M/s. Bartronics India Limited vs. The Deputy Commissioner of Income tax
What did the High Court hold?
The High Court allowed the writ petitions, quashing the impugned notices and orders. The Court held that Section 151A of the Income Tax Act, 1961, which mandates that reassessment proceedings be conducted in a faceless manner, is applicable to all assessment proceedings, including those initiated after search and seizure, and even those assigned to Central Charges. The Court found that the notices issued by the JAO instead of the designated Faceless Assessment Unit (FAU) were in violation of the provisions enacted by the Finance Act, 2021, which came into force w.e.f. 01.04.2021. Therefore, the question of law regarding whether reassessment notices in Central Charges could be issued by the JAO or had to be in a faceless manner was decided in favour of the petitioners, holding that it must be in a faceless manner alone. The operative direction was to quash the impugned orders.
What were the facts?
The petitioners, including Kings Pride Infra Projects Pvt Ltd, Mohammed Aleemuddin, GBR Freight Forwarders Pvt Ltd, and M/s. R D Sales, filed multiple writ petitions before the High Court for the State of Telangana at Hyderabad. These petitions challenged notices issued under Section 148 of the Income Tax Act, 1961, and related orders passed under Section 148A(d). The core of the challenge was that these notices and orders were issued by the Joint Assistant Officer (JAO) instead of the Assessing Officer (AO) or Faceless Assessment Unit (FAU), and that the notices were issued for assessment years 2019-20, 2020-21, 2021-22, and 2022-23. The petitioners argued that this procedural deviation violated the provisions of the Income Tax Act and principles of natural justice. The respondents were the Deputy Commissioners of Income Tax, Principal Commissioners of Income Tax, and the Union of India.
What were the issues?
1. Whether notices issued under Section 148 of the Income Tax Act, 1961, for reassessment proceedings in cases assigned to Central Charges can be issued by the Joint Assistant Officer (JAO) instead of a Faceless Assessment Unit (FAU), thereby violating Section 151A of the Act and principles of natural justice? Assessee's Arguments: - The notices were issued by the JAO, not the designated FAU, which is contrary to the mandate of Section 151A of the Income Tax Act, 1961, as amended by the Finance Act, 2021. - The issuance of notices by an unauthorized officer violates the principles of natural justice and the scheme of faceless assessment introduced to ensure fairness and transparency. - Reliance was placed on the Finance Act, 2021, which mandates faceless assessment proceedings. Revenue's Arguments: - The judgment records no specific arguments from the revenue side regarding the authority of the JAO to issue the notices or the applicability of Section 151A.
Which sections of the Income-tax Act were involved?
Section 148,Section 148A,Section 151A,Section 132,Section 132A,Section 139,Section 117,Section 118,Section 153,Section 151,Section 153A
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
The Court made the foltowing: COMMON ORDER
N'BLE SRI JUSTICE P.SAM OSHY K THE HO THE HON'BLE SRI JUSTIC AND E NARSING RAO NANDIKONDA 26667 28497 26788 of 2024 WRIT PETITIO N Nos.2664s 26654 AND I2437 9s6l t4549 14664 674 12873 of 2025 1 COMMoN ORDIIR: (Pcr the Hotl bl,e Sn .lustice P.Som Kosh)') These are batch of writ petitions involving the same tssue' fhcrclirre. ther are clubbed together and are being dccided by this contmtltt orcler
Ileartl Nlr A. Narasimha Sarma' learned Additionat Solicitor of Inrlia. Ms. Ruttria l)awar. leamed counsel' along with Mr' Durldu Sashank iVIartnlohart. leamed counsel for the petitioner in Writ Petition Nos.26(r45, )6(t51, ?'6667 of 2024; Mr' A'V' Raghtr Rarn' learned counsel tirL the pctitioncr in Writ Petition Nos 28497 and 2(r7U8 ol- 2024. Mr. Mohd. Mukhairuddin, leamed counsel for the petitiorrcr irr Writ I'etition No l2437 ol 2025; Mr' Govinda Rao' leamed counsel Iirr tlr,-' 1'rctitiorrcr in Writ Petition No'9561 of 2025' N4r' K'S S K V' Raghlva Rccldr - leamed counsel' r'epresenting Ms iVlltri lndtrkuru' lcarnccl coutrsel lbl the petitioncr in Writ Petition Nos' 14549' I 4664 and l;l(r74 ol' 2025 and Mr' G'Narendra Chetty' lcamed cottnsel'
Pagc 2 of 24 representing Mr. S.K. Jeelani Basha, leamed counsel for the petitioner Writ Petition No.12873 of 2025. Mr. praveen Kumar, learned tn Senior Standing Counsel lor the Income Tax Department lor the respondents in Writ Petition Nos.26645, 26654, 2666j, 29497, 267gg ol 2024, 12437,9561, t4549, 14664 & 14674 ot 2025; and Ms. J.Sunitha, leamcd Senior Standing Counsel for Income Tax l)epartment fbr rhe rcspondents in Writ petition Nos. 12773 & 12437 o1202 5 3. 1-he primary challenge in all these writ petitions is to the notice undcr Section lzlS of rhe lncome Tax Act, l96l (tbr short .the Act,) issued by the Jurisdictional Assessing Officer (for short .JAO,) in each of thc writ Jrctitions. 'the chailenge is firstly, the JAO not having jurisdiction to issuc the irnpugned notices and the notices ought to have been issued by rhe l.aceless Assessing Officer (for short ,FAO,) and, secondly, thc impLrgned notices being in contravention to the cxplanarion ro Scction t5lA ol'tl-re Act and also in violation ol the e- Assessmcnt .f'Inco,re Escaping Assessment Scheme, 2022 read rvith thc notificarion ol- thc central Board of Direct Taxes (for shorr, rhe '(IBDT') dated 29.03 2022. Page .i of 24
The notices in this batch of writ petitions rvere in relation to cases assigned to "central charges".
