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Facts
The assessee appealed against the order of the Ld. CIT(A) concerning reassessment proceedings. The primary issue was the validity of notices issued under Section 148 of the Income Tax Act, 1961, by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO) under the e-Assessment Scheme.
Held
The Tribunal held that notices issued under Section 148 by the JAO were invalid and bad in law, as they contravened the Faceless Scheme notified by the CBDT. Consequently, the reassessment orders based on these notices were quashed.
Key Issues
Whether notices issued for reassessment under Section 148 of the Income Tax Act by the Jurisdictional Assessing Officer are valid when a Faceless Scheme is in operation.
Sections Cited
147, 148, 148A, 151, 151A, 144B, 119
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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI AMITABH SHUKLA
आदेश / O R D E R
PER ABY T. VARKEY ABY T. VARKEY, JM: These cross-appeal appeals preferred by the assessee and the Revenue are and the Revenue are against the order of the Learned Commissioner of Income Tax (Appeals), against the order of the Learned Commissioner of Income Tax (Appeals), against the order of the Learned Commissioner of Income Tax (Appeals), (hereinafter referred to as 'Ld.CIT(A)'), Chennai, (hereinafter referred to as 'Ld.CIT(A)'), Chennai, all dated dated 20.03.2025 & 29.03.2025 for the Assessment Year for the Assessment Years (hereinafter referred to as 'AY eferred to as 'AYs')
2017-18 to 2019-20.
2. At the outset, the Ld.AR of the assessee drew our attention to At the outset, the Ld.AR of the assessee drew our attention to At the outset, the Ld.AR of the assessee drew our attention to grounds of appeal preferred by it wherein assessee has raised a legal grounds of appeal preferred by it wherein assessee has raised a legal grounds of appeal preferred by it wherein assessee has raised a legal issue challenging the notice issue challenging the notice(s) issued by the Jurisdictional Assessing issued by the Jurisdictional Assessing Officer (hereinafter referred to as 'JAO') u/s.148 of the Income Tax Act, (hereinafter referred to as 'JAO') u/s.148 of the Income Tax Act, (hereinafter referred to as 'JAO') u/s.148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act ') 1961 (hereinafter referred to as 'the Act ') for AYs 2017-18 to 2019 18 to 2019-20 as bad in law and hence consequent passing of the assessment order by the bad in law and hence consequent passing of the assessment order by the bad in law and hence consequent passing of the assessment order by the Assessing Officer also is null in the eyes o Assessing Officer also is null in the eyes of law.
1. 3. According to the Ld.AR, the impugned notice According to the Ld.AR, the impugned notice(s) issued u/s.148 issued u/s.148 are invalid and bad in law being issued by the Jurisdictional Assessing Officer invalid and bad in law being issued by the Jurisdictional Assessing Officer invalid and bad in law being issued by the Jurisdictional Assessing Officer (herein after 'JAO') which is not in accordance with Sec (herein after 'JAO') which is not in accordance with Section tion 151/151A of the Act read with the the Act read with the Faceless Scheme notified by CBDT on 29 March Scheme notified by CBDT on 29 March 2022 for assessment, reassessment or re 2022 for assessment, reassessment or re-computation u/s.147/issuance computation u/s.147/issuance & 1612 /Chny/2025 (AYs 2017 (AYs 2017-18 & 2018-19) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt of notice u/s.148 of the Act or for conducting of inquiry or issuance of of notice u/s.148 of the Act or for conducting of inquiry or issuance of of notice u/s.148 of the Act or for conducting of inquiry or issuance of show cause notice or passing of order u/s.148A of the Act or sanction for show cause notice or passing of order u/s.148A of the Act or sanction for show cause notice or passing of order u/s.148A of the Act or sanction for issuance of notice under section 151 of the Act. Further, according to the ance of notice under section 151 of the Act. Further, according to the ance of notice under section 151 of the Act. Further, according to the Ld. AR, in exercise of the powers conferred u/s.151A of the Act, AR, in exercise of the powers conferred u/s.151A of the Act, AR, in exercise of the powers conferred u/s.151A of the Act, the CBDT had issued a notification dated 29.03.2022 [after laying the same before had issued a notification dated 29.03.2022 [after laying the same before had issued a notification dated 29.03.2022 [after laying the same before each House of Parliament] and formulat each House of Parliament] and formulated a Scheme called "the e ed a Scheme called "the e- Assessment of Income Escaping Assessment Scheme, 2022"(herein after Assessment of Income Escaping Assessment Scheme, 2022"(herein after Assessment of Income Escaping Assessment Scheme, 2022"(herein after 'the Scheme') which provide provided that (a) the assessment, reassessment or that (a) the assessment, reassessment or re-computation u/s.147 of the Act and (b) the issuance of notice u/s.148 computation u/s.147 of the Act and (b) the issuance of notice u/s.148 computation u/s.147 of the Act and (b) the issuance of notice u/s.148 of the Act shall be through automated allocation, in accordance with risk through automated allocation, in accordance with risk through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in Section management strategy formulated by the Board as referred to in Section management strategy formulated by the Board as referred to in Section 148 of the Act for issuance of notice and in a faceless manner, to the 148 of the Act for issuance of notice and in a faceless manner, to the 148 of the Act for issuance of notice and in a faceless manner, to the extent provided in Section 144B of the extent provided in Section 144B of the Act with reference to with reference to making assessment or reassessment of total income or loss of assessee. assessment or reassessment of total income or loss of assessee. assessment or reassessment of total income or loss of assessee.
Therefore, according to Ld Therefore, according to Ld. AR, since the impugned notice(s) (s) u/s 148 has been issued by JAO and not by the NFAC, there is per been issued by JAO and not by the NFAC, there is per-se contravention of se contravention of the provisions of the Act, thus violat the provisions of the Act, thus violating the principles of Rule of Law, ing the principles of Rule of Law, which vitiates the reopening of the assessment which vitiates the reopening of the assessment. He particularly invited our . He particularly invited our attention to the recent decision of attention to the recent decision of the jurisdictional High Court urisdictional High Court in the case of Dadha Pharma LLP vs DCIT, Central Circle (W.P. No. Dadha Pharma LLP vs DCIT, Central Circle (W.P. No. Dadha Pharma LLP vs DCIT, Central Circle (W.P. No. 35385/2024) has held that held that, even in the context of search assessment even in the context of search assessment , 1546 1545, 1546 & 1549/Chny/2025 (AYs 2017 2017-18 to 2019-20) & & & 1612 /Chny/2025 (AYs 2017 (AYs 2017-18 & 2018-19) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt proceedings / Central Circle charge, the proceedings u/s 148 of the Act proceedings / Central Circle charge, the proceedings u/s 148 of the Act proceedings / Central Circle charge, the proceedings u/s 148 of the Act can be initiated only by the Faceless Assessing Officer (FAO) and not the can be initiated only by the Faceless Assessing Officer (FAO) and not the can be initiated only by the Faceless Assessing Officer (FAO) and not the Jurisdictional Assessing Officer (JAO) by following th Jurisdictional Assessing Officer (JAO) by following the law laid down by e law laid down by the Bombay High Court in the case of the Bombay High Court in the case of Bmc Software India (P.) Ltd. Vs Bmc Software India (P.) Ltd. Vs DCIT (167 taxmann.com 39) DCIT (167 taxmann.com 39). The Ld. AR further pointed out that this pointed out that this legal issue raised by the assessee has legal issue raised by the assessee has also been answered in been answered in in their favor by other Hon'ble Karnata Karnataka High Court in the case of ka High Court in the case of Ramachandra Reddy Ravi Kumar Vs DCIT (178 taxmann.com 491) Reddy Ravi Kumar Vs DCIT (178 taxmann.com 491). .
