SANZYME PRIVATE LIMITED,HYDERABAD vs. DCIT., CIRCLE-3(1), HYDERABAD

We have carefully considered the submissions of both parties and perused the material placed on record. On perusal of Page 2 of 29 the medical certificate and the affidavit filed by the assessee, we are satisfied that the assessee was prevented by reasonable and sufficient cause from filing the appeal within the prescribed period of limitation. In the absence of any mala fide intention or deliberate inaction and keeping in view the principles laid down by the Hon’ble Supreme Court that substantial justice should prevail over technical considerations, we are inclined to condone the delay of 21 days. Accordingly, the delay in filing the appeal is hereby condoned, and the appeal is admitted for adjudication on merits.

6. The brief facts of the case are that the assessee had filed an appeal before the Ld. CIT(A) against the order of the Learned Assessing Officer (“Ld. AO”) passed for Assessment Year 2015-16 under Section 147 r.w.s. 144 of the Income Tax Act, 1961(“the Act”), dated 22.02.2024. The Ld. CIT(A) dismissed the appeal of the assessee.

7. Aggrieved by the order of the Ld. CIT(A), the assessee is in further appeal before this Tribunal. At the outset, we observe that under ground no. 2, the assessee has raised a legal ground challenging the validity of the notice issued under section 148 and the order passed under section 148A(d) of the Act. In this regard, the Ld. AR submitted that the notice issued under section 148 as well as the order passed under section 148A(d) of the Act were by the Jurisdictional Assessing Officer (“JAO”) instead of the Faceless Assessing Officer (“FAO”), which is contrary to the scheme of faceless reassessment introduced by the CBDT. The Ld. AR invited our attention to the order under section 148A(d) of the Act, dated 15.04.2022 and the notice issued under section 148 of the Act on the same date. He demonstrated that both documents clearly bear the name and designation of the JAO. It was submitted that the CBDT Notification No. 18/2022 dated 29.03.2022, issued under section 151A(1) and (2) of the Act, mandates that with effect from 29.03.2022, all notices under section 148 of the Act must be issued through the Faceless Assessment Unit. Relying on the order of the Hon’ble jurisdictional High Court of Telangana in the case of Kankanala Ravindra Reddy Vs. ITO & 2 Others, Writ Petition Nos 25903 of 2023, dated 14.09.2023, the Ld. AR argued that when a notice is issued by an authority having no jurisdiction Page 4 of 29 in law, such notice is void ab initio, and all consequential proceedings stand vitiated. He therefore submitted that the notice issued under section 148 of the Act and the consequent assessment order passed under section 147 read with section 144 of the Act are bad in law and liable to be quashed.

8. Per contra, the Ld. DR submitted that since the assessee had failed to challenge the jurisdiction of the JAO within the period prescribed under sub-section (3) of Section 124 of the Act, i.e., within one month from the date of service of the notice, he is now barred from raising such an objection for the first time before the Tribunal. The Ld. DR, in support of his contention, placed reliance on the judgment of the Hon’ble Supreme Court in DCIT vs. Kalinga Institute of Industrial Technology 454 ITR 582. It was submitted that the Hon’ble Apex Court, in the said decision, has categorically held that, in view of the mandate of Section 124(3) of the Act, an assessee is precluded from assailing the jurisdiction of the Ld. AO if such objection is not raised within 30 days from the receipt of notice. The Ld. DR thus contended that, in the present case, the assessee had failed to call in question the jurisdiction of the JAO, who had issued the notice under Section 148 of the Act within the stipulated period, and therefore, he cannot be permitted to raise such an objection for the first time before the Tribunal.

17. Having given a thoughtful consideration to the aforesaid claim of the ld. DR in the backdrop of the mandate of Sub-section (3) of Section 124 of the Act, we are unable to fathom that as to how the restriction therein contemplated, which is confined to questioning the jurisdiction of an Assessing Officer, can have any bearing on the claim of the present assessee before us, who has assailed the validity of the assessment order passed under Section 147 r.w.s 144 r.w.s 144B of the Act, dated 19/02/2024 by the Assessment Unit, Income-Tax Department, i.e., Faceless Assessing Officer (FAO) based on the Notice u/s 148 of the Act, dated 31/03/2023 issued by the ITO, Ward-1, Nellore, i.e., JAO who inherently lacked the jurisdiction for both initiating the proceedings u/s 148A of the Act and issuing Notice u/s 148 of the Act.

