Loading judgment…
Facts
The assessee, Smt. Vijaya Kanika, appealed against the Ld. CIT(A)'s order for AY 2016-17, which had confirmed an assessment order under Section 147 read with Sections 144 and 144B. The primary legal ground of appeal concerned the validity of reassessment proceedings, arguing that the Section 148 notice and Section 148A(d) order were issued by the Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO) after the CBDT Notification No. 18/2022 mandated faceless assessment from 29.03.2022.
Held
The Tribunal found that the Section 148A(d) order and Section 148 notice were indeed issued by the JAO on 23.03.2023, after the effective date of the CBDT notification. Following consistent judgments from the jurisdictional High Court of Telangana and other High Courts, the Tribunal held that notices issued by the JAO after 29.03.2022 for faceless assessment were invalid and liable to be quashed. The appeal was allowed on this legal ground, with consequential orders also set aside, and liberty granted to the parties to seek revival if the Supreme Court's decision in a similar pending matter necessitates modification.
Key Issues
Whether reassessment proceedings and notices issued under Section 148 and Section 148A(d) by a Jurisdictional Assessing Officer (JAO) are valid, when a CBDT Notification mandated issuance by a Faceless Assessing Officer (FAO) after a specific date.
Sections Cited
147, 148, 144, 148A(d), 250, 149(1)(b), 151A(1), 151A(2), 144B, 148A(a), 148A(b), 156
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, Hyderabad ‘ DB-A ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Madhusudan Sawdia
ORDER Per Madhusudan Sawdia, A.M.: This appeal is filed by Smt. Vijaya Kanika (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, (NFAC), Delhi (“Ld. CIT(A)”) dated 18.03.2025 for the A.Y 2016-017.
The assessee has raised the following grounds of appeal:
Page 1 of 25 Page 2 of 25
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 2016-17 under Section 147 read with Sections 144 and 144B of the Income Tax Act, 1961(“the Act”), dated 25.03.2024. The Ld. CIT(A) dismissed the appeal of the assessee.
Aggrieved by the order of the Ld. CIT(A), the assessee is in further appeal before this Tribunal. On perusal of the grounds of appeal, we find that the assessee has raised a legal ground challenging the validity of the notice issued under Section 148 of the Act. Since this legal ground goes to the root of the matter, we consider it appropriate to first take up and adjudicate this legal ground before proceeding to examine the appeal on merits. In this regards the Ld. AR submitted that the notice under section 148 of the Act and as well as the order under section 148A(d) of the Act were issued by the Jurisdictional Assessing Officer (“JAO”) instead Page 3 of 25 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 23.03.2023 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 various decisions of the Coordinate Benches of the Tribunal and Hon’ble High Courts, the Ld. AR argued that when a notice is issued by an authority having no jurisdiction 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 144B of the Act are bad in law and liable to be quashed.
Per contra, the Ld. DR strongly supported the orders of the lower authorities. He submitted that the legal issue raised by the assessee is pending adjudication before the Hon’ble Supreme Court in the case of Hexaware Technology Ltd., in the SLP filed by the Revenue against the Judgment of Hon’ble High Court of Bombay. Therefore, this issue may be kept open till the outcome of the SLP pending before the Hon’ble Supreme Court.