4. Per contra, the Ld. Per contra, the Ld. CIT DR supported the action of the JAO issuing DR supported the action of the JAO issuing notice u/s.148 of the Act and submitted that both the NFAC & JAO have notice u/s.148 of the Act and submitted that both the NFAC & JAO have notice u/s.148 of the Act and submitted that both the NFAC & JAO have got concurrent jurisdictio concurrent jurisdiction and therefore, notice is valid and also n and therefore, notice is valid and also submitted that there was no prejudice caused to the assessee. submitted that there was no prejudice caused to the assessee. submitted that there was no prejudice caused to the assessee. She further contended that, further contended that, the present case pertains to the central charges, the present case pertains to the central charges, and therefore these matters matters would fall outside the purview of the scheme would fall outside the purview of the scheme made u/s.151A of the Act ade u/s.151A of the Act. She thus urged that this legal plea now being . She thus urged that this legal plea now being raised by the assessee ought to be rejected and relied on the decisions of raised by the assessee ought to be rejected and relied on the decisions of raised by the assessee ought to be rejected and relied on the decisions of the Hon’ble Calcutta High Court in the case of the Hon’ble Calcutta High Court in the case of Triton Overseas (P) Ltd. Triton Overseas (P) Ltd. v. Union of India (156 Taxmann.com 318 v. Union of India (156 Taxmann.com 318) and Hon’ble Delhi High and Hon’ble Delhi High Court in the case of T.K.S. Builders (P) Ltd. v. ITO ( 469 ITR 657) T.K.S. Builders (P) Ltd. v. ITO ( 469 ITR 657) T.K.S. Builders (P) Ltd. v. ITO ( 469 ITR 657). , 1546 1545, 1546 & 1549/Chny/2025 (AYs 2017 2017-18 to 2019-20) & & & 1612 /Chny/2025 (AYs 2017 (AYs 2017-18 & 2018-19) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 5 ::
5. Heard both the parties. It is observed that, this identical legal issue Heard both the parties. It is observed that, this identical legal issue Heard both the parties. It is observed that, this identical legal issue has been considered and adjudicated in favour of the assessee by the has been considered and adjudicated in favour of the assessee by the has been considered and adjudicated in favour of the assessee by the coordinate Bench of this Tribunal in the case of of this Tribunal in the case of Jayaraman Rudrasekar Jayaraman Rudrasekar vs DCIT (ITA No. 1142/Chny/2025) vs DCIT (ITA No. 1142/Chny/2025) wherein this Tribunal following wherein this Tribunal following the law laid down by the Hon’ble Bombay High Court i the law laid down by the Hon’ble Bombay High Court in the case of n the case of BMC Software India (P) Ltd (supra) Software India (P) Ltd (supra) held that even the reopening of held that even the reopening of assessment which relates to central charges cannot be sment which relates to central charges cannot be excluded from the excluded from the scheme notified by CBDT scheme notified by CBDT dated 29.03.2022 and therefore the and therefore the action of the JAO issuing notice u/s.148 of the Act the JAO issuing notice u/s.148 of the Act was held to be bad in law. The was held to be bad in law. The relevant findings of this Tribunal which is fou relevant findings of this Tribunal which is found to be squarely applicable nd to be squarely applicable in the context of the present case as well, is as under: in the context of the present case as well, is as under:-
“5. In his rejoinder, the Ld.AR for assessee submitted that the 5. In his rejoinder, the Ld.AR for assessee submitted that the 5. In his rejoinder, the Ld.AR for assessee submitted that the contention of the Ld.DR, since the present case falls under the contention of the Ld.DR, since the present case falls under the contention of the Ld.DR, since the present case falls under the jurisdiction of Central Circle, the jurisdiction of Central Circle, the scheme made u/s.151 of the Act will scheme made u/s.151 of the Act will not apply is no longer re not apply is no longer re-integra and brought to our notice that the very integra and brought to our notice that the very same contention same contention was raised before the Hon'ble Bombay High Court in as raised before the Hon'ble Bombay High Court in the case of BMC Software India Ltd. v. DCIT reported in [2024] 167 the case of BMC Software India Ltd. v. DCIT reported in [2024] 167 the case of BMC Software India Ltd. v. DCIT reported in [2024] 167 taxmann.com 39 (Bom.) wherein the same contention was raised at 39 (Bom.) wherein the same contention was raised at 39 (Bom.) wherein the same contention was raised at Para No.6 and the Hon'ble High Court has repelled the same by Para No.6 and the Hon'ble High Court has repelled the same by Para No.6 and the Hon'ble High Court has repelled the same by observing at para 9 infra observing at para 9 infra ".............that the Revenue's contention that ".............that the Revenue's contention that as the present case pertains to the central charges, it would be re as the present case pertains to the central charges, it would be re as the present case pertains to the central charges, it would be required to be excluded, cannot be accepted and it would be required to be to be excluded, cannot be accepted and it would be required to be to be excluded, cannot be accepted and it would be required to be rejected. The writ petition is accordingly allowed....." rejected. The writ petition is accordingly allowed....." by holding as by holding as under:
5. In the present case, it is apparent that the respondent Revenue 5. In the present case, it is apparent that the respondent Revenue 5. In the present case, it is apparent that the respondent Revenue has not complied with the Scheme notif has not complied with the Scheme notified by the Central ied by the Central Government pursuant to Section 151A(2) of the Act. The Scheme has Government pursuant to Section 151A(2) of the Act. The Scheme has Government pursuant to Section 151A(2) of the Act. The Scheme has also been tabled in Parliament and is in the character of subordinate also been tabled in Parliament and is in the character of subordinate also been tabled in Parliament and is in the character of subordinate legislation, which governs the conduct of proceedings under Section legislation, which governs the conduct of proceedings under Section legislation, which governs the conduct of proceedings under Section 1546 1545, 1546 & 1549/Chny/2025 (AYs 2017 2017-18 to 2019-20) & & & 1612 /Chny/2025 (AYs 2017 (AYs 2017-18 & 2018-19) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 6 ::
148A as well as Section 148 of th 148A as well as Section 148 of the Act. In view of the explicit e Act. In view of the explicit declaration of the law in Hexaware, the grievance of the petitioner declaration of the law in Hexaware, the grievance of the petitioner declaration of the law in Hexaware, the grievance of the petitioner- Assessee insofar as it relates to an invalid issuance of a notice is Assessee insofar as it relates to an invalid issuance of a notice is Assessee insofar as it relates to an invalid issuance of a notice is sustainable and consequently, the very manner in which the sustainable and consequently, the very manner in which the sustainable and consequently, the very manner in which the proceedings have been initiat proceedings have been initiated, vitiates the proceedings. ed, vitiates the proceedings.
6. Learned counsel for both the parties agree that the proceedings 6. Learned counsel for both the parties agree that the proceedings 6. Learned counsel for both the parties agree that the proceedings initiated under Section 148 of the Act would not be sustainable in initiated under Section 148 of the Act would not be sustainable in initiated under Section 148 of the Act would not be sustainable in view of the judgment rendered in Hexaware. Learned counsel for the view of the judgment rendered in Hexaware. Learned counsel for the view of the judgment rendered in Hexaware. Learned counsel for the petitioner-Assessee has a Assessee has also drawn our attention to a recent decision lso drawn our attention to a recent decision of this Court in Nainraj Enterprises Pvt. Ltd. v. Deputy Commissioner of this Court in Nainraj Enterprises Pvt. Ltd. v. Deputy Commissioner of this Court in Nainraj Enterprises Pvt. Ltd. v. Deputy Commissioner of Income Tax, Circle of Income Tax, Circle-4(3) (1), Mumbai & Ors. 1, whereby in similar 4(3) (1), Mumbai & Ors. 1, whereby in similar circumstances, this Court has allowed the petition considering the circumstances, this Court has allowed the petition considering the circumstances, this Court has allowed the petition considering the provisions of Section 151A of the Act. However, learned counsel for ions of Section 151A of the Act. However, learned counsel for ions of Section 151A of the Act. However, learned counsel for the respondents would submit that as the present case pertains to the respondents would submit that as the present case pertains to the respondents would submit that as the present case pertains to the central charges, the same would stand covered by the order the central charges, the same would stand covered by the order the central charges, the same would stand covered by the order dated March 31, 2021 passed under section 144B(2) read with dated March 31, 2021 passed under section 144B(2) read with dated March 31, 2021 passed under section 144B(2) read with section 119 of the Act, and the further order dated September 6, on 119 of the Act, and the further order dated September 6, on 119 of the Act, and the further order dated September 6, 2021, passed under these sections. Consequently, the contention is 2021, passed under these sections. Consequently, the contention is 2021, passed under these sections. Consequently, the contention is that this case would fall outside the purview of the scheme made that this case would fall outside the purview of the scheme made that this case would fall outside the purview of the scheme made under Section 151A of the Act, which, but for being under the ce under Section 151A of the Act, which, but for being under the ce under Section 151A of the Act, which, but for being under the central charge, would otherwise be covered by the decision of this Court in charge, would otherwise be covered by the decision of this Court in charge, would otherwise be covered by the decision of this Court in Heraware.