18. Before dealing with the subject issue, we deem it apposite to look into the fabric of Section 124 of the Act. On a careful perusal of Section 124 of the Act, it transpires that the same apparently deals with the issue of "territorial jurisdiction" of an Assessing Officer. Ostensibly, sub-section (1) of Section 124 contemplates vesting with the AO of jurisdiction over a specified area by virtue of any direction or order issued under sub-section (1) and sub-section (2) of Section 120 of the Act. Sub-section (2) of Section 124 contemplates the manner in which any controversy regarding the territorial jurisdiction of an AO is to be resolved. Apropos sub-section (3) of Section 124 of the Act, the same places a restriction upon an assessee to call in question the jurisdiction of the A.O where he had initially not raised such objection within a period of one month from the date on which he was served with a notice under sub-section (1) of Section 142 or sub-section (2) of Section 143 or Section 148 or sub-section (1) of Section 153A or sub-section (2) of Section 153C. To sum up, the obligation cast upon an assessee to call in question the jurisdiction of the A.O as per the mandate of sub- Page 7 of 29 section (3) of Section 124 is confined to a case where he objects to the assumption of jurisdiction by the A.O, and not otherwise.

19. At this stage, we may herein refer to certain judicial pronouncements that had in the past held the field on the aforesaid issue. The Hon'ble High Court of Bombay in the case of Peter Vaz & Ors. Vs, CIT & Ors. (2021) 436 ITR 616(Bom) and the Hon'ble High Court of Gujarat in the case of Commissioner of Income-tax v. Ramesh D. Patel [2014] 42 taxmann.com 540/225 Taxman 411/362 ITR 492 (Gujarat), had held that as Section 124 of the Act pertains to territorial jurisdiction vested with an AO under sub-section (1) or sub-section (2) of Section 120, therefore, the provisions of sub-section (3) of Section 124 which puts a restriction on an assessee to object to the validity of the jurisdiction of an A.O would get triggered only in a case where the dispute of the assessee is with respect to the territorial jurisdiction and have no relevance in so far his inherent jurisdiction for framing the assessment is concerned. Further, the Hon'ble High Court of Bombay in the case of Bansilal B. Raisoni & Sons v. Assistant Commissioner of Income Tax [2019] 101 taxmann.com 20/260 Taxman 281 (Bombay) had, inter alia, observed that the time limit for objecting to the jurisdiction of the Assessing Officer prescribed under sub-section (3) of Section 124 has a relation to the Assessing Officer's territorial jurisdiction. It was further observed that the time limit prescribed would not apply to a case where the assessee contends that the action of the Assessing Officer is without authority of law and, therefore, wholly without jurisdiction. Also, the Hon'ble High Court of Bombay in the case of Commissioner of Income tax v. Lalitkumar Bardia [2017] 84 taxmann.com 213/[2018] 404 ITR 63 (Bombay) had addressed the contention of the department that where the assessee had not objected to the jurisdiction within the time prescribed under sub-section (3) of Section 124 of the Act, then, having waived its said right, it was barred from raising the issue of jurisdiction after having participated in the assessment proceedings. The Hon'ble High Court had observed that the waiver can only be of one's right or privilege, but non-exercise of the same will not bestow jurisdiction on a person who inherently lacks jurisdiction. Therefore, the principle of waiver cannot be invoked to confer jurisdiction on an Officer who is acting under the Act when he does not have jurisdiction. The Hon'ble High Court, while concluding as hereinabove, had relied on the judgment of the Hon'ble Supreme Court in the case of Kanwar Singh Saini v. High Court of Delhi (2012) 4 SCC 307. The Hon'ble Apex Court in its aforesaid judgment, had held that it is the settled legal proposition that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the parties nor by a superior court. The Hon'ble Apex Court further observed that if the court passes an order or decree having no jurisdiction over the matter, it would amount to a nullity as the matter goes to the roots of the cause. Also, the Hon'ble Apex Court clarified that an issue can be raised at any belated stage of the proceedings, including in appeal or execution. Elaborating further, it was observed by the Hon'ble Apex Court that the finding of a court or tribunal becomes irrelevant and unenforceable and inexecutable once the forum Page 8 of 29 is found to have no jurisdiction. It was further observed by the Hon'ble Apex Court that the acquiescence of a party equally should not be permitted to defeat the legislative animation, and the court cannot derive jurisdiction apart from the statute. For the sake of clarity, the observations of the Hon'ble Apex Court in the case of Kanwar Singh Saini (supra) are culled out as under: "22. There can be no dispute regarding the settled legal proposition that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the parties nor by a superior court, and if the court passes order/decree having no jurisdiction over the matter, it would amount to a nullity as the matter goes to the roots of the cause. Such an issue can be raised at any belated stage of the proceedings including in appeal or execution. The finding of a court or tribunal becomes irrelevant and unenforceable/inexecutable once the forum is found to have no jurisdiction. Acquiescence of a party equally should not be permitted to defeat the legislative animation. The court cannot derive jurisdiction apart from the statute. (Vide United Commercial Bank Ltd v. Workmen, Nai Bahu v. Lala Ramnarayan, Natraj Studios (P) Ltd. v. Navrang Studios, Sardar Hasan Siddiqui v. STAT, A.R. Antulay v. R.S. Nayak, Union of India v. Deoki Nandan Aggarwal, Karnal Improvement Trust v. Parkash Wanti, U.P. Rajkiya Nirman Nigam Ltd. v. Indure (P) Ltd., State of Gujarat v. Rajesh Kumar Chimanlal Barot, Kesar Singh v. Sadhu, Kondiba Dagadu Kadam v. Savitribai Sopan Gujar and CCE v. Flock (India) (P) Ltd.)"

