Loading judgment…
Facts
The assessee did not file an Income Tax Return for AY 2018-19 despite selling Bitcoin for Rs. 15,47,059. The Jurisdictional Assessing Officer (JAO) reopened the assessment by issuing a notice under Section 148, and the assessment was completed under Section 147, assessing total income at Rs. 7,37,120. The CIT(A) confirmed the addition.
Held
Following the jurisdictional High Court's decision, the Tribunal held that the notice under Section 148 issued by the Jurisdictional Assessing Officer (JAO) was invalid, as it is mandatory for such notices to be issued by the Faceless Assessing Officer (FAO). Consequently, the reassessment notice and all consequential orders were set aside, with a liberty for the Revenue to seek revival if the Supreme Court reverses the precedent relied upon.
Key Issues
Whether reassessment proceedings initiated by a notice under Section 148, issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO), are valid and within jurisdiction.
Sections Cited
147, 148, 144B, 151A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2018-19 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 17.07.2025 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s 144B of the Income-tax Act, 1961 (hereinafter “the Act”) dated 10.01.2024.
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.
1. 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.
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 jurisdiction, 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 Jurisdictional 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 Bench in the case of Thangamuthu Balakrishnan vs. ITO in dated 22.09.2025 (Chennai-Trib.)
4. On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities.
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 Jurisdictional 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 Nos.25223 of 2024 held that it does not matter if the Jurisdictional Assessing Officer (JAO) issues the notice and it is not mandatory that it should be issued by the Faceless Assessment Officer (FAO). Another learned Single Judge in order dated 21.04.2025 in WP No.22402 of 2024 and batch cases, followed what was held by the Bombay High Court in Hexaware Technologies Ltd vs. Assistant 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.
3. 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
Justice), that it is mandatory for the FAO to issue the concerned notices and issuance thereof by the JAO would make the notice invalid.
5. 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.
6. 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.
7. 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 jurisdictional 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 jurisdictional High Court, we also keep open of rights and contentions of parties including liberty to approach this bench, in case, the Revenue succeeds before the Apex Court for revival of this appeal.
In the result, the appeal filed by the assessee is allowed.
Order pronounced on 27th day of November, 2025 at Chennai.