PALLAVI DAS,CHENNAI vs. ITO, NON CORP. WARD 7(1) CHE, CHENNAI

Assessment Years: 2015-16\nPallavi Das,\nY Block, No.75, 6th Street,\nAnna Nagar,\nChennai-600 040.\n[PAN: BPBPP0358F]\n(अपीलार्थी/Appellant)\nअपीलार्थी की ओर से/ Assessee by\n:\n(प्रत्यर्थी/Respondent)\nMs.S.Sonali, Advocate\n:\nMs.R.Anitha, Addl.CIT\nप्रत्यर्थी की ओर से /Revenue by\nसुनवाई की तारीख/Date of Hearing\nघोषणा की तारीख /Date of Pronouncement\n:\n03.09.2025\n:\n13.11.2025\nआदेश / ORDER\nPER AMITABH SHUKLA, A.M :\nThis appeal is filed by the assessee against the order bearing DIN\n& Order No.ITBA / NFAC / S / 250 / 2024-25 / 1074567444(1) dated\n17.03.2025 of the Learned Commissioner of Income Tax [herein after\n“CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the\n assessment year 2015-16. The reference to the word “Act” in this order\nhereinafter shall mean the Income Tax Act, 1961 as amended from time\nto time.\n2.0 At the outset, the Ld.Counsel for the assessee invited our\nattention to the additional ground filed under Rule-11 of the ITAT rules.\nThe Ld. Counsel argued that it is assailing the order of Ld.CIT(A) both on\nlegal grounds as well as on the merits of the case. The Ld.Counsel\nsubmitted that as the additional ground which is a legal ground and\nstrikes at the very root of the reassessment order u/s.147 r.w.s.144B\ndated 07.04.2022, the same be adjudicated first. Upon consideration we\ndeem it appropriate to adjudicate the legal ground raised by the assessee\nthrough its additional ground first.\n3.0 Thus, through additional ground of appeal the assessee has\nchallenged the insufficiency of jurisdiction with the Ld.Jurisdictional\nAssessing Officer to have issued the notice u/s 148 which forms the basis\nfor the reassessment order u/s.147 r.w.s.144B dated 04.01.2024. It is\nthe case of the Ld.Counsel for the assessee that as per Section 151A of\nthe Act r.w. notification dated 29.03.2022 of Central Board of Direct\nTaxes, reassessment notice u/s 148 was to be issued by the faceless\nassessing officer and that issuance of the same by the jurisdictional\nassessing officer u/s 148 dated 07.04.2022 was unwarranted and not in\nconformity with statutory conditions governing the matter. It was urged\nthat consequent to notification dated 29th March 2022 issued by the\nCentral Board of Direct Taxes, reassessment u/s 148 can be issued by a\nfaceless assessing officer only. It was urged that in the present case as\nthe notice u/s 148 dated 07.04.2022 was issued by the jurisdictional\nassessing officer the same was invalid and consequently the assessment\norder u/s 147 r.w.s.144B dated 04.01.2024 also became an order to be\ndeemed as void ab initio. In support of its contentions, the Ld.Counsel for\nthe assessee placed heavy reliance upon the decision of the Hon'ble\nMadras High Court dated 24.06.2025 in the batch of writ petitions bearing\nno.22402 of 2024.\n4.0 Per contra, the Ld.DR relied upon the order of lower authorities.\nIt was argued that the decision of Hon'ble Bombay High Court in the case\nof Hexaware Technologies Limited which is the basis of impugned\ndecision of the Hon'ble Madras High Court dated 24.06.2025 (supra) has\nbeen contested by the Revenue before the Hon'ble Apex Court and\nhence no reliance can be placed.\n5.0 We have heard rival submissions in the light of material available\non records. It is an admitted fact on records that the notice u/s.148\ndated 07.04.2022, upon which the assessment order u/s 147 r.w.s.144B\ndated 04.01.2024 is resting, was issued by the jurisdictional assessing\nofficer and not the faceless assessing officer. We have noted the\nfollowing provisions of Section 151A of the Act:-\n\".....[Faceless assessment of income escaping assessment. 22\n151A. (1) The Central Government may make a scheme, by notification in the Official\nGazette, for the purposes of assessment, reassessment or re-computation\nunder Section 147 or issuance of notice under Section 148[or conducting of enquiries or\nissuance of show-cause notice or passing of order under Section 148A] or sanction for issue\nof such notice under Section 151, so as to impart greater efficiency, transparency and\naccountability by-\n(a) eliminating the interface between the income-tax authority and the assessee or any\nother person to the extent technologically feasible;\n(b) optimising utilisation of the resources through economies of scale and functional\nspecialisation;\n(c) introducing a team-based assessment, reassessment, re-computation or issuance or\nsanction of notice with dynamic jurisdiction.