The question lbr consideration in this batch of writ petitions is "rvhether- in cases assigned to "central charges" the notice issued under Section 148 of the Ar:t could have been issued by JAO or it ought to have been as per the amendment carried out w.e.f. 01.04.2021 in a taceless manner?" 6. issr-re arising out of all the High Courts is seized by the Hon'ble Supreme Court in a large number of S.L.Ps. prefered by the Income I'ax Department 1 Writ Petition No.25903 of 2022 & Balch, decided oo 1-4.O9.2O)3 "-iL
Iraee .1 of 24
All the lcarncd counsel lor the petitioners primarily relied upon the aloresaid judgment of Kankanala Ravindra Reddy (supra) and which was subsequcntly also made applicable in the case of "intemational chargcs" by thc Division Bench of this High Court in whetlrel the show-causc notices under Section 148 of the Act in rnatters relating to "international charges" would stand exempted or' anr.l Others t . flo*eucr, in all these writ petitions, the counsel rcpresenting the Inconte Tax Department vehemently contended that 2Wrrt Petrtion No 13353 of 2024 & Barch, decided on 24.O-i.2024 t 1zoza1 au trR 430 {Bomi these cases since assigned to "central charges". thcre is slight difference on lacts and law so lar as the applicabilitl' of Kankanala Ravindra Reddy (supra) at the first instittrce, and Sri Venkataramana Reddy Patloola (supra) in the second instance, and they wanted to distinguish and contend that this batch of writ petitions would be an exclusion or an exc'eption so far as thc proceedings to be drawn in a faceless manner is concemed.
Mr'. A. Narasimha Satma. Iearned Additional Solicitor Gcneral ollndia led the arguments on behallof the Incorrc .l ar l)epartment in all these writ petitions.
It was the contention of the learned Additional Solicitor (ieneral that in all the writ petitions br:forc this Couft whclc tlte cases pertain to central charges has arisen fiom the search and scizLrrc procccdings initiated by the Income l-ax Depanment. It was also the contention that the proceedings initiated or arising out of a sertrch and scizure cannot be equated with the normal assessment l)r()ccedings drarvn under the statute. It was also thc contention that a lhcclcss proceeding is to be adopted in casc ol'a normal regular assessmcnt proceeding and not where the proceedings have been drawn subsetluent to search and Page 6 o12,1 scizure. It rvas also contended that unless the notices in these cases are r.rot issucd b,'.' the JAO, the Deparlment would find it extremelv dilllcult in adhering to the requirement of law under Section l53D of' the Act l l. Reading through the provisions of Section l53D ol the Act, the leamcd Additional Solicitor GeneraI contended that in order to ensure compliancc as is required thcrein, it would become necessary lor the proceedings to be initiated althe first instance by the JAO and, it was tn this contcxt, that these notices have been issued and the same tlrerelore cannot be found fault with and the petitioners do not have any clairr and thc writ petitions are liable to be dismissed 12. lt was the funher contention of the leamed Additional Solicitor Ceneral that recently the Cu.iarat High Court in the case of Talati and Talati LLP vs. Assistant Commissioner of Incomc-tax{ held thal noticc under Scction 148 of the Act in a laceless manner as per the schen.rc fiamed by notification dated 28.03.2022 cannor be applied to cases olscarch and scizure under Section 132 of the Act and, in such circunrstances, it would be the JAO who is required to rccord his "120241 167 tar-ann com 371 (Gutarat)
Pagc 7 trf 1-1 satisfaction on the basis of the material collected during thc course of the search.
Leamed Additional Solicitor General also relcrred to a recent decision of the Delhi I{igh Court in the case olT.K'S' Builders (P') Ltd. vs. Income-tax Officer5. wherein reiterating thc r ierv expressed by the Gujarat High Court itr the case ol-Talati and Talati LLP (supra), the Delhi High Coun had disrnissed thc batch ol' writ petltlons.
According to the learned Additionai Solicitor General for evaluation of data, there is a mandatory requirement of JAO and when it is a case arising out of search and sciz-ure. keeping in i'iew the provisions of Section l53D ol-the Act, the salest infi're ncc that can be drawn is that there is a concurrent.iurisdiclion availablc on the JAO as also the FAO and for evaluation of the data also thc services of JAO would be required. It was also contended by the lcarned Additional Solicitor General that the provisions of the t\ct have to be irnplernented keeping in consideration thc harmoniorts constluction s 2024 scc onLine Del 7508
I Page 8 ol24 and tliat the provisions ol the statute has to be applied by giving a benefi cial constructlon.