7. Learned counsel for the petitioner has also drawn our attention to 7. Learned counsel for the petitioner has also drawn our attention to 7. Learned counsel for the petitioner has also drawn our attention to the decision of this Court in Kairos Properties Pvt. Ltd. v. Assistant the decision of this Court in Kairos Properties Pvt. Ltd. v. Assistant the decision of this Court in Kairos Properties Pvt. Ltd. v. Assistant Commissioner of Income Commissioner of Income-tax and Ors. 2 ("Kairos Properties'), where Ors. 2 ("Kairos Properties'), where the Court considered the effect of scheme as notified by the Central the Court considered the effect of scheme as notified by the Central the Court considered the effect of scheme as notified by the Central Government under the notification dated 29 March, 2022. The Court, Government under the notification dated 29 March, 2022. The Court, Government under the notification dated 29 March, 2022. The Court, considering the relevant provisions, has held that this scheme as considering the relevant provisions, has held that this scheme as considering the relevant provisions, has held that this scheme as notified in paragr notified in paragraph 3 of the notification would take within its ambit aph 3 of the notification would take within its ambit steps taken by the Revenue in issuing notice under section 148A(b) steps taken by the Revenue in issuing notice under section 148A(b) steps taken by the Revenue in issuing notice under section 148A(b) as also an order passed under Section 148A(d), so as to be included as also an order passed under Section 148A(d), so as to be included as also an order passed under Section 148A(d), so as to be included within the ambit of Section 151A of the Act. In this view of the within the ambit of Section 151A of the Act. In this view of the within the ambit of Section 151A of the Act. In this view of the matter, on both applicability of the law as laid down by this Court in tter, on both applicability of the law as laid down by this Court in tter, on both applicability of the law as laid down by this Court in Hexaware as also considering the observations of this Court in Kairos Hexaware as also considering the observations of this Court in Kairos Hexaware as also considering the observations of this Court in Kairos Properties, the petition would be required to be allowed. Properties, the petition would be required to be allowed.
In a decision rendered by us in the case of Abhin Anilku 8. In a decision rendered by us in the case of Abhin Anilku 8. In a decision rendered by us in the case of Abhin Anilkumar Shah v. Income Tax Officer, International Tax, Ward Circle 4(2) (1) & Ors. v. Income Tax Officer, International Tax, Ward Circle 4(2) (1) & Ors. v. Income Tax Officer, International Tax, Ward Circle 4(2) (1) & Ors. 3 ("Abhn Anilkumar Shah') in the context of the objections as raised 3 ("Abhn Anilkumar Shah') in the context of the objections as raised 3 ("Abhn Anilkumar Shah') in the context of the objections as raised on behalf of the revenue that the petitioner's case pertains to the on behalf of the revenue that the petitioner's case pertains to the on behalf of the revenue that the petitioner's case pertains to the central charges and hence impugned notic central charges and hence impugned notice issued under Section 148 e issued under Section 148 , 1546 1545, 1546 & 1549/Chny/2025 (AYs 2017 2017-18 to 2019-20) & & & 1612 /Chny/2025 (AYs 2017 (AYs 2017-18 & 2018-19) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt of the Act would stand excluded from the applicability of the of the Act would stand excluded from the applicability of the of the Act would stand excluded from the applicability of the provisions of Section 144B read with Section 151A of the Act and the provisions of Section 144B read with Section 151A of the Act and the provisions of Section 144B read with Section 151A of the Act and the Scheme as notified by the Central Government under the notification Scheme as notified by the Central Government under the notification Scheme as notified by the Central Government under the notification dated 29 March, 2022, we have dated 29 March, 2022, we have considered the issue of applicability considered the issue of applicability of the said provisions in respect of these exceptions sought to be of the said provisions in respect of these exceptions sought to be of the said provisions in respect of these exceptions sought to be urged by the revenue, namely, central charges and international tax urged by the revenue, namely, central charges and international tax urged by the revenue, namely, central charges and international tax charges. The Court in the said case made the following observations: charges. The Court in the said case made the following observations: charges. The Court in the said case made the following observations:-
"12. Having h "12. Having heard the learned counsel for the petitioner and Mr. eard the learned counsel for the petitioner and Mr. Mistry, the learned amicus, it is clear to us that although the Mistry, the learned amicus, it is clear to us that although the Mistry, the learned amicus, it is clear to us that although the objection of Ms. Goel at the first blush appeared to be attractive, objection of Ms. Goel at the first blush appeared to be attractive, objection of Ms. Goel at the first blush appeared to be attractive, when we first heard the matter on earlier occasion, however on a when we first heard the matter on earlier occasion, however on a when we first heard the matter on earlier occasion, however on a deeper scrutiny, such objection needs to fail. Ms Goel's contention scrutiny, such objection needs to fail. Ms Goel's contention scrutiny, such objection needs to fail. Ms Goel's contention that the category of cases as notified under order(s) dated 31 that the category of cases as notified under order(s) dated 31 that the category of cases as notified under order(s) dated 31 March, 2021 and 6 September, 2021 issued under section 119 of March, 2021 and 6 September, 2021 issued under section 119 of March, 2021 and 6 September, 2021 issued under section 119 of the Act providing for exclusion of cases assigned to the central and the Act providing for exclusion of cases assigned to the central and the Act providing for exclusion of cases assigned to the central and international charges from the applicability of Section 144B of the nternational charges from the applicability of Section 144B of the nternational charges from the applicability of Section 144B of the Act is concerned, certainly cannot be accepted to be the correct Act is concerned, certainly cannot be accepted to be the correct Act is concerned, certainly cannot be accepted to be the correct position in law. position in law.
13. Such contention of Ms Goel needs to fail for more than one 13. Such contention of Ms Goel needs to fail for more than one 13. Such contention of Ms Goel needs to fail for more than one reason. Firstly, the order dated 31 March, 2 reason. Firstly, the order dated 31 March, 2021 issued under sub 021 issued under sub- section (2) of Section 144B of I.T Act and order dated 6 section (2) of Section 144B of I.T Act and order dated 6 section (2) of Section 144B of I.T Act and order dated 6 September, 2021 issued under section 119 of the Act apply only in September, 2021 issued under section 119 of the Act apply only in September, 2021 issued under section 119 of the Act apply only in respect of "assessment orders to be passed, as clearly seen from respect of "assessment orders to be passed, as clearly seen from respect of "assessment orders to be passed, as clearly seen from the content of both such orders, which we have the content of both such orders, which we have the content of both such orders, which we have extracted hereinabove; Secondly, the scheme notified under section 151A hereinabove; Secondly, the scheme notified under section 151A hereinabove; Secondly, the scheme notified under section 151A under notification dated 29 March, 2022 applying the procedure of under notification dated 29 March, 2022 applying the procedure of under notification dated 29 March, 2022 applying the procedure of faceless mechanism to the proceedings under Section 148A and faceless mechanism to the proceedings under Section 148A and faceless mechanism to the proceedings under Section 148A and Section 148 is neither subject to the applicability of th Section 148 is neither subject to the applicability of th Section 148 is neither subject to the applicability of the prior order dated 31 March, 2021 read with 6 September, 2021 nor is it dated 31 March, 2021 read with 6 September, 2021 nor is it dated 31 March, 2021 read with 6 September, 2021 nor is it explicit so as to include the applicability of the said orders to the explicit so as to include the applicability of the said orders to the explicit so as to include the applicability of the said orders to the scheme as notified under section 151A; Thirdly, it would be doing scheme as notified under section 151A; Thirdly, it would be doing scheme as notified under section 151A; Thirdly, it would be doing violence to the language of the notification/sc violence to the language of the notification/scheme dated 29 heme dated 29 March, 2022 to read into such notification what has not been March, 2022 to read into such notification what has not been March, 2022 to read into such notification what has not been expressly provided for and/or something which is kept outside the expressly provided for and/or something which is kept outside the expressly provided for and/or something which is kept outside the purview of the said notification, namely, the orders dated 31 purview of the said notification, namely, the orders dated 31 purview of the said notification, namely, the orders dated 31 March, 2021 and 6 September, 2021. It would be uncall March, 2021 and 6 September, 2021. It would be uncall March, 2021 and 6 September, 2021. It would be uncalled for as also not appropriate for the Court to read into the scheme dated also not appropriate for the Court to read into the scheme dated also not appropriate for the Court to read into the scheme dated 29 March, 2022, something which is not included. It cannot be said 29 March, 2022, something which is not included. It cannot be said 29 March, 2022, something which is not included. It cannot be said that the Central Government was not aware as to what was that the Central Government was not aware as to what was that the Central Government was not aware as to what was provided for in the orders dated 31 March, 2021 and 6 Sep provided for in the orders dated 31 March, 2021 and 6 Sep provided for in the orders dated 31 March, 2021 and 6 September, 2021 so as to not include the same under the scheme dated 29 2021 so as to not include the same under the scheme dated 29 2021 so as to not include the same under the scheme dated 29 , 1546 1545, 1546 & 1549/Chny/2025 (AYs 2017 2017-18 to 2019-20) & & & 1612 /Chny/2025 (AYs 2017 (AYs 2017-18 & 2018-19) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 8 ::
March, 2022. It would thus be not correct, that the Court March, 2022. It would thus be not correct, that the Court March, 2022. It would thus be not correct, that the Court nonetheless reads into the scheme dated 29 March, 2022 the nonetheless reads into the scheme dated 29 March, 2022 the nonetheless reads into the scheme dated 29 March, 2022 the applicability of orders dated 31 March, 2021 and 6 September, applicability of orders dated 31 March, 2021 and 6 September, applicability of orders dated 31 March, 2021 and 6 September, 2021. In fact such approach would also be contrary to the fact such approach would also be contrary to the fact such approach would also be contrary to the mandate of Section 151A and to the scheme framed thereunder. mandate of Section 151A and to the scheme framed thereunder. mandate of Section 151A and to the scheme framed thereunder.