\n(2) The Central Government may, for the purpose of giving effect to the scheme made\nunder sub-section (1), by notification in the Official Gazette, direct that any of the\nprovisions of this Act shall not apply or shall apply with such exceptions, modifications\nand adaptations as may be specified in the notification:\nProvided that no direction shall be issued after the 31st day of March, 2022.\n(3) Every notification issued under sub-section (1) and sub-section (2) shall, as soon as\nmay be after the notification is issued, be laid before each House of Parliament.]....\"\nThe legal prescription thus mandated is that post issuance of notification\nby the central government, notices u/s.148 shall be issued by faceless\nassessing officers.\n6.0 We have noted that the Central Board of Direct Taxes has\npassed a notification dated 29.03.2022 stipulating as under:-\n.....NOTIFICATION\nNew Delhi, the 29th March, 2022\nS.O. 1466(E).—In exercise of the powers conferred by sub-sections (1) and (2) of Section 151A\nof the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following\nScheme, namely:-\n1. Short title and commencement.—(1) This Scheme may be called the e-Assessment of Income\nEscaping Assessment Scheme, 2022.\n(2) It shall come into force with effect from the date of its publication in the Official Gazette.\n2. Definitions.—(1) In this Scheme, unless the context otherwise requires,\n(a) -Act means the Income-tax Act, 1961 (43 of 1961);\n(b) -automated allocation|| means an algorithm for randomised allocation of cases, by using\nsuitable technological tools, including artificial intelligence and machine learning, with a view to\noptimise the use of resources.\n(2) Words and expressions used herein and not defined, but defined in the Act, shall have the\nmeaning respectively assigned to them in the Act.\n3. Scope of the Scheme.—For the purpose of this Scheme, —\n(a) assessment, reassessment or recomputation under Section 147 of the Act,\n(b) issuance of notice under Section 148 of the Act,\nshall be through automated allocation, in accordance with risk management strategy formulated by\nthe Board as referred to in Section 148 of the Act for issuance of notice, and in a faceless manner,\nto the extent provided in Section 144B of the Act with reference to making assessment or\nreassessment of total income or loss of assessee.\n[Notification No. 18/2022/F. No. 370142/16/2022-TPL(Part1]\nSHEFALI SINGH, Under Secy....\"\nThus through the above notification the Central Government has\nmandated that w.e.f. 29th March 2022 all the notices u/s 148 of\nthe Act shall be through automated allocation and in a faceless\nmanner for initiating any reassessment of income. It thus\nalludes that notice u/s 148 shall be issued by a faceless\nassessing officer.\n7.0 We have also noted the decision of Hon'ble Bombay High\nCourt in the case of Hexaware Technologies Limited dated\n03.05.2024 in WP No.1778 of 2023. The Hon'ble court's\ndecision was, inter alia, based on the newly introduced faceless\nassessment scheme, established under Section 151A of the Act\nwhich mandated that reassessment notices be issued through\nautomated allocation and in a faceless manner, thereby\neliminating direct interaction between the taxpayer and the tax\nauthorities. The court interpreted this to mean that the authority to\nissue reassessment notices under the faceless assessment\nscheme rests solely with the FAO, not the JAO. The Hon'ble\nBombay High Court held the view that allowing concurrent\njurisdiction would lead to chaos and undermine the purpose of the\nfaceless assessment scheme. It clarified that the scheme's\nautomated allocation process randomly assigns cases to\nassessing officers, and in this case, the JAO was not the\ndesignated officer. Therefore, the reassessment notice issued by\nthe JAO was deemed invalid and quashed. The Revenue had\nargued that both the Jurisdictional Assessing Officer (JAO) and\nthe Faceless Assessing Officer (FAO) had concurrent jurisdiction\nin issuing such notices. However, the Hon'ble Bombay High Court\ndisagreed, ruling that the JAO lacked the authority to issue the\nreassessment notice in this specific instance. While doing so the\nHon'ble High Court had distinguished the order of the Hon'ble\nCalcutta High Court.\n8.0 We have also noted with reverence the decision of Hon'ble\nMadras High Court dated 24.06.2025 in WP No.22402. In the\nimpugned decision the Hon'ble High Court has held as under:-\n\".....