INCOME TAX OFFICER, COIMBATORE vs. SARAVANKUMAR PRIYADHARSHINI, COIMBATORE

आदेश / O R D E R

PER MANU KUMAR GIRI, JM:

The captioned appeal filed by the Revenue is directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], dated 11.11.2025 passed u/s.250 of the Income Tax Act, 1961 for the Assessment Year 2018-19. 2. The Assessee raised the following grounds of appeal : 1. Whether on the facts and circumstances of the case, the CIT(A) is justified in quashing the notice issued u/s. 148 of the Act by the Jurisdictional Assessing Officer (JAO), given that the Finance Act, 2021 introduced provisions for faceless assessment and the automated allocation of cases, and does not explicitly prohibit the JAO from issuing such notices?

ITA No 4132/Chny/2025 (AY 2018-19) ITO Coimbatore Vs Saravankumar P :: 2 :: 2. Whether the CIT(A), while quashing the notices issued by the JAO u/s. 148, failed to appreciate that the same are consistent with the legislative intent, when the powers to issue the notice u/s 148 remained intact with the JAO ever after bringing the 'Faceless Assessment Scheme'?

ITA No 4132/Chny/2025 (AY 2018-19) ITO Coimbatore Vs Saravankumar P :: 3 :: 9 Whether the notices issued u/s. 148 of the Income Tax Act, 1961, by the Jurisdictional Assessing Officer (JAO), be considered without jurisdiction by placing reliance upon C.B.D.T. Notification No 18 of 2022 dated 29.03.2022, which only prescribes issuance of notice by automated allocation (as defined therein) in accordance with the Risk Management Strategy formulated by the Board? 10. Whether the CIT(A) is justified in quashing the notices u/s. 148 as well as the orders passed u/s. 148A(d) of the Income Tax Act, 1961 by holding that after the notification dated 29 03.2022, the Jurisdictional Assessing Officer (JAO) is precluded from Issuing such notices, whereas, this Hon'ble Court in the case of Union of India Vs. Ashish Agarwal [2022] 444 ITR 1 (SC), implicitly recognized the "Assessing Officer" as an authority for reopening cases by directing the "Assessing Officer" to conduct an inquiry and pass orders in relation to the reopening of the cases? 11. Whether the CIT(A) erred in limiting the authority of the Jurisdictional Assessing Officer (JAO) to the extent provided under Sub-Sections (7) and (8) of Section 144B of the Income Tax Act, 1961, when the scheme notified on 29.03.2022 does not restrict the power to issue notices u/s. 148 of the Income Tax Act, 1961 to within the scope of Section 144B of the Income Tax Act, 1961? 12. Whether the CIT(A) failed to appreciate that the faceless assessment scheme, while aiming to enhance transparency and efficiency, does not explicitly limit the jurisdiction of the Jurisdictional Assessing Officer (JAO) from issuing notices u/s. 148, thereby preserving the statutory authority vested in the Assessing Officers? 13. Whether the CIT(A) erred in interpreting the faceless assessment scheme in isolation without considering the entire legislative intent, which allows for concurrent jurisdiction between the Jurisdictional Assessing Officer (JAO) and the Faceless Assessing Officer (FAO) / National Faceless Assessment Centre (NFAC)?. 3. The brief facts of the case are that the assessee, an individual, did not file the return of income for the assessment year 2018-19 on the belief that her income was below the taxable limit. Based on information relating to cash deposits of Rs.77,99,323/- in ICICI Bank and Rs.15,01,000/- in Indian Overseas Bank, the Jurisdictional Assessing Officer, namely, the Income Tax Officer, Non-Corporate Ward-1(1), Coimbatore, initiated proceedings u/s. 148A of the Act. A notice u/s. 148A(b) dated 22.03.2022 was issued calling upon the assessee to furnish her reply on or before 29.03.2022. Before expiry

ITA No 4132/Chny/2025 (AY 2018-19) ITO Coimbatore Vs Saravankumar P :: 4 :: of the time granted, the Assessing Officer passed an order u/s. 148A(d) dated 29.03.2022 and thereafter issued notice u/s. 148 on 31.03.2022.Since the assessee neither filed the return of income nor responded to the statutory notices, reassessment was completed u/s. 144 read with section 147 of the Act vide order dated 16.03.2023, wherein an amount of ₹2,73,93,534/- was treated as unexplained money u/s. 69 of the Act. 4. Aggrieved by the reassessment order, the assessee preferred an appeal before the ld. CIT(A). The ld. CIT(A), vide the impugned order, quashed the reassessment proceedings holding that the notice issued u/s. 148 by the Jurisdictional Assessing Officer was without jurisdiction in view of section 151A read with CBDT Notification No.18/2022 dated 29.03.2022 and Notification S.O.1400(E) dated 28.03.2022, which envisaged automated allocation and faceless issuance of notices u/s. 148A and 148 of the Act. Aggrieved by the aforesaid findings, the Revenue is in appeal before us. 5. The ld. Departmental Representative (DR) vehemently supported the order of the Assessing Officer and submitted that the ld. CIT(A) erred in holding that the Jurisdictional Assessing Officer lacked jurisdiction to issue notices u/s. 148A and 148 of the Act. It was contended that the Finance Act, 2021 introduced the faceless assessment regime and section 151A merely prescribed the manner in which reassessment proceedings are to be carried out through automated allocation. According to the Revenue, neither the Act nor the notifications issued thereunder expressly divest the Jurisdictional Assessing Officer of the statutory authority to initiate reassessment proceedings or issue notices u/s. 148A and 148 of the