Thus, accepting Ms Goel's contention to read into the scheme 14. Thus, accepting Ms Goel's contention to read into the scheme 14. Thus, accepting Ms Goel's contention to read into the scheme as contained in the notification dated 29 March 2022, the as contained in the notification dated 29 March 2022, the as contained in the notification dated 29 March 2022, the applicability of the o applicability of the order dated 31 March, 2021 and 6 September, rder dated 31 March, 2021 and 6 September, 2021 would in fact amount to not only rewriting such scheme 2021 would in fact amount to not only rewriting such scheme 2021 would in fact amount to not only rewriting such scheme issued by the Central Government but reading something into the issued by the Central Government but reading something into the issued by the Central Government but reading something into the provisions of section 151A which the legislature itself has not provisions of section 151A which the legislature itself has not provisions of section 151A which the legislature itself has not provided for Section 151A provided for Section 151A and the Scheme notified below it stand and the Scheme notified below it stand independent under the notification dated 31 March 2022. Further, independent under the notification dated 31 March 2022. Further, independent under the notification dated 31 March 2022. Further, as rightly pointed out by Mr. Mistry, Section 151A is not subject to as rightly pointed out by Mr. Mistry, Section 151A is not subject to as rightly pointed out by Mr. Mistry, Section 151A is not subject to the other provisions of the Act when it empowers that the Central the other provisions of the Act when it empowers that the Central the other provisions of the Act when it empowers that the Central Government to ma Government to make a scheme in the context of section 147 or for ke a scheme in the context of section 147 or for issuance of notice under section 148A and for conducting a prior issuance of notice under section 148A and for conducting a prior issuance of notice under section 148A and for conducting a prior enquiry by issuance of a show enquiry by issuance of a show-cause notice or passing order under cause notice or passing order under section 148A of the Act. The provisions is intended with an object section 148A of the Act. The provisions is intended with an object section 148A of the Act. The provisions is intended with an object of achieving efficiency, transparency and accountability inter alia ing efficiency, transparency and accountability inter alia ing efficiency, transparency and accountability inter alia by eliminating the interface between the income tax authority, by eliminating the interface between the income tax authority, by eliminating the interface between the income tax authority, optimizing utilization of the resources through economies of scale optimizing utilization of the resources through economies of scale optimizing utilization of the resources through economies of scale and functional specialization, and by introducing a team based and functional specialization, and by introducing a team based and functional specialization, and by introducing a team based assessment, reassessment, recomputation or issuance or sanction ssment, reassessment, recomputation or issuance or sanction ssment, reassessment, recomputation or issuance or sanction of notice with dynamic jurisdiction, as set out in clauses (a), (b) of notice with dynamic jurisdiction, as set out in clauses (a), (b) of notice with dynamic jurisdiction, as set out in clauses (a), (b) and (c) of sub and (c) of sub-section 151A of the Act.
Thus, on a bare reading of section 151A as it stands, read with 15. Thus, on a bare reading of section 151A as it stands, read with 15. Thus, on a bare reading of section 151A as it stands, read with the scheme notified the scheme notified thereunder, we are of the clear opinion that thereunder, we are of the clear opinion that the observations as contained in Paragraphs 10 and 11 of our the observations as contained in Paragraphs 10 and 11 of our the observations as contained in Paragraphs 10 and 11 of our decision in CapitalG LP do not require any reconsideration decision in CapitalG LP do not require any reconsideration decision in CapitalG LP do not require any reconsideration
In the above context, Mr. Mistry has also drawn our attention 16. In the above context, Mr. Mistry has also drawn our attention 16. In the above context, Mr. Mistry has also drawn our attention to the decision of the Di to the decision of the Division Bench of the High Court of vision Bench of the High Court of Telangana in Sri Venkataramana Reddy Patloola v. Deputy Telangana in Sri Venkataramana Reddy Patloola v. Deputy Telangana in Sri Venkataramana Reddy Patloola v. Deputy Commissioner of Income Tax, Circle 1(1), Hyderabad & Ors. (2024 Commissioner of Income Tax, Circle 1(1), Hyderabad & Ors. (2024 Commissioner of Income Tax, Circle 1(1), Hyderabad & Ors. (2024 SCC OnLine TS 1792) to contend that such decision fortifies the SCC OnLine TS 1792) to contend that such decision fortifies the SCC OnLine TS 1792) to contend that such decision fortifies the view taken by us in CapitalG LP (supra view taken by us in CapitalG LP (supra) to submit that such ) to submit that such decision takes a similar view, when an identical issue had fallen for decision takes a similar view, when an identical issue had fallen for decision takes a similar view, when an identical issue had fallen for consideration of the Division Bench of the High Court of Telangana, consideration of the Division Bench of the High Court of Telangana, consideration of the Division Bench of the High Court of Telangana, namely, whether the show namely, whether the show-cause notice issued under section 148 cause notice issued under section 148 of the Act in matters relating to of the Act in matters relating to international taxation charges are international taxation charges are 1546 1545, 1546 & 1549/Chny/2025 (AYs 2017 2017-18 to 2019-20) & & & 1612 /Chny/2025 (AYs 2017 (AYs 2017-18 & 2018-19) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 9 ::
exempted to follow the procedure of faceless proceedings. In an exempted to follow the procedure of faceless proceedings. In an exempted to follow the procedure of faceless proceedings. In an elaborate judgment, their Lordships considering the provisions of elaborate judgment, their Lordships considering the provisions of elaborate judgment, their Lordships considering the provisions of section 151A as also the Notification dated 6 September, 2021 and section 151A as also the Notification dated 6 September, 2021 and section 151A as also the Notification dated 6 September, 2021 and the scheme notified by t the scheme notified by the Central Government under Notification he Central Government under Notification dated 29 March, 2022 have held that only the actual assessment dated 29 March, 2022 have held that only the actual assessment dated 29 March, 2022 have held that only the actual assessment or reassessment would be laid in a face to face mode while the or reassessment would be laid in a face to face mode while the or reassessment would be laid in a face to face mode while the selection of cases and issue of notices could be in the faceless selection of cases and issue of notices could be in the faceless selection of cases and issue of notices could be in the faceless mode.