(emphasis supplied by us) 20. We further find that the Hon'ble Supreme Court in its recent order passed in the case of Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70/301 Taxman 238/469 ITR 46 (SC) had, inter alia, observed that the order passed without jurisdiction is nullity. It was further observed that if a statute expressly confers a power or imposes a duty on a particular authority, then such power or duty must be exercised or performed by that authority itself. The Hon'ble Apex Court had further observed that any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid. Apart from that, it was observed that as there cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment, therefore, any consequential order passed or action taken will be invalid and without jurisdiction. For the sake of clarity, the observations of the Hon'ble Apex Court are culled out as under: “30. If a statute expressly confers a power or imposes a duty on a particular authority, then such power or duty must be exercised or performed by that authority itself. (Dr. Premachandran Keezhoth v. Chancellor, Kannur University).

Page 9 of 29 Further, when a statute vests certain power in an authority to be exercised in a particular manner, then that authority has to exercise its power following the prescribed manner (CIT v. Anjum M.H. Ghaswala; State of Uttar Pradesh v. Singhara Singh). Any exercise of power by statutory authorities inconsistent with the statutory prescription is invalid............. *** ** *** *** ** *** *** ** *** 32. A statutory authority may lack jurisdiction if it does not fulfil the preliminary conditions laid down under the statute, which are necessary to the exercise of its jurisdiction. (Chhotobhai Jethabhai Patel and Co. V. Industrial Court, Maharashtra Nagpur Bench).There cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment. (Superintendent of Taxes v. Onkarmal Nathmal Trust). An order passed without jurisdiction is a nullity. Any consequential order passed or action taken will also be invalid and without jurisdiction. (Dwarka Prasad Agrawal V. B.D. Agrawal). Thus, the power of assessing officers to reassess is limited and based on the fulfilment of certain preconditions. (CIT v. Kelvinator of India Ltd.)" (emphasis supplied by us)

11. On perusal of above, we find that this Tribunal has rejected the objection of the Revenue regarding the alleged failure on the part of the assessee to challenge the jurisdiction of the JAO within the time prescribed under Section 124(3) of the Act. The Tribunal has categorically held that the objection raised by the assessee pertains to the inherent lack of jurisdiction, which was not the issue before the Hon’ble Supreme Court in the case of DCIT v. Kalinga Institute of Industrial Technology (supra). Therefore, respectfully following the order of this Tribunal, we also hold that the assessee’s challenge to the inherent lack of jurisdiction with the JAO to initiate proceedings under Section 148A of the Act, as well as to issue the notice under Section 148 of the Act, will not be governed by the judgment of the Hon’ble Supreme Court in DCIT v. Kalinga Institute of Industrial Technology (supra). The said judgment, being distinguishable on facts and on the issue involved, does not advance the case of the Revenue before us.