It was contended by the learned Additional Soticitor General that clause (i) of Sub-section (l) ol Seition l44B of the Act requires that the National Faceless Assessment Centre shall assign the se lected cases for the purpose ol laceless assessment through autotnated allocation system. Ctause (i) of Sub-Section ( I ) of Section l44B olthe Act for ready reference is reproduced hereunder: " (i) ttte Nttt iont l'-rtceless Asscssmenl Centre shall assign the case .telected Jbr lhe purposes offoceless assessmcnl under this seclion lo a specific ($scssnrcnl trnil through utt uutonuted alloctttion sYstem. ''
Lastly, it was contended by the leamed Additional Solicitor General that in cases of "central charges", there is no requilement to conduct proceedings under Sectiotr l48A of the Act and hence the notices issued under Section 148 of the Act in case ol "ccntral charges" cannot be issued on automated allocation system'
Flaving heard the learned counsel for the parlies' panicularly the learned Additional Solicitor General extensively' it would be necessaly at this juncture to take note of the decision rendcred in the Page 9 ol24 case of Kankanala Ravindra Reddy (supra) wherein the Division Bench of this High Court in a batch of rvrit petitions, has held in paragraph Nos.i5 to 38 as under:
"35. ln view of thc aJbrcsaid drsc u.r.s irt tts. il is b)' nttvr verv clear lhal the procedure to be follotted b); lhc respondenl- Department upon treating thp nolices isstted for reo:Jessmenl being under Section I48.,1, the subsequent proceeding.t vas mandalorily required to be underlaken uruler the sub.\tiluted provisions as laid dotutt under the Financc .,ltl. 20)l ln tha absence of which, v,a dre conslroine(l to loltl r hut the procedure adopted by lhe re-sltondent- Deparlmcnl is in controt)ention lo tie slolule te. lhe Finuncc.4c1. 20)1. ut lhe rtr$ inslonce. Secondly, il is olso in direct conlravcntiotl lo lhe directives issued by the Ilon'ble ,Suprcnte ('ourl in thc cose oJ' .4s his h Agarwal, supra.
For all the oforesaid reu.sons, thc impugnttd rutticcs i:;sued and the proceetlings drawn b1i llrc rcsporulenl- Deparlmcnt is neilher lenuble. nor suslainahle Thc rutlicc.s srt issued and thc procedure adoptcd being per sc illcgol. de.serves lo be and are accorclingly set oside/quushctl 37. \-he preliminarlt ohiection rai.sed b.l lhe pelitrttner is suslained and all tha.ve v,rtt pelilio s sttuuls ullowul on lhis very lurtsdictional issue. Since the impugned noticc.r urul orders are getling quoshe.l on lhe poinl of jurisdictittn. we orc not mclned lo proceed .further and decide the olltr issues raised b\, lhe petilioner which staruls rcservecl to he raised and conlended in an appropriate proceeding,s
Page l0 of24
Since the llon'ble Supremc Courr hatl, in fhe case ol Ashish Agarwal (l supra) as o one-line meo-\ure exarci-sing lhc pou,ars under Article 142 of the Constitution of lntlia. pernzilted the Revenue to proceed under the substiluted prot'ision.s, untl this Courl aLlotting lhe. petitions only on the ltrotedural fla+r, the right conferred on tlu Revenuc u,ottltl renain re.seryed lo proceed {urther if they s() reant -from the slage o1'lhe order oJ the Supreme Court in the case of Ashi_;h Agorw (l supra). "
From the aforesaid judgrnenr and the principles ol which have been r-eiterated in a large number of writ petitions subsequenrly filed, it would be evidently clear that the view of this High Court and the ratio laid down was that on and after coming into force of the Finance 4ct,2021 w.e.f.01.04.202 l, and with the introduction of the arne'durent to Section r4g of the Act wherein it was envisaged that the assessments have to be done b,v way of an automated faceless mechanism, all proceedings of assessment drawn subsequently have to be by fbtlowing the same mechanism. Further, the Hon,ble Suprcme C'ourt in the case of IJnion of India and Others vs. Ashish Aga rwa16, in very categorical terms has held as under: "Thus, the ne*- provisions s.ubstitutetl by the Finunce Act, 202l being remedial and benevolent in noltffe ond sub.ttituled with a 2022 SCC OnLine SC 543
sl)cci/ic dim ond object to protect the rights and interest of lhe assessee as v,ell as and the same being in public inttrast, the raspective lligh Courts have rightly held thot the benc/ir ol nev, provi:'ions shall be made avoiluble cven in re:pt'tt of tlrc proceedings relaling lo past uss6smtnt ycdts. I)tot,ided saclion 118 notice has been issued on or afier April l. 2021 We are in complete agreemenl tith tht t,iet' tukt'n h) the various High Courts in holding so Ilowever, al lhe some time, the judgmenls of Ihe seven ltigh Courls would result in no rea.tsessmenl proceedinq.\ Ltt oll even iithc same are perntissihle under the Finance Act. 2021 und us per substiluled sDctions 117 The Revenue cannot be ntade remediless and lhe ohftct und purpose ofreassessmenl proceedings conrutt be.frustrt rd. lt is true thol due to a bona fide mistake and in viey, oj sub-sequcnl exlension of time vide vorious nolifications. the Revenuc issucd the impugned nolices under section lJ8 after thc oncrulnrcnt t,us enlorced with effect from April l. 202 l. undar thc unamencled section 148. ln our viev' theSante ought not to have been issued under the unamended Act und ought to hayc haen issued under lht substiluled provisions ofsections lll n.t l5l of the Income-tat Act as per the Finance Act. 202 I Thert dppeors to be genuine non-applicoliotl ctf the anendntanl.s u: the of/icers of the Revenue mo] how heen under u httnt .fitlt beliaJ'that the amendments moy not yel hove been enfbrctd. 'l he re-fore, v'e are of the opinion that sonte leeu'a! mu.st ba shov,n in lhal regord whic'h the High Courts could hut'e done so Thcreforc, inslead o.,f quashing .tnd sellitlg usida tlt re sses.\menl nolices issue'd under lhe unomended provision.s Page ! I ol'24
['agc l2 of 24 of the Income-tar .,lct as those deemed to hate 6""n 1rrrr", under section laSA of the [ncome-tar Act as per lhe nctt, provi5ion5 ty' section I48A and the Revenue oughl to huve been permitled to proceed .further with the reassessnent proceedings as per the subsliluted provisions of sections 147 to l5l of the lncome-tax Act us per the. Finunce .4cr, 2021. subject to complionce o/ all the procedurol requirements and lhe defences, n'hich may be auailable to lhe assessee untler the .sub.slituted provision.s oJ'sections t 47 to I 5 I of the lncotne_tax Act trnd u,hich ntay be uvailable under lhe l|nance Au. 2021 and in lav,. There.fttre, we propose to modifv the irulgment..s and orders passed by the respective High Courls o., tmder: (, Thc respective impugned section l18 notices issuetl to the respective ,s.re.ssee-r shalt be deemed to have heen issued under section 148,4 of lhe lncone-tar Act us substituted b),the Finance Act, 202t und rrcatctl tLt hc shov,-cause notices in terms of sectiotl 14g,4(U Thc respective Assessing O.fficers shall u,ilhin thirtl, tlays Jrom todoy proyide to the asseessees the infrtrntatiort and malcrial rtlied uptn by the.Revenue so lhat tllc (Ltscessees can reply to the notices wilhin h+,o y)eek, the r eafter; (i, T'he requirement oJ conducting dny (.nquir! ujith th? prior approval of the specified outhority under section 148A9(a) be dispen-red with as a onetime mea.sure vis_tt vis lhose nolices which haye been issuetl untlar .tecliorr 118 of the unumended Acl from April t. (iii) The Assessing Of/icers shall therea.fier pass nn order in lernlt oJ scction 148A(d) ofter .[ollot,ing the duc
Page li ol24 l)toLcdure as requiretl under seclion l48A(b) in respect oJ cach of the concerned ossessees " . '
Following the aforesaid iudgment of the I-lon'ble Suprcme Court in Ashish Agarwal (supra), it has been emphatically held by the Division Bench of this High (lour1 in the case ol Ravindra Reddy (supra) that there is no furlher dispute to be adjudicated so t-al as what is the mechanism which has to be applied for assessment lre- assessnlenl er,eu il it is fbr assessment of previous years if the proceedings have been initiated on or after 01.04.202 l' It has to be only through automated t-aceless mechanism and no other way'
Hence, the question of law as framed in the earlier paragrapl-r of this order is "u,hether in the case oI central charges, could the afbrementioned principles of law be deviated and whether the proceedings drawn uncler the central charges could be b;' the JAO or it too has to be in a taceless uanner?" 20. l-he CBDT in respect of the same had issuecl a notiilcation dated 29.03.2022 in exercise of its powers under Sttb-Section ( l) and (2) of Section I -5 I A of the Act and, framed a scheme' which fbr ready referencc is reploduced hereunder: I
Page )4 ol 24 MINISTRY OF [INANCE (Departmcnt of Revcnuc) (CENTRAL BOARD OF DIRECT ]'A>{ES) NOTIFICATION Neu, Delhi, the 29th March. 2022 l. Short title and commencement:-- ( I ) This Scherrc rna1,. bc called the e-Assessment of Income Escaping Assessment Scheme. ?.02). (2) It shall come into force with effecl from rhe dare ol' its publication in the Official Gazette. S.O. 1466(E):- In exercise of rhe powers conl'erred by sub_ sections (l) and (2) ofsection l5lA of the Income-rax Acr, lg6l (4j ol 196l). the Central Govemment hereby makes rhe fbllowing Scheme, namely:-
Definitions: - (i) In lhis Scheme, unless the conrext otheru.ise requircs. (a) "Act'' means rhe Income-ra.\ Acl, l96l (43 of l96l ); (b) "automated allocation" means an algorithn fbr randomised allocation of cases, by using suitable technological tools, inclucling artificial intelligence and machine learaing, with a vierv ro oprimis; the use of resources. (2) Words and expressiolrs used herein and nor defined. but tleflned in the Act. shall have lhe meaning respectivelv assigued to them in the Act. (b) issuance of notice under section l4g of the Act, shall be through automated allocation, in accordance rvith risk management strategy formulated by the Board as relerred to in section 148 of the Act for issuance of notice, and in a faccless lnanner, to the extent provided in section l44B of the Act r.i,ith reference to making assessment or reassessment of total income or loss of assessee. (Emphasis supplied)
Scope of the Scheme:- For the purpose of this Scheme._ (a) assessment. reassessmeut or recomputation under section 147 of the Act.