The result of 18. The result of the above discussion is to the effect that this the above discussion is to the effect that this Court not only in Hexaware and thereafter in Capital GLP but also Court not only in Hexaware and thereafter in Capital GLP but also Court not only in Hexaware and thereafter in Capital GLP but also the Division Bench of the High Court of Telangana in Sri the Division Bench of the High Court of Telangana in Sri the Division Bench of the High Court of Telangana in Sri Venkataramana Reddy Patloola (supra), to have consistently held Venkataramana Reddy Patloola (supra), to have consistently held Venkataramana Reddy Patloola (supra), to have consistently held that in respect of ce that in respect of central charges and international taxation ntral charges and international taxation charges, the proceedings under Section 148A read with Section charges, the proceedings under Section 148A read with Section charges, the proceedings under Section 148A read with Section 148 of the Act would be required to be held in a faceless manner, 148 of the Act would be required to be held in a faceless manner, 148 of the Act would be required to be held in a faceless manner, applying the provisions of section 144B and as effected under the applying the provisions of section 144B and as effected under the applying the provisions of section 144B and as effected under the provisions of section provisions of section 151A read with scheme notified by the 151A read with scheme notified by the Central Government vide a Notification dated 29 March, 2022. We Central Government vide a Notification dated 29 March, 2022. We Central Government vide a Notification dated 29 March, 2022. We accordingly reject the contentions as urged by the revenue that accordingly reject the contentions as urged by the revenue that accordingly reject the contentions as urged by the revenue that the present case would fall outside the applicability of the said the present case would fall outside the applicability of the said the present case would fall outside the applicability of the said provisions and the sche provisions and the scheme. "
9. In this view of the matter, learned counsel has urged on behalf of 9. In this view of the matter, learned counsel has urged on behalf of 9. In this view of the matter, learned counsel has urged on behalf of the revenue that as the present case pertains to the central charges, the revenue that as the present case pertains to the central charges, the revenue that as the present case pertains to the central charges, it would be required to be excluded, cannot be accepted and it would it would be required to be excluded, cannot be accepted and it would it would be required to be excluded, cannot be accepted and it would be required to be rejected. The writ peti be required to be rejected. The writ petition is accordingly allowed in tion is accordingly allowed in terms of prayer clause (a) which reads thus "(a) that this Hon'ble terms of prayer clause (a) which reads thus "(a) that this Hon'ble terms of prayer clause (a) which reads thus "(a) that this Hon'ble Court be pleased to issue a Writ of Certiorari or a writ in the nature of Court be pleased to issue a Writ of Certiorari or a writ in the nature of Court be pleased to issue a Writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order or direction under Certiorari or any other appropriate writ, order or direction under Certiorari or any other appropriate writ, order or direction under Article 226 and/o Article 226 and/or Article 227 of the Constitution of India calling for r Article 227 of the Constitution of India calling for the records of the Petitioner's case and after examining the legality the records of the Petitioner's case and after examining the legality the records of the Petitioner's case and after examining the legality and validity thereof quash and set aside the Impugned Show Cause and validity thereof quash and set aside the Impugned Show Cause and validity thereof quash and set aside the Impugned Show Cause Notice dated 26 February 2024 (Echibit 'Q') the Impugned Order Notice dated 26 February 2024 (Echibit 'Q') the Impugned Order Notice dated 26 February 2024 (Echibit 'Q') the Impugned Order dated 30 March 2024 (Exhibit "U"), Impugned Notice dated 30 March ed 30 March 2024 (Exhibit "U"), Impugned Notice dated 30 March ed 30 March 2024 (Exhibit "U"), Impugned Notice dated 30 March 2024 (Echibit "V") and the Impugned Approval (Exhibit "W")." 2024 (Echibit "V") and the Impugned Approval (Exhibit "W")." 2024 (Echibit "V") and the Impugned Approval (Exhibit "W")."
6. In the light of the judgment of Hon'ble High Court supra, according to 6. In the light of the judgment of Hon'ble High Court supra, according to 6. In the light of the judgment of Hon'ble High Court supra, according to Ld AR, nothing turns on the fact that the present case/ass Ld AR, nothing turns on the fact that the present case/ass Ld AR, nothing turns on the fact that the present case/assessment, pertained to central charge and therefore excluded from the scheme pertained to central charge and therefore excluded from the scheme pertained to central charge and therefore excluded from the scheme notified by CBDT on 29.03.2022 [supra]. Hence, prayed for allowing the notified by CBDT on 29.03.2022 [supra]. Hence, prayed for allowing the notified by CBDT on 29.03.2022 [supra]. Hence, prayed for allowing the legal issue raised before us against notice issued on 07.04.2022 by JAO legal issue raised before us against notice issued on 07.04.2022 by JAO legal issue raised before us against notice issued on 07.04.2022 by JAO u/s 148 of the Act. u/s 148 of the Act.
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We have heard 7. We have heard both the parties and perused the material available on both the parties and perused the material available on record. The assessee is an individual, whose case was reopened by the record. The assessee is an individual, whose case was reopened by the record. The assessee is an individual, whose case was reopened by the Jurisdictional Assessing Officer (hereinafter referred to as 'JAO') u/s.147 Jurisdictional Assessing Officer (hereinafter referred to as 'JAO') u/s.147 Jurisdictional Assessing Officer (hereinafter referred to as 'JAO') u/s.147 of the Act on the basis of information that during the of the Act on the basis of information that during the relevant AY 2018 relevant AY 2018- 19, the assessee [Shri Jayaraman Rudrasekar] had deposited cash of 19, the assessee [Shri Jayaraman Rudrasekar] had deposited cash of 19, the assessee [Shri Jayaraman Rudrasekar] had deposited cash of ₹13,04,000/- in one or more savings bank account. Thereafter, the in one or more savings bank account. Thereafter, the in one or more savings bank account. Thereafter, the assessment was reopened by the AO by issuance of notice u/s.148 of assessment was reopened by the AO by issuance of notice u/s.148 of assessment was reopened by the AO by issuance of notice u/s.148 of the Act dated 07.04.2022. In response the Act dated 07.04.2022. In response of which, the assessee filed RoI of which, the assessee filed RoI 19 on 22.04.2022 declaring total income of ₹13,40,500/- for AY 2018-19 on 22.04.2022 declaring total income of 19 on 22.04.2022 declaring total income of [the original return filed by the assessee on 27.10.2018 declaring total [the original return filed by the assessee on 27.10.2018 declaring total [the original return filed by the assessee on 27.10.2018 declaring total income of ₹13,40,500/ 13,40,500/-]. And thereafter, the AO is noted to have passed ]. And thereafter, the AO is noted to have passed the reassessment order on 29.03.2023 making an addition of ssment order on 29.03.2023 making an addition of ssment order on 29.03.2023 making an addition of ₹9,23,500/-. Thus, assessed income to the tune of . Thus, assessed income to the tune of ₹22,64,000/ 22,64,000/- in place of the returned income of ₹13,40,500/- On appeal, the Ld.CIT(A) was of the returned income of On appeal, the Ld.CIT(A) was pleased to partly allow the appeal by allowing relief of ₹2 lakhs a pleased to partly allow the appeal by allowing relief of 2 lakhs and the balance addition was confirmed. balance addition was confirmed.
8. Aggrieved, the assessee is before us and has raised the legal issue 8. Aggrieved, the assessee is before us and has raised the legal issue 8. Aggrieved, the assessee is before us and has raised the legal issue impugning the notice issued by the JAO dated 07.04.2022 passed impugning the notice issued by the JAO dated 07.04.2022 passed impugning the notice issued by the JAO dated 07.04.2022 passed u/s.148 of the Act as bad in law on the strength of Hon'ble Jurisdictional u/s.148 of the Act as bad in law on the strength of Hon'ble Jurisdictional u/s.148 of the Act as bad in law on the strength of Hon'ble Jurisdictional High Court and other judicial precedents cited supra; and in this regard rt and other judicial precedents cited supra; and in this regard rt and other judicial precedents cited supra; and in this regard it is noted that the impugned notice u/s 148 dated 07.04.2022 was it is noted that the impugned notice u/s 148 dated 07.04.2022 was it is noted that the impugned notice u/s 148 dated 07.04.2022 was issued by JAO/Shri Ajay Kumar Chowdary, Ward issued by JAO/Shri Ajay Kumar Chowdary, Ward-3, Vellore. And 3, Vellore. And thereafter, the AO/DCIT, Central Circle thereafter, the AO/DCIT, Central Circle-1(4), Chennai, Shri Saty 1(4), Chennai, Shri Satyamurthi Subramanian, is noted to have framed the re Subramanian, is noted to have framed the re-assessment order on assessment order on 29.03.2023 after making certain additions. 29.03.2023 after making certain additions.
9. The assessee's contention is that jurisdictional notice issued by the 9. The assessee's contention is that jurisdictional notice issued by the 9. The assessee's contention is that jurisdictional notice issued by the JAO u/s 148 after 29.03.2022 in order to reopen the assessment is ba JAO u/s 148 after 29.03.2022 in order to reopen the assessment is ba JAO u/s 148 after 29.03.2022 in order to reopen the assessment is bad in law since he didn't adhere to the provisions of Section 151 of the Act in law since he didn't adhere to the provisions of Section 151 of the Act in law since he didn't adhere to the provisions of Section 151 of the Act and the scheme notified by the CBDT [Faceless Scheme notified from and the scheme notified by the CBDT [Faceless Scheme notified from and the scheme notified by the CBDT [Faceless Scheme notified from 29.03.2022 (supra)] which legal issue, which we will deal first. 29.03.2022 (supra)] which legal issue, which we will deal first. 29.03.2022 (supra)] which legal issue, which we will deal first.