12. Now coming to the core issue regarding the objection of the Ld. AR that the notice issued under section 148 as well as the order passed under section 148A(d) of the Act were by the JAO instead of the FAO, we have gone through the order passed under section 148A(d) of the Act, dated 15.04.2022, which is to the following effect:

Page 12 of 29 Page 13 of 29

10. Thereafter, the AO also passed an order u/s 148A(d) on 29.03.2023, wherein, the AO has recorded that, despite sufficient time allowed to the assessee in accordance with the provisions of section 148A(b) for compliance to the show cause notice dated 21.02.2023, there is no compliance on behalf of the assessee to the said show cause notice. The AO decided that it is a fit case for issue of notice u/s 148 of the Act and consequently notice u/s 148 was issued on 30.03.2023 as under :

13. In light of various judgements of the Hon’ble High Courts, including the judgement of the jurisdictional Page 19 of 29 High Court in the case of Kankanala Ravindra Reddy Vs. Income Tax Officer [2024] 156 taxmann.com 178 (Telangana), the Hon’ble High Court has held in para 13 to 19 as under : “13. Another aspect which needs to be considered is that in fact it should have been realized by the Income Tax Department itself and should have found out via media in ensuring that proceedings under Sections 148-A and 148 should not have been issued in a faceless manner, at least till the Hon’ble Supreme Court decide the twelve hundred (1200) odd SLPs which it is already seized of or, at least the Income Tax Department should have found out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections 148-A and 148, other than in a faceless manner, the proceedings should have been deferred without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only after the SLP’s are decided by the Hon’ble Supreme Court on the very same issue. This again, the Income Tax Department, has not been able to give a convincing reply, except for the fact that such a decision if at all has to be taken, has to be taken for the whole of India, and which otherwise has to be by way of a policy decision and that too at the level of Central Board of Direct Taxes. Though the learned Standing Counsel for the Income Tax Department contended that the Delhi High Court dismissed a writ petition of similar nature, on the one hand when the High Court is struggling to reduce its pendency, such notices which are under challenge in this writ petition are forcing the assessee to knock the doors of this High Court resulting in filing of hundreds of new writ petitions which in the long run not only affects the disposal of the writ petitions but also consumes substantial time of the Bench in hearing these matters again and again on daily basis. Admittedly, in spite of the matter before the Hon’ble Supreme Court having been taken on many occasions, the Hon’ble Supreme Court which is seized of the matter has been reluctant in granting any interim protection to the Income Tax Department. Yet, the authorities concerned at the State level are not ready to accept the verdict passed by a majority of High Courts of different States on the same issue; and to make things further worse, the Income Tax Department is showing audacity by issuing notices continuously under Sections 148-A and 148 through the jurisdictional Assessing Officer whereas it ought to have been only in the faceless manner.

14. In the case of BANK OF INDIA vs. ASSISTANT COMMISSIONER, INCOME TAX11, on an issue whether it was justifiable on the part of the Income Tax Department in not following an order passed by the adjudicating authority only on the ground that the appeals are pending, the Division Bench of the High Court of Bombay held at paragraph No.25 as under, viz., : “25. Mr. Paridwalla has rightly drawn out attention to the decision of this Court in Commissioner of Income Tax vs. Smt. Godavaridevi Saraf12 as also the recent decision of the co ordinate Bench of this Court in Samp Furniture (P) Ltd. v. ITO13 of which one of us (Justice G.S. Kulkarni) was a member, wherein the Court categorically observed that the Revenue having not “accepted” the judgment of Page 20 of 29 the High Court would not mean that till the same is set aside in a manner known to law, it would loose its binding force. Referring to the decision of the Supreme Court in Union of India vs. Kamlakshi Finance Corporation Ltd.14, the Court observed that the approach of the officials of Revenue of treating decisions being “not acceptable” was criticized by the Supreme Court. In such decision, following are the relevant observations made by the Supreme Court. “6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual malafides but with the fact that the officers, in reaching in their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view, rightly criticized this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hierarchy. It cannot be too vehemently emphasized that it is of utmost importance that, in disposing of the quasijudicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellte Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not “acceptable” to the department – in itself an objectionable phrase – and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assesses and chaos in administration of tax laws. … … … 12. We have dealt with this aspect at some length, because it has been suggested by the learned Additional Solicitor General that the observations Page 21 of 29 made by the High Court, have been harsh on the officers. It is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assesses-public without any benefit to the Revenue. We would like to say that the department should take these observations in the proper spirit. The observations of the High Court should be kept in mind in future and the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them.”