Page l5 of 24 2l . Similarly, the CBDT earlier also vide order dated 06.09.2021, in exercrse ol its powers under Section I l9 of the Act introduced certain exceptions / exclusions to Section l44B of the Act. The said order dated 06.09.202 I. lor ready rel'erence is again reproduced hereunder Section l448(2) of the Income 'I'ax Act. 196l I 448. Facclcss Assessment: (l) (2) Thc faceless assessment under sub-section (l) shall be made in respect ot'suclr territorial ar!-a- or persons or class of persons. or incomes ol elass trl'incontes- or cases or class ol cases, as may be specified b1' the Board- csor,. o.a". dared 06.0g.202 (Emphasis Supplicd) t.No. I87ll/2020-ITA-I (lovernment of India Ministry of Finance Department of Revenue (Crntral lloard of Direct Taxes) ***++ North Block, Nerv Delhi Dated, the 6th September,202l. ORDER Subiect:- Order under scction I 19 of the Income-tax Act 196l (the Act) providins exclusions to section l44B ofthe Act. -fhe F'aceless Assessment Scheme, 2019 (the Scheme) has been incorporateci in the Act vide the 'faxation and Other Laws (Relaxation and Amendment ol Certain Provisions) .A.ct. 2020 Section 14{B of the Act pertaining to Iiacclcss Assessmenl has been inserted by the said anrendment w.e.f. 0l .04.2021 . 2. 'fhe Cential Boirrd of I)irect Taxes vide Order F No.I87i3l2020- ITA-I dat,.-d l3th August. 2020 (the Order) rcad with order undcr
Pagc l6 oI24 section Il9 of the ,qct regarding ntutatis mutandis application of Orders, Circulars etc., issued in order to implcment thc Schentc t<r Faceless Assessnrent u/s l44B of thc Act, i .t to. t g7l;l2OZt)-ltn_ t datcd i I sr Mar-ch. 202 I directed thar all thc Asscssment Orrlers shall be passed by the National l'acelss Assessment Centre Q.JaFAC) u/s 1448 of the Act except as under:_ i. Assessment orders in cases assigned to Central Charges. ii. Assessment Orders ir.r cases assiglcd to International I.ax (-hargcs." (Emphasis Supplied)
A plain reading ol rhe aforesaid order dated 06.09.202 I conjointly with the rlotificarion dated 29.03.2022 ,"vould go ro show that the CBD'| has in fact carvcd out two exceptions so lhr as impler.enti,g the scheme of faceress assessment. 'r'hose two exceptions are (i) assessment orders in cases assigned to central charges; and (ii) assessment orders in cases assigned to intemational tar charges. So lar as the assessntent ol.ders in cases assigned to international tax charges, recelrtly the said exception was under challcnge in a batch of writ petitions before this High Courr in the case of Sri Venkataramana Retldy patloola (supra). White deciding thc said batch of writ petitions, the Hon'ble Division Bench hearing the said writ petitions took note of the order dared 06.09.202 l and notiflcation dated 29.03-2022 and in very categoricar rerms herd in paragraph Nos.23, 24,27 and 29 as under:
l'age I7oll'l " 21. lr i.t noteworthv Ih t tlrc order of CBDT dctted 06.09.20: I dtals v'ith as.scssnrcnl orders . The .ruid order i.s pa.tsed in ararcisc ol 1t<ttr t'r undcr Section l44B oJ lhc Act. 'fhe orlr.'r of <)BD7 i.s tlaar that tlirection wus isstu:.l dboul passing o/ ussc.\s1tc,1t ordars b,l, tlrc National Faceless ,4ssa::m?nt ( t'nlrc untltr Saction llJB of lhe Acl erci:pl in nt,o stluetions. ona of vhich ts passing o/.rtssessnrcnl urders rn cascs ussigncd lo lntcrnalional 'fax Charges. 21 l'hus, rherc i'; rut ttn'ir ol doubt that Section l14l) of the Att ttttl ttrder of' ('BDT lated 06.09.2()21 give exemption fittn lollowing tht nouiulor.t .laceles.r procedure o b) in ralation ttt ptrssing ol as.\t?.\smenl orders in coses of cenlral churges and in'lcrnational lur charges Ar) other inlerlyL'lution woultl umounl lo doing violcnce rtith lhe kurguagt tntplolvtl in thc scheneinolificulion dated )9 0i.)():.1, Sccrrun llllit2l oJ rhc Act and ordcr dated 06 ()9 20-'I Sinca rtt our viar . thc plain and unantbiguous Ionguogt' usal in tlt .tt'lttme und order dated t)6.09 2021 sho,l.; thrtt thL' ntttitt' tndtr \c'clirttt lJ8 does not Jbll wilhin the 'ertclttio,t' the ludenenls cited by the learned Senbr Standtng ('rnrnscl lbr lntonrc Tut Deparlment are oJ' tlo tts.sislun<:t, The linytl cr i.s nov hare distmguished beltvecn i\iRl: unl lndtun ( tti:ans l'hc tnticc issued under fecti<tn l.!8 must compl.v with the tequiremenl oJ the Schcme wlrcther or not tlt' 'l'axpoS,av is Nl,'lilndion Citizen. Thus. lht second litth ol ur ,tltnat ol th( i(rrnul .\enior Stattding Lounscl /,tr lntonc lur Dcpartnrnt Llcserves to be rejected.
Page l8 of24
Wc orc in respat:tfirl dgrcement yvith lhc viey, taken bt.the Bombuv Lligh Court and are o/ the opinion thot the aforesoid underlinetl expression used in clause 3(b) of the schemc dated 29 03.2r))) locs not preclude the mandatory _faceless procedu'e [itr is.ttrttnce of trclicc under Section 148 of tha Act. Atttt othcr int crpre tutio,t. in our hunfile view, will nol only cause violencc lo the Iunguagc u.sed, bul w,ill ulso defeat the object for v.hith o tronsporent faceless procedure' was tnlroduce() Ilencc. tr,c are ttnabte to persuode ourselves lo occept o di//erent neoning lhon lhe literol meaning.flotving and conte),ed /)-om the provisions. 29. ln viav ,r/ /orcgting anulysis, it is clear thr.tr the re\pondent.\ have ,erred in not .following lhe mandatory -fat'clc.rs procedure us prescribed in the -scheme dated 29.03.202.'. Since nolices uncler Section llB of the Acr w,ere nol is.sued tn u lhtcless manncr. lhe enlire furlher proceeding ./buntlcd upon it aild us.\e.\smenl orders stand vitiated. Thus, the irnpugned nolices under Section 118 of the lct anci all con.tequ(nliol u.\'e.\\tnent 0rderS based thereupon are set aside. l.ibcrh, is rtstrved lo the respondents to proceed ugtrittst, thc petitioner.y in accordance with law.,'
A plain reading ol paragraph Nos.23 and 24 would make the plcture very clear so far as the fact that even though the batch of writ petitions in the case Sri Venkataramana Rcddy patloola (supra) were primarily pertaining to assessment orders in cases assigned to international tax cltarges, but the Division Be,ch has also d;alt w,ith
Page I9 of 24 the aspect of the assessment orders in cases assigned to central charges as well holding that it r,r,ould not make any diff-erence rvhether it is cases assigned to central charges or cases assigned to international tax charges. What was held was that, once when the statute substantially mandate having the assessment proceedings clrawn through automated scheme hllocation in a laceless manner, subsequently there does not seenl to be an1, exceptions carved out permitting the JAO to issue procecdings under Section 148 of the Act
In view of the sdid view expressed by the Division Bench of this High Court in the case of Sri Venkataramana Rcddy Patloola (supra), we are of the considered opinion that, il at all il we accept the analogy canvassed by the Income Tax Department. that by itsell- would be diluting the mandatc of the l-lon'ble SupFemc Court in thc case of Ashish Agarwal (supra) and at the sarne time it would also water down the series of writ petitions where the proceedings were issued by JAO and this High Court while allowing the rvrit petitions had set aside those proceedings.
The entire basis of the learned Additional Solicitor General seems to be the judgment of the Delhi High Court in the case of r'
l'age 20 of 21 T.K.S. Builders (l'.) Ltd. (supra). However, since there is an authoritativc decision on thc said issue by this very High Courr, the judicial proprietl, rccluires lbr this [Jench to honor the view taken by the Divisiorr Bcnch ol'this High Court itselt-.
The llon'blc Suprerne Cor"rrt in the case of Commissioncr of Income 'l'ax, Bhopal vs. G.M., Mittal Stainless Stee! (P) Ltd.? dealing w'ith an issue of. not lollowing the judgment of the jurisdictional High Coun, held at paragraph No.9 as under:
"9. .1put.fi-itm rht lttnguugc oJ Section 263 oJ the Income Tcu ilcr. if we \ett lo occapt rha :;ubmission of the appellont .thot the Rcvcnuc ..luthot itic.s tlithin the State cottld refuse lo follow thc iurisdit:tittnttl fligh ( ourt's decision on the ground lhut the dtti.st,trt o; unnc otlrr High ('ourt n,as peruling disposal h1, rhir ('ourt. it vtoull leud to an anarchic siluation wilhin lhc Slat(. l/ ut tfu tirnc vhcn lhe pov'er under,Scclion 263 was ererciscl tlit lttisirttr o/ thc lurisdrclional ltigh Court had rutt hecn stt trsitlt' lty lhis ('ourt or ot leasl futd nol been appcaled fi om. it tould not ba ope n lo lhe (:ommissioner to ltave proceedcd on lh( blt.sts lhot the High Court was arrontou\ ttntl that /1,(, rr.rdssi,?g offtcer who had acted in Itrtns o.f tht l!igh ('Lttu't's tleci.sion had acted erroneously. " 2003 11 5upreme Court Cases 441
t'agc 2 I o1'2,1 2'
Apafl f,rom the effect of judicial propriety, rvc arc ol' the considered opinion that plain reading of the judgrnent ()l'the Hon'ble Suprenre Court in the case ol' Ashish Agarwal (suprlr) se enrs ro be more convincing and logical as compared to the -iudgntent l-reavilv relied upon by the learned Additional Solicitor (ir'nt:ral i.t-. the judgment ol'the Delhi High Codrt in the case olT.K.S. lluilders (P.) Ltd. (supla) 2ll. So f'ar as the ground'iaised by the learned Additional Solicitor Gencral that unless the'notices in cases penaining to central charges are issued by JAO it would be difficult to enfbrce the r-etlLrircnrent as is otherwise requirecl under Section l53D ol the Act is concerned, wc need to look into the provisions of Section l5il) as lo \\'har ir speaks for. For ready reference. the relevant portion of' Sr:ction l5.ll) is reproduced hereunder " 153D. Prior approval necessary for ossessment in ttscs or req uisition. i\io order of asscssmenl or reosscssmcnl shall hL' ptt.s.strl ln tttt ,4s.ressirtg OfJicer below the rank of Joint ('ontm i.\.\it )nt! r in respect of each ossessmenl yccu rcJerral to itt L'ltu.:r lb1 oJ [suh-scclion (l) ofl settion 153,4 or the osse.tsnent y(ur re_ferred to in clause (b) o[sub-section (l) ol .stt'tron l5i l). except vtith,lhe prior approval of thc Joint ('omntt.t.s iont'r. , /
Page 2) of 24 A plain reading of the afbresaid Section would show that the provisions ol'Section l5lD would bc applicable in proceedings drawn under Section l5iA and Section l_<iB.
Section l53A of the Act speaks of how assessment in a case of search and seizurc or requisitiorr is to be made. For ready reference, the relevant portion of Section l53A is also reproduced hereunder: ' I 53,1. Assessment in cuse of search or requisition. (l )Notwithstonding arytthing contoined in section I 39, section ll7, settion l18. -section IJ9. saction l5l ancl section l-i3, in the cuse of o Jtctsoi t,here tt seurch is iniriakl under section I32 or b,tok.t of' ttccotrnl. olher doarmenls or ony ossets ore requisitioned unrler set.tion I 32A afier the 3 t st riay o.f May, 2003 [but on or hc.[ore the Jlst tto1,61.71orrr. 202.1J, the ,l.r.r cs.r'irg t )//icer shall (u) i.\.^ue rolice lo s.uch pcrson requiring him lo /irrnish within suth periotl, as may be speci/ied in tlrc rnlice lhc Nturn of- inctsne in respecl oJ euch ossestne t year Jdlting within sli assessmcnl ])eors and ./br the relevant usse.tsmcnl ),eur ot t.,enrc relcrred lo in clou.sc (b), in rhe prcscribetl ;form crnd verifed in the prestrrhed mannar and setting forlh such other purticulars as may be prescribed and rhe l.trot,isions of thi.r Acr slutll, .so Jir os muy be, upply accordingll, as f such return \rere o h (b) return required to be fttrnished under st:r'rirtn 139: assess or reds.te.s.s the total in((tmt ol .\t\ assessment years immediulely'prccaling t hrt assessmenl ye.r relcvanl lt) lht pr(\'ittlt\ t, 'it. ttt which such search is conducted or rtquisition i: made and for the relerunl os.\as:m(nt t(.t' t)t' yeors. " A plain reading of the afbresaid Section would clearlv indicate that though Section l53A is a non-obstante clause, but nowherc does the said Section speaks of an Exception carved out tiorrr Section I j lA. which in itself r'vas brought in by way of amendnrent to the irinance Act, 2021 w.e.t-. 01.04.2021. This in other rvords nreans tlrat until and unless there is a specific exception carved out fron'r the upplicability of Section 151A every assessment proceedings initiatctl cr e n il' it be a fier a search and seizure proceedings, even il it be uncler cettrr:rl charges or international tax charges, the provisions of Section l5l;\ is rvhat has to be adhered to for the purpose of initiating prrocccd ing of a a I assessment / re-assessment. Section l5lA also does not anywllerc say that the said provision of law shall be applica blc q tven not ln lt situation ol under any other provision of larv t