10. We note that on this legal issue there are d 10. We note that on this legal issue there are divergent views expressed ivergent views expressed by different Hon'ble High Courts. However, it is noted that on this issue by different Hon'ble High Courts. However, it is noted that on this issue by different Hon'ble High Courts. However, it is noted that on this issue the Hon'ble jurisdictional High Court i.e. Madras High Court (Division the Hon'ble jurisdictional High Court i.e. Madras High Court (Division the Hon'ble jurisdictional High Court i.e. Madras High Court (Division Bench) in Mark Studio India (P.) Ltd. (supra) has expressed their view in Bench) in Mark Studio India (P.) Ltd. (supra) has expressed their view in Bench) in Mark Studio India (P.) Ltd. (supra) has expressed their view in favour of the assessee, by concurring with the Hon'ble Bombay High e assessee, by concurring with the Hon'ble Bombay High e assessee, by concurring with the Hon'ble Bombay High Court in the case of Hexaware Technologies (supra). And further it is Court in the case of Hexaware Technologies (supra). And further it is Court in the case of Hexaware Technologies (supra). And further it is noted that similar view in favour of assessee has been taken by Hon'ble noted that similar view in favour of assessee has been taken by Hon'ble noted that similar view in favour of assessee has been taken by Hon'ble Gujarat High Court, the Hon'ble Telangana High Court and th Gujarat High Court, the Hon'ble Telangana High Court and th Gujarat High Court, the Hon'ble Telangana High Court and the Hon'ble Punjab & Haryana High Court as cited by Ld AR (supra). Even though, Punjab & Haryana High Court as cited by Ld AR (supra). Even though, Punjab & Haryana High Court as cited by Ld AR (supra). Even though, the Ld.DR has brought to our notice that on the legal issue, the Hon'ble the Ld.DR has brought to our notice that on the legal issue, the Hon'ble the Ld.DR has brought to our notice that on the legal issue, the Hon'ble , 1546 1545, 1546 & 1549/Chny/2025 (AYs 2017 2017-18 to 2019-20) & & & 1612 /Chny/2025 (AYs 2017 (AYs 2017-18 & 2018-19) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 11 ::
Delhi High Court & Hon'ble Calcutta High Court and Hon'ble Single Bench Delhi High Court & Hon'ble Calcutta High Court and Hon'ble Single Bench Delhi High Court & Hon'ble Calcutta High Court and Hon'ble Single Bench of Madras High Court in Mark Stud of Madras High Court in Mark Studio India (P.) supra has held in favour io India (P.) supra has held in favour of the Revenue; but since the Hon'ble jurisdictional High Court (Division of the Revenue; but since the Hon'ble jurisdictional High Court (Division of the Revenue; but since the Hon'ble jurisdictional High Court (Division Bench) in Mark Studio India (P.) (supra) has reversed the Hon'ble Single Bench) in Mark Studio India (P.) (supra) has reversed the Hon'ble Single Bench) in Mark Studio India (P.) (supra) has reversed the Hon'ble Single Bench and has taken view in favour of assessee as held in Hexaware Bench and has taken view in favour of assessee as held in Hexaware Bench and has taken view in favour of assessee as held in Hexaware Technologies Ltd. (Bom), according to us, the legal issue raised by the hnologies Ltd. (Bom), according to us, the legal issue raised by the hnologies Ltd. (Bom), according to us, the legal issue raised by the assessee is no longer res assessee is no longer res-integra and we are bound to follow the integra and we are bound to follow the decision in favour of the assessee on the legal issue raised before us. decision in favour of the assessee on the legal issue raised before us. decision in favour of the assessee on the legal issue raised before us.
The Hon'ble Bombay High Court in the case of H 11. The Hon'ble Bombay High Court in the case of H 11. The Hon'ble Bombay High Court in the case of Hexaware Technologies Ltd., (supra) is noted to have has even dealt with the Technologies Ltd., (supra) is noted to have has even dealt with the Technologies Ltd., (supra) is noted to have has even dealt with the decision rendered by the Hon'ble Calcutta High Court in favour of the decision rendered by the Hon'ble Calcutta High Court in favour of the decision rendered by the Hon'ble Calcutta High Court in favour of the Revenue, but concurred with the view of the Hon'ble Telangana High Revenue, but concurred with the view of the Hon'ble Telangana High Revenue, but concurred with the view of the Hon'ble Telangana High Court in the case of Sri Venkataramana Redd Court in the case of Sri Venkataramana Reddy Patloola v. DCIT reported y Patloola v. DCIT reported in [2023] 156 taxmann.com 178 (Telangana) and held that in view of in [2023] 156 taxmann.com 178 (Telangana) and held that in view of in [2023] 156 taxmann.com 178 (Telangana) and held that in view of the provisions of Sec.151A of the Act read with Faceless Scheme dated the provisions of Sec.151A of the Act read with Faceless Scheme dated the provisions of Sec.151A of the Act read with Faceless Scheme dated 29.03.2022, notices issued by the JAO u/s.148A(d)/148 of the Act was 29.03.2022, notices issued by the JAO u/s.148A(d)/148 of the Act was 29.03.2022, notices issued by the JAO u/s.148A(d)/148 of the Act was invalid and bad in law invalid and bad in law. We further note that aforesaid decision of the . We further note that aforesaid decision of the Hon'ble Telangana High Court has been followed not only by the Hon'ble Hon'ble Telangana High Court has been followed not only by the Hon'ble Hon'ble Telangana High Court has been followed not only by the Hon'ble Bombay High Court, but also by the Hon'ble Gauhati High Court in the Bombay High Court, but also by the Hon'ble Gauhati High Court in the Bombay High Court, but also by the Hon'ble Gauhati High Court in the case of Ram Narayan Sah v. Union of India reported in 163 case of Ram Narayan Sah v. Union of India reported in 163 case of Ram Narayan Sah v. Union of India reported in 163 taxmann.com 478, and the Hon'ble Punjab & Haryana High Court in the om 478, and the Hon'ble Punjab & Haryana High Court in the om 478, and the Hon'ble Punjab & Haryana High Court in the case of Jatinder Singh Bhangu v. Union of India reported in 165 case of Jatinder Singh Bhangu v. Union of India reported in 165 case of Jatinder Singh Bhangu v. Union of India reported in 165 taxmann.com 115 and other cited cases (supra). And as noted (supra) taxmann.com 115 and other cited cases (supra). And as noted (supra) taxmann.com 115 and other cited cases (supra). And as noted (supra) the Hon'ble jurisdictional High Court (Single Bench) order in the the Hon'ble jurisdictional High Court (Single Bench) order in the the Hon'ble jurisdictional High Court (Single Bench) order in the case of Mark Studio India (P.) Ltd. v. Income Mark Studio India (P.) Ltd. v. Income-tax Officer, held in favour of tax Officer, held in favour of Revenue, was reversed by the Hon'ble Division Bench by order dated Revenue, was reversed by the Hon'ble Division Bench by order dated Revenue, was reversed by the Hon'ble Division Bench by order dated 24.06.2025 by holding as under: 24.06.2025 by holding as under:
“This appeal impugn This appeal impugns an order passed by the learned Single Judge. an order passed by the learned Single Judge.
The learned Single Judge was pleased to dismiss the petition on d Single Judge was pleased to dismiss the petition on d Single Judge was pleased to dismiss the petition on the ground that even if the notice has been issued by Jurisdictional the ground that even if the notice has been issued by Jurisdictional the ground that even if the notice has been issued by Jurisdictional Assessment Officer and not Faceless Assessment Officer, the notice Assessment Officer and not Faceless Assessment Officer, the notice Assessment Officer and not Faceless Assessment Officer, the notice issued under Section 148A/148 of the Income Tax Act will be valid. issued under Section 148A/148 of the Income Tax Act will be valid. issued under Section 148A/148 of the Income Tax Act will be valid.
3. Ms.Vardhini Karthik submitted that this Court has, in many 3. Ms.Vardhini Karthik submitted that this Court has, in many 3. Ms.Vardhini Karthik submitted that this Court has, in many matters, held, following the judgment of the Bombay High Court in matters, held, following the judgment of the Bombay High Court in matters, held, following the judgment of the Bombay High Court in Hexaware Technologies Limited v. Assistant Commissioner of Income Hexaware Technologies Limited v. Assistant Commissioner of Income Hexaware Technologies Limited v. Assistant Commissioner of Income Tax', that notice that has to be issued by Faceless Assessmen Tax', that notice that has to be issued by Faceless Assessmen Tax', that notice that has to be issued by Faceless Assessment Officer has to be issued Faceless Assessment Office and if issued by has to be issued Faceless Assessment Office and if issued by has to be issued Faceless Assessment Office and if issued by Jurisdictional Assessment Officer, the same is not valid. Jurisdictional Assessment Officer, the same is not valid.
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4. Ms.Premalatha, who takes notice for the Revenue, states that the 4. Ms.Premalatha, who takes notice for the Revenue, states that the 4. Ms.Premalatha, who takes notice for the Revenue, states that the law as proposed by Ms.Vardini Karthick is correct and there law as proposed by Ms.Vardini Karthick is correct and there law as proposed by Ms.Vardini Karthick is correct and therefore, the Court may quash and set aside the notices, but keep open liberty of Court may quash and set aside the notices, but keep open liberty of Court may quash and set aside the notices, but keep open liberty of the Revenue to re the Revenue to re-ignite the notices in case the Apex Court interferes ignite the notices in case the Apex Court interferes with the order and judgment of the Bombay High Court in Hexaware with the order and judgment of the Bombay High Court in Hexaware with the order and judgment of the Bombay High Court in Hexaware Technologies (supra). Technologies (supra).
