MANNAGATTI RADHABAI,KANCHIPURAM vs. ITO, NCW-22(4), TAMBARAM

The assessee is an individual and had not filed the return of income for the relevant assessment year. The J.A.O, based on the information that the assessee had sold BITCOIN amounting to Rs.15,47,059/-, but had not filed the return of income reopened the assessment by issuing notice u/s. 148 of the Act on 04.04.2022. Thereafter, the assessment was completed u/s. 147 of the Act by assessing the total income at Rs. 7,37,120/- by the F.A O. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). However, the Ld. CIT(A) confirmed the addition as the assessee had not made any submissions. 3. At the outset, the Ld. Authorized Representative (A.R.) of the assessee submitted that the reassessment proceedings were initiated by the JAO, issuing notice on 04.04.2022 u/s. 148 of the Act, which is in violation of section 151A of the Act and CBDT notification dated 10.01.2024 and therefore invalid. The Ld. AR further argued that as the notice issued u/s 148 is without juri iction, the consequential assessment order is invalid and to be quashed. The Ld. AR, in support of his contention relied on the decision of the Hon’ble Juri ictional High Court in TVS Credit Services Ltd. v. DCIT, WP No.22402 of 2024 & WMP No.13336 of 2023 (Mad.) and the order of the Co-ordinate Mannagatti Radhabai

We have heard the rival submissions and perused the material available on record. It is an admitted fact that the notice u/s. 148 of the Act was issued by the JAO on 04.04.2022, and the assessment order was subsequently passed by the FAO on 10.01.2024. The Hon’ble Juri ictional High Court in TVS Credit Services Ltd. v. DCIT (supra), on identical facts, where notice u/s 148 was issued by the JAO has held as under: “2. Learned Single Judge in order dated 20.12.2024 in WP Commissioner of Income Tax'; and opined that it was mandatory for the FAO to issue notice and issuance of notice by JAO would make the notice invalid.

Learned Single Judge thereafter directed the matter to be placed before the Chief Justice for constituting a Division Bench to consider the divergent views. It is, therefore, all these matters were listed before us today.

We follow the law as laid down in Hexaware Technologies Ltd (supra), the said judgment was authored by one of us (Chief Mannagatti Radhabai

Counsels for assessees are ad idem that the law as laid down in Hexaware Technologies Ltd (supra) will apply. Learned Additional Solicitor-General, however, submits that the Revenue does not accept the law as laid down in Hexaware Technologies Ltd (supra); and that there is a special leave petition filed against the order and judgment in Hexaware Technologies Ltd (supra) and the same is expected to be taken up after the Supreme Court reopens.

Admittedly, learned Additional Solicitor-General, in fairness, states that there is no stay. Therefore, the law as laid down by Hexaware Technologies Ltd (supra) applies.

It is clarified that if the Apex Court reverses the judgment of Hexaware Technologies Ltd (supra), parties will be governed by the decision of the Apex Court.

Keeping open all rights and contentions of parties, including liberty to apply to this Court, in case the Revenue succeeds before the Apex Court, for revival of these petitions, the notices issued in these petitions are quashed and set aside.

In these petitions, apart from the issue of notices issued by JAO instead of FAO, all or many of the issues which were considered in Hexauxare Technologies Ltd (supra) are involved.

To the extent the issues raised in Hexaware Technologies Ltd (supra) are not covered, those are kept open to be raised at the appropriate stage.

With the liberty as noted above, all petitions stand disposed of holding in favour of assessees. There will be no order as to costs. Consequently, the interim applications also stand disposed of.”

Therefore, respectfully following the decision of the Hon’ble juri ictional High Court, supra, we set aside the impugned notice u/s.148 of the Act and consequential orders thereof. However, in the light of the Para No.8 of the judgment of the juri ictional High Court, Mannagatti Radhabai

In the result, the appeal filed by the assessee is allowed.