ITA No 4132/Chny/2025 (AY 2018-19) ITO Coimbatore Vs Saravankumar P :: 5 :: Act.It was further submitted that section 144B governs only the procedure relating to faceless assessment after valid initiation of reassessment proceedings and has no application to issuance of notice u/s. 148. The expression "in a faceless manner" occurring in section 151A and the notifications cannot be interpreted as prohibiting the Jurisdictional Assessing Officer from issuing notices u/s.s 148A and 148.The ld. Departmental Representative further submitted that sections 119 and 120 of the Act continue to confer jurisdiction upon the Jurisdictional Assessing Officer and that the statutory scheme contemplates concurrent jurisdiction between the Jurisdictional Assessing Officer and the Faceless Assessing Officer/NFAC. Reliance was also placed upon the decision of the Hon'ble Supreme Court in Union of India vs. Ashish Agarwal[(2022) 444 ITR 1 (SC)] to contend that the Hon'ble Supreme Court recognized the role of the Assessing Officer in conducting enquiries u/s. 148A and issuing notices u/s. 148. It was, therefore, prayed that the order of the ld. CIT(A) be set aside and the reassessment be restored. 6. The ld.AR for the assessee supported the impugned order. 7. We have heard the rival submissions and perused the material available on record.The controversy involved in the present appeal relates to the validity of notices issued u/s. 148A(b), 148A(d) and 148 of the Act by the Jurisdictional Assessing Officer after introduction of section 151A and the CBDT Notifications dated 28.03.2022 and 29.03.2022.The ld. CIT(A) quashed the reassessment proceedings by following the judicial precedents including the decisions of the Hon'ble Bombay High Court in Hexaware Technologies Ltd. vs. ACIT[(2023) 149 taxmann.com 451], the Hon'ble Telangana High Court in Kings Pride Infra Projects

ITA No 4132/Chny/2025 (AY 2018-19) ITO Coimbatore Vs Saravankumar P :: 6 :: Pvt. Ltd. vs. DCIT[(2024) 157 taxmann.com 134] and the Hon'ble Madras High Court in TVS Credit Services Ltd. vs. DCIT in W.P. No.14255 of 2023 dated 22.04.2025, wherein it was held that issuance of notices u/s.s 148A and 148 by the Jurisdictional Assessing Officer was contrary to the scheme framed u/s. 151A read with CBDT Notification No.18/2022 dated 29.03.2022.However, we find that subsequent developments have taken place after passing of the impugned order. The Finance Act, 2026 has brought amendments having a bearing on the controversy. Further, the Hon'ble Supreme Court, in a batch of matters arising out of Special Leave Petition (Civil) Diary No(s).57403/2025 and connected cases, vide order dated 03.02.2026, has set aside the judgments of the Hon'ble Bombay High Court and the Hon'ble Telangana High Court and remitted the matters to the respective High Courts for fresh consideration.In view of the aforesaid subsequent statutory amendment and judicial developments, we are of the considered opinion that the issue requires fresh examination by the ld. CIT(A). Since the impugned order was passed without the benefit of the subsequent amendment brought by the Finance Act, 2026 as well as the aforesaid order of the Hon'ble Supreme Court, the interests of justice would be met by restoring the matter to the file of the ld. CIT(A) for fresh adjudication in accordance with law.Accordingly, we set aside the impugned order of the ld. CIT(A) and restore the matter to his file for de novo adjudication after considering the effect of the Finance Act, 2026 and the subsequent judicial developments. The ld. CIT(A) shall afford adequate opportunity of being heard to the assessee and thereafter pass a speaking order in accordance with law.

ITA No 4132/Chny/2025 (AY 2018-19) ITO Coimbatore Vs Saravankumar P :: 7 :: We make it clear that we have not expressed any opinion on the merits of the rival contentions and all the grounds urged by the Revenue as well as all the contentions available to the assessee are left open for consideration by the ld. CIT(A). 8. In the result, the appeal filed by the Revenue is allowed for statistical purposes. Order pronounced in the open court on the 15th day of July 2026, in Chennai.

Sd/- Sd/- (प�ावती एस) (मनु कुमार िग$र) (PADMAVATHY S) (MANU KUMAR GIRI) लेखा सद$या/ACCOUNTANT MEMBER %या�यक सद$य/JUDICIAL MEMBER चे%नई/Chennai, SANDEE Digitally signed by 'दनांक/Dated: 15th July, 2026. SANDEEP KUMAR SNDP, Sr. PS P KUMAR Date: 2026.07.16 आदेश क� ��त(ल)प अ*े)षत/Copy to: 13:47:38 +05'30' 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF