INCOME TAX OFFICER, COIMBATORE vs. SIVAKUMAR SATHYAPRIYA, COIMBATORE

आदेश/ ORDER

PER INTURI RAMA RAO, AM :

This appeal filed by the Revenue directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], Delhi passed under section 250 of the Income Tax Act, 1961 for the

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A.Y.2017-18 dated 17.10.2025. The Revenue raised the

following grounds of appeal :

“A. The order of the CIT(A) is bad in law and on facts as it has not considered the decision of the Hon’ble Madras High Court in the case of TVS Credit Services Ltd in entirety. C. Whether on the facts and circumstances of the case, the CIT(A) is justified in quashing the notice issued under Section 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 IAO from issuing such notices? D. Whether the CIT(A), while quashing the notices issued by the JAD under Section 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'? E. Whether the CIT(A)'s decision to quash the notices issued by the JAO under Section 148 is in alignment with the provisions of Section 1448 which comes into picture only after the process of issuance of notice under Section 148 of the Act has been completed? F. Whether on the facts and circumstances of the case, the CIT(A) is justified in quashing the notices issued under Section 148 by the JAO, as per automated allocation and risk management strategies as per provisions of Section 151A read with section 1448 of the Income Tax Act? G. Whether the CIT(A) is correct in law in holding that the Section 151A of the Income Tax Act, r/w CBDT Notification No.18/2022 dated 29.03.2022 and Notification No. 50 1400(E) dated 2 28.03.2022 issued u/s 130 of the Act mandate that the proceeding

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under Section 148A and notices u/s 148 shall only be faceless, whereas the provisions of Sections 148A and 148 of the Act require enquiry and issue of notices by Assessing Officer?

H. Whether on the facts and circumstances of the case, the CIT(A) has erred in incorrectly interpreting the notification dated 29.03.2022 reads with Section 151A, when the phrase "in a Faceless Manner" refers only to be procedure of assessment, reassessment of re-computation under section 147 of the Act and not to the issuance of Notice u/s 148 of the Act. L. Whether the order passed by the CIT(A) quashing the notices issued under Section 148 of the Income Tax Act, 1961, is legally sustainable given that Sections 119 and 120 of the Income Tax Act, 1961 confer concurrent jurisdiction to both the Jurisdictional Assessing Officer (JAO) and the Faceless Assessing Officer (FAO) / National Faceless Assessment Centre (NFAC), and the faceless assessment scheme does not explicitly prohibit the Jurisdictional Assessing Officer from issuing such notices? M. Whether the CIT(A) is right in holding that the scheme notified on 29.03.2022 does not authorize the Jurisdictional Assessing Officer (JAO) to issue notices under Section 148 of the Income Tax Act, 1961, despite the notification dated 29.03.2022 stating that the scheme is applicable only "to the extent" provided in Section 1448 of the Income Tax Act, 1961, which does not refer to the issuance of notices under Section 148 of the Income Tax Act, 19617

K. Whether the notices issued under Section 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?

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L. Whether the CIT(A) is justified in quashing the notices under Section 148 as well as the orders passed under Section 148A(d) of the Income Tax Act, 1961 by holding that after the notification dated 29.03.2022, the Jurisdictional Assessing Officer (IAO) is precluded from issuing such M. 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 1448 of the Income Tax Act, 1961, when the scheme notified on 29.03.2022 does not restrict the power to issue notices under Section 148 of the Income Tax Act, 1961 to within the scope of Section 144B of the Income Tax Act, 1961? N. 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 under Section 148, thereby preserving the statutory authority vested in the Assessing Officers? O. 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)?”

is an Individual. No regular Return of Income under the

provisions of section 139 of the Act was filed for the A.Y.2017-

undertook the financial transactions in the nature of cash deposit 4

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of Rs.20,44,000/- and Rs.27,60,000/-, Rs.74,12,500/- accounts

maintained with Axis Bank Limited, Dhanalaxmi Bank Limited,

respectively. The Assessee also made cash payments for goods

and services to the tune of Rs.3,00,000/- to Repco Home Finance

Limited, the Jurisdictional Assessing Officer(JAO) formed an

opinion that the income got escaped assessment from tax.