5. Keeping open the 5. Keeping open the Revenue's rights and contentions, as noted Revenue's rights and contentions, as noted above, the impugned notices dated 15.04.2024 are quashed and set above, the impugned notices dated 15.04.2024 are quashed and set above, the impugned notices dated 15.04.2024 are quashed and set aside. The appeal is disposed of. There shall be no order as to costs. aside. The appeal is disposed of. There shall be no order as to costs. aside. The appeal is disposed of. There shall be no order as to costs. Consequently, the interim application is closed. Consequently, the interim application is closed.”
In the light of the afo 12. In the light of the aforesaid discussion, we find that in the case in resaid discussion, we find that in the case in hand, the JAO had issued notice u/s.148A(b) of the Act dated hand, the JAO had issued notice u/s.148A(b) of the Act dated hand, the JAO had issued notice u/s.148A(b) of the Act dated 24.03.2022 followed by order u/s.148A(d) of the Act dated 31.03.2022 24.03.2022 followed by order u/s.148A(d) of the Act dated 31.03.2022 24.03.2022 followed by order u/s.148A(d) of the Act dated 31.03.2022 and followed by notice u/s.148 dated 07.04.2022 which impugned and followed by notice u/s.148 dated 07.04.2022 which impugned and followed by notice u/s.148 dated 07.04.2022 which impugned notices have bee notices have been issued despite faceless scheme was notified by n issued despite faceless scheme was notified by Central Government on 29.03.2022 pursuant to section 151A of the Act, Central Government on 29.03.2022 pursuant to section 151A of the Act, Central Government on 29.03.2022 pursuant to section 151A of the Act, making it mandatory for the issuance of notice u/s.148A(b), 148A(d) as making it mandatory for the issuance of notice u/s.148A(b), 148A(d) as making it mandatory for the issuance of notice u/s.148A(b), 148A(d) as well as 148 of the Act by the Faceless Mechanism, the impugned not well as 148 of the Act by the Faceless Mechanism, the impugned not well as 148 of the Act by the Faceless Mechanism, the impugned notices especially issued u/s.148 dated 31.03.2022 is found to be invalid and especially issued u/s.148 dated 31.03.2022 is found to be invalid and especially issued u/s.148 dated 31.03.2022 is found to be invalid and bad in law, since it has been issued contrary to law and is against the bad in law, since it has been issued contrary to law and is against the bad in law, since it has been issued contrary to law and is against the 'Rule of Law'; which impugned action of the JAO vitiates the reopening 'Rule of Law'; which impugned action of the JAO vitiates the reopening 'Rule of Law'; which impugned action of the JAO vitiates the reopening of assessment for AY 2018 of assessment for AY 2018-19 by issuance of impugned notice dated ce of impugned notice dated 07.04.2022 u/s.148 of the Act and is therefore held to be illegal and bad 07.04.2022 u/s.148 of the Act and is therefore held to be illegal and bad 07.04.2022 u/s.148 of the Act and is therefore held to be illegal and bad in law and therefore, assessment order dated 29.03.2023 is held to be in law and therefore, assessment order dated 29.03.2023 is held to be in law and therefore, assessment order dated 29.03.2023 is held to be null in eyes of law; and the assessee succeeds, on the legal issue which null in eyes of law; and the assessee succeeds, on the legal issue which null in eyes of law; and the assessee succeeds, on the legal issue which is held in favour of the assessee and therefore, we are inclined not to go favour of the assessee and therefore, we are inclined not to go favour of the assessee and therefore, we are inclined not to go into the merits of the addition made by the NFAC. into the merits of the addition made by the NFAC.
Before parting, we note that in this case, the Ld.DR has pointed out 13. Before parting, we note that in this case, the Ld.DR has pointed out 13. Before parting, we note that in this case, the Ld.DR has pointed out that the present case pertains to the central charges and therefore, that the present case pertains to the central charges and therefore, that the present case pertains to the central charges and therefore, it would stand covered by the order dated 31.03.2021 passed u/s.144B(2) would stand covered by the order dated 31.03.2021 passed u/s.144B(2) would stand covered by the order dated 31.03.2021 passed u/s.144B(2) r.w.s.119 of the Act and further by order dated 06.09.2021 passed r.w.s.119 of the Act and further by order dated 06.09.2021 passed r.w.s.119 of the Act and further by order dated 06.09.2021 passed under these sections. Consequently, according to the Ld.DR, this case under these sections. Consequently, according to the Ld.DR, this case under these sections. Consequently, according to the Ld.DR, this case would fall outside the purview of the scheme mad would fall outside the purview of the scheme made u/s.151A of the Act e u/s.151A of the Act and therefore, it won't be covered by the decision of the Hon'ble and therefore, it won't be covered by the decision of the Hon'ble and therefore, it won't be covered by the decision of the Hon'ble Bombay High Court in the case of Hexaware Technologies Ltd. However, Bombay High Court in the case of Hexaware Technologies Ltd. However, Bombay High Court in the case of Hexaware Technologies Ltd. However, we note that such a contention was raised by the Revenue before the we note that such a contention was raised by the Revenue before the we note that such a contention was raised by the Revenue before the Hon'ble High Court of Bombay in Hon'ble High Court of Bombay in the case of BMC Software India (P) the case of BMC Software India (P) Ltd.(supra), wherein their Lordship's after considering the decisions Ltd.(supra), wherein their Lordship's after considering the decisions Ltd.(supra), wherein their Lordship's after considering the decisions rendered in (i) Abhin Anilkumar Shah v. ITO, International Tax Ward, rendered in (i) Abhin Anilkumar Shah v. ITO, International Tax Ward, rendered in (i) Abhin Anilkumar Shah v. ITO, International Tax Ward, Circle-4(2)(1) & Ors., & (ii) Venkataramana Reddy Patloola v. DCIT, 4(2)(1) & Ors., & (ii) Venkataramana Reddy Patloola v. DCIT, 4(2)(1) & Ors., & (ii) Venkataramana Reddy Patloola v. DCIT, , 1546 1545, 1546 & 1549/Chny/2025 (AYs 2017 2017-18 to 2019-20) & & & 1612 /Chny/2025 (AYs 2017 (AYs 2017-18 & 2018-19) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 13 ::
Circle-1(1), Hyderabad & Ors. [2024 SCC OnLine TS 1792] was pleased Hyderabad & Ors. [2024 SCC OnLine TS 1792] was pleased Hyderabad & Ors. [2024 SCC OnLine TS 1792] was pleased to repel the same by inter alia observing at para 9 ".............that the to repel the same by inter alia observing at para 9 ".............that the to repel the same by inter alia observing at para 9 ".............that the Revenue's contention that as the present case pertains to the central Revenue's contention that as the present case pertains to the central Revenue's contention that as the present case pertains to the central charges, it would be required to be excluded, cannot be charges, it would be required to be excluded, cannot be accepted and it accepted and it would be required to be rejected. The writ petition is accordingly would be required to be rejected. The writ petition is accordingly would be required to be rejected. The writ petition is accordingly allowed....." In the light of the Hon'ble High Court's decision rendered in allowed....." In the light of the Hon'ble High Court's decision rendered in allowed....." In the light of the Hon'ble High Court's decision rendered in the case of BMC Software India (P) Ltd., we don't find any merit in the the case of BMC Software India (P) Ltd., we don't find any merit in the the case of BMC Software India (P) Ltd., we don't find any merit in the contention of the Ld.DR f contention of the Ld.DR for the Revenue the present case pertains to the or the Revenue the present case pertains to the central charges, it would be required to be excluded from the scheme central charges, it would be required to be excluded from the scheme central charges, it would be required to be excluded from the scheme notified by CBDT on 29.03.2022 (supra), cannot be accepted and notified by CBDT on 29.03.2022 (supra), cannot be accepted and notified by CBDT on 29.03.2022 (supra), cannot be accepted and therefore, the same is rejected. Hence, we hold that the impugned therefore, the same is rejected. Hence, we hold that the impugned therefore, the same is rejected. Hence, we hold that the impugned action of the JAO issuing notice u/s.148 of the Act on 07.04.2022 as bad the JAO issuing notice u/s.148 of the Act on 07.04.2022 as bad the JAO issuing notice u/s.148 of the Act on 07.04.2022 as bad in law and invalid, therefore, the consequent assessment order dated in law and invalid, therefore, the consequent assessment order dated in law and invalid, therefore, the consequent assessment order dated 29.03.2023 is null in the eyes of law and so, quashed.” 29.03.2023 is null in the eyes of law and so, quashed.”