15. What is worrying this Bench more is the fact that an endeavour is being made whole heartedly to ensure not to generate further litigation on issues which have been laid to rest by a large number of High Courts all of whom have taken a consistent stand that the action of the Income Tax Department being violative of the 15 Finance Act, 2020 and Finance Act, 2021. Now, in order to protect the interest of the Revenue as also that of the assessee, it would be trite at this juncture, if we dispose of the writ petition with an observation/direction that the disposal of the instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanala Ravindra Reddy (1 supra) shall however be subject to the outcome of the SLPs which were filed by the Income Tax Department and which is pending consideration before the Hon’ble Supreme Court.

17. So far as the interest of the Revenue is concerned, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs 16 36, 37 and 38 of the order which, for ready reference, is reproduced hereunder:

Page 22 of 29 “36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent Department is neither tenable, nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under Section 147 and 148 would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically.

14. Thus, it is clear that the issue raised by the assessee in the present appeal is now covered by the decision of Hon’ble Jurisdictional High Court in the assessee’s own case for the A.Y.2016-17. As regards the contention of the Ld.DR that no such issue was raised by the assessee before the authorities below, we find from the Grounds of Appeal

raised before the CIT(A) that the assessee had raised this issue in ground No.2 to 5 as under : “2. On the facts and in the circumstances of the case and in law, the Jurisdictional Assessing Officer erred by initiating proceedings u/s 147of the Act, simply relied on the SFT information shown in the verification module of Insight Portal at the time of reopening, however, either no information gathered or not conducted any inquiry further in order to form an honest and a reasonable belief that certain income had escaped assessment in the case of the appellant, As such, said proceedings and the consequent order ought to be declared null and void-ab-initio.

3. The Notice issued u/s 148 of the I.T. Act, 1961 dated 30.03.2023 is illegal and unsustainable in law since the income alleged to have escaped assessment, actually is far below the threshold limit of Rs. 50 Lacs/-, in the present case, it is actually Rs. 30,61,000/- only and thereby, barred by limitation under the provisions of section 149(1) (a) of the Act. Since the impugned notice issued u/s 148 of the I.T Act, 1961 dated 30.03.2023, is illegal and unsustainable in law, accordingly, the impugned reassessment order u/s 147 r.w.s 144B of the Act dated 01.03.2024 and the notice of demand dated 01.03.2024 issued u/s 156 of the Act are also bad in law and unsustainable and the same, is hereby, quashed and set aside.

4. On the facts and in the circumstances of the case and in law, the Assessment Unit/NaFAC erred by making the additions without supplying the relevant documents or tangible material to the appellant and without obtaining the bank account statement(s) relied on which the case was reopened by the JAO, as such, said proceedings and the consequent order ought to be declared null and void-ab-initio.

