VIJAYA JAIN vs. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX

Facts

These consolidated writ petitions involved multiple assessees challenging notices issued under Section 148A and Section 148 of the Income Tax Act, 1961, for assessment years prior to the introduction of the faceless regime. The core issue was whether the Jurisdictional Assessing Officer (JAO) retained jurisdiction to proceed with these notices, particularly after the Supreme Court's decision in Ashish Aggarwal's case, which introduced a deemed fiction of law for notices issued under the new faceless regime. The petitioners argued that the JAO lacked jurisdiction, while the revenue contended that the JAO was the appropriate authority to continue proceedings initiated by them. The Rajasthan High Court considered the implications of the faceless regime and the Supreme Court's pronouncements on the matter.

Held

The High Court held that the Jurisdictional Assessing Officer (JAO) would continue to have jurisdiction to decide notices originally issued by him, even after the introduction of the faceless regime. The Court reasoned that the Supreme Court, in exercising its power under Article 142 of the Constitution in Ashish Aggarwal's case, had provided jurisdiction to the JAO by a deemed fiction of law under the new faceless regime. The Court found that the initial notice was issued by the JAO, which was treated as a notice under Section 148A and Section 148 of the old Act. Therefore, the JAO was the most appropriate authority to assess and re-assess. The Court also stated that the procedure laid down under the new regime would have to be followed by the JAO, and no prejudice would be caused to the petitioners by this course of action. The Court explicitly disagreed with the view taken by the Telangana High Court in Kankanala Ravindra Reddy's case and found the petitioners' contention regarding the non-application of Rajeev Bansal's case to be misconceived. The Court directed the revenue to examine each case individually in light of the Supreme Court's observations in Rajeev Bansal's case, particularly concerning limitation and the threshold of Rs. 50,00,000/- for dropping proceedings. The exercise was to be completed expeditiously, preferably within two months. The Court also noted that recent Supreme Court judgments in Vikram Kapahi, Ashish Acharatlal Varaiya, and Pradeep Himatlal Shah were disposed of in terms of Rajeev Bansal's case. The Court ordered accordingly, disposing of all petitions.

Key Issues

1. Whether the Jurisdictional Assessing Officer (JAO) has the jurisdiction to proceed with notices issued under Section 148A and Section 148 of the Income Tax Act, 1961, in cases where the initial notices were issued by the JAO prior to the implementation of the faceless regime, despite the subsequent introduction of the faceless assessment regime? (Question of law and fact, concerning Sections 148A and 148 of the Income Tax Act, 1961). Assessee's Contention: The petitioners argued that the JAO lacked jurisdiction to proceed with the notices, as the faceless regime, with its specific procedures and allocation of functions, had come into force. They relied on the Telangana High Court's decision in Kankanala Ravindra Reddy's case and their own prior judgment in Jasjit Singh's case. They also contended that the judgment in Rajeev Bansal's case was not applicable. Revenue's Contention: The revenue submitted that in each case, the facts would need to be examined individually. They implicitly argued for the JAO's continued jurisdiction, especially since the initial notices were issued by them.