6. We find that the view expressed by the coordinate Bench (supra) We find that the view expressed by the coordinate Bench (supra) We find that the view expressed by the coordinate Bench (supra) stands endorsed by the Division Bench of the Hon’ble jurisdictional High tands endorsed by the Division Bench of the Hon’ble jurisdictional High tands endorsed by the Division Bench of the Hon’ble jurisdictional High Court in their decision rendered in the case of Court in their decision rendered in the case of Dadha Pharma LLP vs Dadha Pharma LLP vs DCIT, CC (supra) wherein wherein it is seen that the notice issued u/s 148 by it is seen that the notice issued u/s 148 by the JAO of the Central Charge was set aside by the JAO of the Central Charge was set aside by holding that it was holding that it was mandatory that FAO to issue the concerned notice(s). The relevant mandatory that FAO to issue the concerned notice(s). The relevant mandatory that FAO to issue the concerned notice(s). The relevant portion of the judgment reads as under: portion of the judgment reads as under:-
“2. Learned Single Judge in order dated 20.12.2024 in WP Nos.25223 of 2024 “2. Learned Single Judge in order dated 20.12.2024 in WP Nos.25223 of 2024 “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 As held that it does not matter if the Jurisdictional Assessing Officer (JAO) issues sessing Officer (JAO) issues the notice and it is not mandatory that it should be issued by the Faceless the notice and it is not mandatory that it should be issued by the Faceless 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 Assessment Officer (FAO). Another learned Single Judge in order dated 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 21.04.2025 in WP No.22402 of 2024 and batch cases, followed what was held by 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 Bombay High Court in Hexaware Technologies Ltd vs. Assistant Bombay High Court in Hexaware Technologies Ltd vs. Assistant Commissioner of Income Tax1 ; and opined that it was mandatory for the FAO Commissioner of Income Tax1 ; and opined that it was mandatory for the FAO Commissioner of Income Tax1 ; and opined that it was mandatory for the FAO to issue notice and issuance of notice by JAO would make the notice invalid. to issue notice and issuance of notice by JAO would make the notice invalid. to issue notice and issuance of notice by JAO would make the notice invalid.
Learned Single Judge thereafter directed 3. Learned Single Judge thereafter directed the matter to be placed before the the matter to be placed before the Chief Justice for constituting a Division Bench to consider the divergent views. It Chief Justice for constituting a Division Bench to consider the divergent views. It Chief Justice for constituting a Division Bench to consider the divergent views. It is therefore, this matter was listed before us today. is therefore, this matter was listed before us today.
, 1546 1545, 1546 & 1549/Chny/2025 (AYs 2017 2017-18 to 2019-20) & & & 1612 /Chny/2025 (AYs 2017 (AYs 2017-18 & 2018-19) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 14 ::
Learned Senior Counsel, Mr.Jayakumar, submits that the law as laid in BMC 4. Learned Senior Counsel, Mr.Jayakumar, submits that the law as laid in BMC 4. Learned Senior Counsel, Mr.Jayakumar, submits that the law as laid in BMC Software India (P) Ltd vs. Deputy Commissioner of Income Tax2 will apply. This are India (P) Ltd vs. Deputy Commissioner of Income Tax2 will apply. This are India (P) Ltd vs. Deputy Commissioner of Income Tax2 will apply. This judgment followed Hexaware Technologies Ltd (supra) and Kairos Properties (P) judgment followed Hexaware Technologies Ltd (supra) and Kairos Properties (P) judgment followed Hexaware Technologies Ltd (supra) and Kairos Properties (P) Ltd vs. Assistant CIT3. 1 [2024] 162 taxmann.com 225 (Bombay) 2 [2024] 167 Ltd vs. Assistant CIT3. 1 [2024] 162 taxmann.com 225 (Bombay) 2 [2024] 167 Ltd vs. Assistant CIT3. 1 [2024] 162 taxmann.com 225 (Bombay) 2 [2024] 167 taxmann.com 39 (Bombay) 3 [20 taxmann.com 39 (Bombay) 3 [2024] 165 taxmann.com 760 (Bombay) 24] 165 taxmann.com 760 (Bombay)
Mr.Srinivas states that Special Leave Petitions are pending against the 5. Mr.Srinivas states that Special Leave Petitions are pending against the 5. Mr.Srinivas states that Special Leave Petitions are pending against the judgment in BMC Software India (P) Ltd (supra), Hexaware Technologies Ltd judgment in BMC Software India (P) Ltd (supra), Hexaware Technologies Ltd judgment in BMC Software India (P) Ltd (supra), Hexaware Technologies Ltd (supra) as also Kairos Properties (P) Ltd (supra) and that the petitions (supra) as also Kairos Properties (P) Ltd (supra) and that the petitions (supra) as also Kairos Properties (P) Ltd (supra) and that the petitions are expected to be taken up after the Supreme Court reopens. expected to be taken up after the Supreme Court reopens.
We follow the law as laid down in Hexaware Technologies Ltd (supra), the 6. We follow the law as laid down in Hexaware Technologies Ltd (supra), the 6. 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 said judgment was authored by one of us (Chief Justice), that it is mandatory for said judgment was authored by one of us (Chief Justice), that it is mandatory for the FAO to issue the concerned notice the FAO to issue the concerned notices and issuance thereof by the JAO would s and issuance thereof by the JAO would make the notice invalid. make the notice invalid.
7. Admittedly, Mr.Srinivas, in fairness, states that there is no stay. Therefore, 7. Admittedly, Mr.Srinivas, in fairness, states that there is no stay. Therefore, 7. Admittedly, Mr.Srinivas, in fairness, states that there is no stay. Therefore, the law as laid down by Hexaware Technologies Ltd (supra) applies. the law as laid down by Hexaware Technologies Ltd (supra) applies. the law as laid down by Hexaware Technologies Ltd (supra) applies.
8. It is clarified that if the Apex Court 8. It is clarified that if the Apex Court reverses the judgment of Hexaware reverses the judgment of Hexaware Technologies Ltd (supra), parties will be governed by the decision of the Apex Technologies Ltd (supra), parties will be governed by the decision of the Apex Technologies Ltd (supra), parties will be governed by the decision of the Apex Court.”
7. It is seen that, the above judgment of the Hon’ble Madras High It is seen that, the above judgment of the Hon’ble Madras High It is seen that, the above judgment of the Hon’ble Madras High Court (supra) has been followed with approval by the Court (supra) has been followed with approval by the Hon'ble Hon'ble Karnataka High Court in the case of High Court in the case of Ramachandra Reddy Ravi Kumar Ramachandra Reddy Ravi Kumar v. DCIT (supra).
8. Respectfully following the above cited decisions (supra) particularly Respectfully following the above cited decisions (supra) particularly Respectfully following the above cited decisions (supra) particularly the judgment of Hon’ble Madras High Court (supra) which is binding upon the judgment of Hon’ble Madras High Court (supra) which is binding upon the judgment of Hon’ble Madras High Court (supra) which is binding upon us, we hold that the impugned action we hold that the impugned action of the JAO issuing notice of the JAO issuing notice(s) u/s.148 of the Act for AYs 2017 for AYs 2017-18 to 2019-20 as bad in law and invalid as bad in law and invalid. Hence, the notice(s) issued u/s 148 of the Act for 2017 the notice(s) issued u/s 148 of the Act for 2017-18 to 2019 18 to 2019-20 stands annulled and hence all the consequential proceedings from the stage of annulled and hence all the consequential proceedings from the stage of annulled and hence all the consequential proceedings from the stage of issuance of notice stands effaced. ce of notice stands effaced. , 1546 1545, 1546 & 1549/Chny/2025 (AYs 2017 2017-18 to 2019-20) & & & 1612 /Chny/2025 (AYs 2017 (AYs 2017-18 & 2018-19) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 15 ::
In view of our above findings, all other grounds raised by the In view of our above findings, all other grounds raised by the In view of our above findings, all other grounds raised by the assessee in their appeal along with the appeals filed by the Revenue have assessee in their appeal along with the appeals filed by the Revenue have assessee in their appeal along with the appeals filed by the Revenue have now become academic in nature and is therefore dismissed as now become academic in nature and is therefore dismissed as now become academic in nature and is therefore dismissed as infructuous. Needless to s infructuous. Needless to say, all other questions raised in the cross ay, all other questions raised in the cross appeals on the points of law and merits of the addition(s) raised are left appeals on the points of law and merits of the addition(s) raised are left appeals on the points of law and merits of the addition(s) raised are left open.
In the result, the the appeals filed by the assessee is allowed and the assessee is allowed and the appeals of the Revenue are dismissed. appeals of the Revenue are dismissed.
Order pronounced on the 21st day of November, 2025 Order pronounced on the 25, in Chennai.