5. On the facts and in the circumstances of the case and in law, the Jurisdictional Assessing Officer erred in the proceedings initiated u/s 147 of the Act without following due procedure prescribed by CBDT vide Instruction NoF.No.299/10/2022- Dir(Inv.III)/647 dt., 22.08.2022 and accordingly the said proceedings and the consequent order ought to be declared null and void ab initio.” 15. In view of the facts emanating from the record, we find that the assessee has duly raised this issue before the CIT(A) and therefore, the contention raised by the Ld.DR is devoid of any merit. Accordingly, the show cause notice issued u/s 148A(b) dated 21.02.2023 as well as notice issued u/s 148 dated 30.03.2023 by the JAO are not valid and liable to be quashed. We order accordingly. 16. However, since the matter is pending adjudication before the Hon’ble Supreme Court and Hon’ble High Court has also given the liberty to the parties to move an appropriate petition, seeking revival of W.P. in light of judgement of Hon’ble Supreme Court on this very issue, we also grant liberty to the parties to get this appeal revived, if, in case the judgement of the Hon’ble Supreme Court on this issue necessitate to modify this order.” 16. On perusal of the above, it is evident that, this Tribunal relying on the Judgment of Hon’ble Jurisdictional High Court for the State of Telangana in the case of Kotha Kanthaiah dated 24/04/2025 in W.P.No.344 of 2025, has held that the notice issued under section 148 of the Act by the JAO on or after the date of CBDT notification(supra) is not valid and liable to be set- aside/quashed. In the present case, there is no dispute on the fact that the notice under section 148 of the Act has been issued by the JAO after the date of CBDT notification (supra). Therefore, respectfully following the Judgment of Hon’ble Jurisdictional High Court for the State of Telangana in the case of Kotha Kanthaiah (supra) as well as the decisions of this Tribunal in the case of Kotha Kanthaiah (supra), we hold that, the notice issued by the JAO under section 148 of the Act, dated 15.04.2022 is not valid and liable to be quashed. Accordingly, we set aside the order of the Ld. CIT(A) and quash the impugned assessment order passed by the Ld. AO in the same terms as laid down by the Hon’ble Page 25 of 29 Jurisdictional High Court for the State of Telangana in the case of Kotha Kanthaiah(supra).

18. As we have allowed the appeal of the assessee on legal ground, we do not propose to adjudicate on the other grounds of appeal

, which are kept upon.

19. In the result, the appeal of the assessee in is allowed in terms of our above observation. & 1606/Hyd/2025 :

20. In all these three appeals, the assessee has filed additional grounds along with petition for admission of such additional grounds. The Ld. ARs have submitted that additional grounds so raised are admissible in view of judgment rendered by the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC). The Ld. DR did not raise any objection for admission of the additional grounds. The prayer for admission of additional grounds are being admitted for adjudication in terms of Rule 11 of the Income Tax (Appellate Page 26 of 29 Tribunal) Rules, 1963 owing to the fact that objections raised in additional grounds are legal in nature for which relevant facts are stated to be emanating from the existing records.

21. We observe that in all these three appeals, the assessee has raised additional ground challenging the validity of the notice issued under section 148 of the Act as well as the order passed under section 148A(d) of the Act. The assessee has contended that the notice issued under section 148 and the order passed under section 148A(d) of the Act were by the JAO instead of the FAO, which is contrary to the statutory scheme of Faceless Assessment introduced by the CBDT. It has been argued that, since the notices and orders were issued by the JAO in violation of the mandatory faceless procedure, the proceedings are bad in law, and consequently, the assessment orders passed pursuant thereto are liable to be quashed.

22. On perusal of the respective records, we find that in for Assessment Year 2018–19, the Ld. AO passed the order under section 148A(d) on 30.03.2022 and issued the notice under section 148 on 31.03.2022. In Hyd/ 2025 for Assessment Year 2019–20, the Ld. AO passed the order under section 148A(d) on 07.04.2023 and issued the notice under section 148 on 10.04.2023. In for Assessment Year 2018–19, the Ld. AO issued the notice under section 148 and passed the order under section 148A(d) on 25.04.2022. Thus, in all thsee three appeals, there is no dispute regarding the fact that the Ld. AO passed the order under section 148A(d) and issued the notice under section 148 after 29.03.2022, which is the effective date notified by CBDT for implementation of Page 27 of 29 the Faceless Reassessment Scheme. As per the CBDT Notification, any assessment, reassessment or recomputation under section 147 of the Act, and any notice issued under section 148 on or after 29.03.2022, shall mandatorily be in accordance with the faceless reassessment scheme and must be carried out by the FAO. Therefore, the issues involved in these three appeals are identical to those arising in ITA No. 1317/Hyd/2025. Hence, our observations and findings recorded therein apply mutatis mutandis to the present appeals as well. In ITA No. 1317/Hyd/2025, we have held that a notice issued by the JAO under section 148 of the Act after 29.03.2022 is invalid and bad in law, and accordingly we have set aside the order of the Ld. CIT(A) and quashed the impugned assessment order. Following the same reasoning, all these three appeals filed by the assessee are also allowed in same terms.