. It is a settled principle that when the very foundation on which an order has been passed is removed, the order founded thereon cannot survive.

Accordingly, we set aside the impugned order of the FAA. We further note that the FAA has not adjudicated the grounds raised by the assessee on merits, as the appeal was allowed on the aforesaid legal issue. Therefore, we deem it appropriate to restore the matter to the file of the FAA. The FAA shall await the outcome of the appeals before the Hon’ble Jurisdictional High Court. After Hon’ble High Court has passed judgment, concerning the validity of the retrospective amendment introduced by the Finance Act, 2026 particularly on the issue as to whether the notice issued by the JAO under section 148 of the Act on or after 29.03.2022 is valid in law or not, the FAA is directed to adjudicate the appeal afresh in accordance with judgment so rendered by the Hon’ble High Court. In the event the assessee does not wish to press the aforesaid legal issue, the FAA

In the result, the appeal of the Revenue is allowed for statistical purposes.