We have considered the rival submissions and perused the material available on record. We have gone through the order Page 4 of 25 passed under section 148A(d) of the Act, dated 23.03.2023, which is to the following effect:
Page 5 of 25 Page 6 of 25
On perusal of above, it is evident that the order under section 148A(d) of the Act was passed by JAO on 23.03.2023. We have also gone through the notice issued under section 148 of the Act, which is to the following effect:
On perusal of the above, it is evident that the notice under section 148 of the Act have also been issued by the JAO on 23.03.2023. Further, we have carefully examined the CBDT Page 8 of 25 Notification No. 18/2022 dated 29.03.2022, issued in exercise of power conferred under section 151A(1) and (2) of the Act, which is to the following effect:
On perusal of para no. 3 of the said notification, it is evident that the assessment, re-assessment or re-computation under section 147 of the Act and any notice to be issued under section 148 of the Act on or after 29.03.2022 shall be in accordance with the Faceless Assessment Scheme by the FAO. Hence, on perusal of the order under section 148A(d) of the Act, notice issued Page 9 of 25 under section 148 of the Act and the CBDT notification, we find that in the present case, the order under section 148A(d) of the Act and the notice under section 148 of the Act was issued on 23.03.2023, i.e., after the said CBDT notification came into effect. However, in terms of the CBDT Notification, the JAO ceased to have authority to issue notice under section 148 of the Act w.e.f. 29.03.2022. It is manifest from the above that the issue of notice under section 148 of the Act as well as the passing of order under section 148A(d) of the Act were conducted by the JAO and not in the Faceless manner as prescribed by the CBDT notification dated 29.03.2022. We note that similar issue has been considered by the Coordinate Bench of ITAT, Hyderabad in the case of Shri Kotha Kanthaiah vs. ITO in ITA.No.1259/Hyd/2024 for the assessment year 2016-17 vide Order dated 04.09.2025 wherein the Tribunal in para nos. 9 to 16 of its order held as under : “9. We have considered the rival submissions as well as material on record. In the case of the assessee, notice u/sec.148A(b) was issued on 21.02.2023 by JAO. For ready reference, the same is reproduced as under :
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 :
Undisputedly, the show cause notice u/s 148A(b) as well as notice u/s 148 were issued by the JAO and not by the faceless Assessing Officer. At the outset, we note that the Hon’ble Jurisdictional High Court has considered an identical Page 11 of 25 issue in assessee's own case for the immediate preceding assessment year i.e. 2015-16 vide judgement dated 24.04.2025 in W.P.No.344 of 2025 and has recorded the issue involved in the said petition in para 4 of the said judgement as under :
12. It was further noted by the Hon’ble jurisdictional High Court that this issue has been decided against the Revenue by various High Courts and the details of all the judgements of various High Courts are given in para 5 of the said judgement as under :
13. In light of various judgements of the Hon’ble High Courts, including the judgement of the jurisdictional High Court in the Page 13 of 25 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 :
Page 14 of 25 Page 15 of 25 Page 16 of 25 Page 17 of 25 Page 18 of 25 Page 19 of 25 Page 20 of 25 Page 21 of 25
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 :
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.
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”. 11. On perusal of the above, it is clear that the Hon’ble Jurisdictional High Court for the State of Telangana has taken a consistent view that the notice under section 148 of the Act by the JAO 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. Therefore, respectfully following the Judgment of Hon’ble Jurisdictional High Court for the State of Telangana as well as the decisions of this Tribunal (supra), we hold that, the notice issued by the JAO under section 148 of the Act, dated 23.03.2023 is not valid and liable to be quashed. We order accordingly.
Further, we find that the issue is pending for adjudication before the Hon’ble Supreme Court in the SLP filed by the Revenue in the case of Hexaware Technology Ltd., against the Judgment of Hon’ble High Court of Bombay and the Order of Hon’ble Jurisdictional High Court for the State of Telangana in the case of Kotha Kanthaiah, Karimnagar in WP.No.344 of 2025, dated 24.04.2025 (supra) has given the liberty to the parties to move an appropriate petition seeking revival of the petition in light of Judgment of Hon’ble Supreme Court in the case of Hexaware Technology Ltd., (supra) on this issue. Therefore, we grant liberty to the parties to get this appeal revived, if the Judgment of Hon’ble Supreme Court on this issue necessitates to modify this Order. Accordingly, appeal of the assessee is allowed in terms of our above observation.
As we have allowed the appeal of the assessee on legal ground, we do not propose to adjudicate on the other grounds, which are kept upon to be argued at appropriate forum.