PRABHAKAR REDDY BASIREDDY, NALGONDA vs. DCIT., CENTRAL CIRCLE-1(1), HYDERABAD

Facts

The assessee did not file his income tax return for AY 2020-21. Following a search and seizure operation under Section 132, the Assessing Officer (AO) initiated reassessment proceedings under Section 147 by issuing a notice under Section 148. The assessee challenged the validity of this notice, arguing it was issued by a Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO), contrary to the new faceless assessment regime which came into effect from 01.04.2021.

Held

The Tribunal, following the jurisdictional High Court's judgment in `Kings Pride Infra Projects`, held that the reassessment notice issued by the Jurisdictional Assessing Officer (JAO) was invalid. It concluded that assessments initiated after 01.04.2021 must follow the faceless mechanism, and notices under Section 148 cannot be issued by a JAO. Consequently, the assessment order passed under Section 147 was quashed due to a lack of valid assumption of jurisdiction.

Key Issues

Whether a reassessment notice issued under Section 148 by a Jurisdictional Assessing Officer (JAO) is valid when the faceless assessment mechanism, requiring issuance by a Faceless Assessing Officer (FAO), applies to assessments initiated after April 1, 2021.