Pagc 24 ol24
In vierv of the sarne, wc are of the considereri opinion that the present batch of writ petitions also deserve to be and are accor<Jingly allowed quashing the impugned orders under challenge as they are in violation of the provisions Enacted by way of F inance Act, 202 I which came into lbrce u,.e.f. 01.04.2021. Accordingly, we hold thar the question of law flramed, as to ,.whether in cases assigned to centr.al charges and the notices issued therein lor reassessnrent courcr be issued by the JAo or it has to be in a faceless manner,, stancs decidccr in I'avour of the pctitioners holding that it can be i.r a faceress ,lanner alone and the question of law thus stands answered against the Itcveuue. No costs. 31. .A-s a sequel, miscellaneous petitions pending il any, shall stand slased- \ //// SD/.MOHD. ISMAIL DEPUTY REGISTRAR 16\€" oFFrcER To 1 2 4 5 r) Deputy Commissioner of lncome-tax, Central Circle - 3(3), Hyderabad, AayakarBhawan, Opp. LB Stadium, Basheer Baugh, Hyderabad - 500004 Principle Commissioner of lncome{ax (Central), Hyderabad, AayakarBhawan, Bth Floor, BasheerBagh, L.B. Stadium Road, Hyderabad-500004 The Secretary, Union of lndra, Department of Revenue, Ministry of Finance, Government of lndia, North-Block, New Delhi-1 1000'1 The Assistant Commissioner of lncome Tax, Central Circle-3(2), Aayakar Bhavan, Basheerbagh, Hyderabad - 500004, The Assistant Commissioner of lncome Tax, Central Circle - 1(4), Aayakar Bhavan, Basheerbagh, Hyderabad-500004, Assessment Unit, lncome Tax Department, National Faceless Assessment Centre Government of lndia, Jawaharlal Nehru lVarg, Block B, Press Enclave, Savitri Nagar New Delhi - 1'10002 Assistant Commissioner of lncome Tax, Circle-8(1), Hyderabad Srgnature Towers, Sy No 6(P) of Kondapur Opp. Botanical Gardens, Serilingampally (M) R.R.Dist., Hyderabad - 500084 The Deputy Commissioner of lncome tax, Central Circle - 1(1), Aayakar Bhavan Hyderabad - 500004 7 8
t5
The Office of Commissioner, lncome Tax Department, I\,4inistry of Financ9, Government of lndia, New Delhi. 10.lncome Tax.Department, office of the Assistant commissioner of lncome Tax, Central Circle - 1(i) Hyderabad 1 1 . lncome.Tax Officer, Central Circle _ 1 (.1 ) Hyderabad 12.Shyam Kumar Supaur, Central Circle I t'ltt' - -- 1 3. Assessment Unit, lncome lax Departmeht'Central Circle 1( j ) AAYKAR plly^ut,opposite L.B Stadium, e'asher Aagh, tjyOeraUaO, ft6;g;;; "' 500004 l1 Jl " Pgp,lty Commissioner-of tncome, Tax, Circte_2(1), Hyderabad
The Chief Commissioner of tncome rix iniome rri fb*lr;;, a.C. Guards, lrilasab Tank, Hyderabad S00 004. 16 The Deputy Commissioner of lncome Taxi Central Circte_1 (3), Aayakar __ p.havgn, 7rh Ftoor. Basheerbash, HvOeradaOtOO boa r /. rne Assessment Unit, Income Tax Department National f-aceless Assessment Centre Room, No 401, Znd Floor, ERamp Jawaharljl Nehru. Stadium, Dethi 110 003. lB.One CC to SRI DUNDU_.SASHANK MANMOHAN, Advocate IOPUCI j9 9n" cC ro SRtS.K JEELANT BnsnA, Aavocai" ibpudi---,- --r ?9 9n" CC to M/s. MyTRt tNDUKunu, Aov-otate'iciFucl . ?1 gne cc to sRtA v RAGHU RArvt, Adv;c;i;ib,eucl ' 22.One CC to SRt MOHD lrUKHrunUOOirV, AO'r"*te'[OpUC] ?? 9nu CC to SRt K.covlNDA Rno, Advociie tOnu'ii 24 one CC to M/s. J.SUN|THA, srruion 5C eo'n ir"o ioeucl 2s 9lp CC ro SRtA.NARAS|MHA SAnuA, norji's"Orrclron oF tND|A loPUCl ?9 9n" CC to SRt PRAVEEN.KUJ\,AR, SENtoR SC FOR TNCOME TAX IopUCl 27 9Le c9 to sRr cADr pRAVEEN kuMAc, Dv -soLrcricin c'r-r.rrii'iid"dr""' tNDtA [OPUC] .
Two CD Copies PSK BS
I6 HIGH COURT DATED:14tlt|ZO2S 't 2 4 il]l 2025 COMMON ORDER I..P_. I9S' 26645,26654,26667,28491,26788 OF 2024 AN D 1 2437,956'1,1 4549,1.4664,1 467 4,1 ztt 3 0F 2oi5 (-) t1.(' :.. I :. li l'i/ siir.,=rrc.rlr:a) --::\-_i-:jr' ALLOWING THE WRIT PETITIONS WITHOUT COSTS qb oR THE S i {
More judgments on Section 148
- ACIT Central Bilaspur, Bilaspur vs Arun Kumar Agrawal, SaktiITSSA 26/RPR/2025[2018-19]Status: Disposed21 Oct 2026AY 2018-19
- Vinod Agrawal, Kawardha vs Assisstant Commissioner of Income Tax…ITA 666/RPR/2026[2019-20]Status: Heard21 Oct 2026AY 2019-20
- Sar Business Tradelink Private Limited… vs Income Tax Officer, Ward - 1(2), RaipurITA 599/RPR/2026[2014-15]Status: Heard21 Oct 2026AY 2014-15
- Neo Incorporation, Rajkot vs DCIT Circle- 1(2), RajkotITA 471/RJT/2026[2012-2013]Status: Disposed21 Oct 2026AY 2012-2013
- Adj Agri International LLP, Rajkot vs The Income Tax Officer, Ward-1(1)(1), RajkotITA 1198/RJT/2026[2018-19]Status: Disposed21 Oct 2026AY 2018-19
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