Accordingly, a notice u/s.148 was issued on 30.01.2024 after duly

complying with the procedure laid down u/s.148A of the Act.

The respondent assessee neither complied with the notice issued

u/s.148 of the Act, nor the notices issued u/s.142(1) of the Act .

In the circumstances, the Assessing Officer proceeded with

framing best judgment assessment u/s.144 vide order dated

17.03.2025 passed u/s.147 read with section 144B of the Income

Tax Act, 1961 at a total income of Rs.13,36,160/-. While doing

so, the Assessing Officer made addition of Rs.13,36,160/-.

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was preferred before ld.CIT(A)[NFAC] contending inter-alia the

Jurisdictional Assessing Officer i.e. ITO, Non Corporate, Ward-

1(1), Coimbatore ought not to have issued notice u/s.148 of the

Act, as the jurisdiction to issue the aforesaid notice, vests with the

Faceless Assessing Officer(FAO) in accordance with the

provisions of explanation inserted to Section 151A read with

CBDT Notification dated 29.03.2022 the ld.CIT(A)NFAC relied

on the following decisions of Hon’ble Bombay High Court in

Hexaware Technologies Ltd. Vs. ACIT [2023] 149 taxmann.com

451, Hon’ble Madras High Court in TVS Credit Services Ltd. vs.

DCIT in WP No.14255 of 2023, 22.04.2025 and Hon’ble

Telangana High Court in Kings Pride Infra Projects Pvt. Ltd. vs.

DCIT [2024] 157 taxmann.com 134 held that the issuing notice

u/s.148 by the Jurisdictional Assessing Officer(JAO) is ultra vires

the notification no.18 of 2022 of CBDT and the consequently held 6

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that the notice issued u/s.148A(b) and 148A(d) and 148 are null

and void.

Revenue is in appeal before this Tribunal in the present appeal by

challenging the correctness of the decision of the

ld.CIT(A)[NFAC]. It is submitted before us that in view of the

proposed amendment in the Finance Bill 2026 introduced in the

Parliament on 01.02.2026 and also in the light of orders passed by

the Supreme Court in bunch of cases in Special Leave Petition

(Civil) Diary No(s).57403/2025 vide order dated 03.02.2026

setting aside the orders passed by the Hon’ble Bombay High

Court and Hon’ble Telangana High Court for fresh consideration

before the Hon’ble High Courts, the matter may be remanded to

the file of ld.CIT(A)[NFAC] for fresh consideration and disposal

in accordance with law after affording opportunity of being heard

to the assessee. 7

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despite the issued service of notice of hearing.

perused the material available on record. The ld.CIT(A)[NFAC]

held that the exercise of jurisdiction by the JAO to issue notice

u/s.148A(b), 148A(d) and 148 is illegal and null and void

following the decisions of Hon’ble Bombay High Court and

Hon’ble Telangana High Court and Hon’ble Madras High Court.

However, an Amendment was proposed in the Finance Bill 2026

which was introduced in the Parliament on 01.02.2026 proposing

to nullify the decision of Hon’ble High Courts cited(supra).

Further, we also note that the Hon’ble Apex Court in batch of

appeals preferred by the Revenue restored the matters to the

Hon’ble High Courts for fresh consideration in the light of

proposed Amendment in the Finance Bill with retrospective effect 8 01.04.2025. Therefore, we are of the considered opinion that in

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order to meet the ends of justice, the matter requires remand to the

file of ld.CIT(A)[NFAC] for denovo disposal of appeal keeping in

view the proposed amendments in the Finance Bill 2026.

Allowed for statistical purpose.

Order pronounced in the open Court on 13th March, 2026.

Sd/- Sd/- (INTURI RAMA RAO) (GEORGE GEORGE K) VICE PRESIDENT ACCOUNTANT MEMBER Chennai; �दनांक / Dated : 13th March, 2026/ SGR, Sr.PS आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT Chennai/Madurai/Coimbatore/Salem. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “डी” ब�च, 4. चे"नई / DR, ITAT Chennai. गाड$ फ़ाइल / Guard File. 5.