DHANALAKSHMI,CHENNAI vs. ITO, NCW-8(1), CHENNAI

The assessee is an individual and has not filed the return of income for the relevant assessment year. The Juri ictional Assessing Officer (hereinafter referred as “JAO”) on the basis of information that the assessee had made huge cash deposits in her bank accounts, but has not filled return of income, reopened the assessment by issuing notice under section 148 of the Act on 04.04.2022. Subsequently , Faceless Assessing Officer (hereinafter referred as “FAO”) has passed assessment order u/s. 147 r.w.s 144 of the Act, making an addition of Rs.96,60,969/- u/s 69A r.w.s.115BBE of the Act as unexplained money and Rs.5,55,281/- as income from other sources. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) with a delay of 143 days. However, the Ld. CIT(A) did not condone the delay and dismissed the appeal in limine.

The assessee in ground no 3 has challenged the reassessment proceeding void-ab-initio as the notice for reopening was issued by J.A.O in violation of CBDT instructions of faceless assessment scheme. The Ld. AR has argued that Ld. CIT(A) has dismissed the appeal for the reason that there was 14 days delay in filling appeal, though there was sufficient cause for the delay in filing the appeal. The Ld. A.R therefore, prayed that the orders of lower authorities be set Dhanalakshmi

Learned Single Judge thereafter directed the matter to be placed before the Chief Justice for constituting a Division Bench to Dhanalakshmi

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.

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 Dhanalakshmi

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