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Facts
The assessee filed an appeal against the CIT(A) order for AY 2015-16. The Assessing Officer (AO) issued a notice u/s 148 based on information about investment in commercial land. The AO accepted some sources but rejected others, treating them as unexplained under Section 69.
Held
The Tribunal held that the notice issued u/s 148 dated 30.07.2022 by the Jurisdictional Assessing Officer was legally invalid because it was issued after the mandatory Faceless Reassessment Scheme notification, which requires such notices to be issued through automated allocation. Thus, the entire reassessment proceedings were void ab initio.
Key Issues
Whether a notice issued u/s 148 by the Jurisdictional Assessing Officer after the introduction of the Faceless Reassessment Scheme is valid and jurisdictional.
Sections Cited
148, 147, 144, 69, 115B, 151, 148A(d), 144B
AI-generated summary — verify with the full judgment below
िनधा"रती की ओर से/Assessee by : Shri Tej Mohan Singh, Advocate राज" की ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 29/10/2025 उदघोषणा की तारीख/Date of Pronouncement : 27/11/2025 आदेश/Order PER LALIET KUMAR, J.M: This appeal by the assessee is directed against the order of the CIT (A), NFAC, Delhi dated 03/06/2025 for the assessment year 2015-16. 2. In the present appeal Assessee has raised the following grounds:
That the notice issued u/s 148 of the Act dated 30.07.2022 by the Jurisdictional Assessing Officer is illegal in view of the notifications dated 28.03.2022 and 29.03.2022 which states that the notice under section 148 of the Act shall be issued through automated allocation only and the Ld. Jurisdictional Assessing Officer is not at legally competent to issue notice under section 148 of the Act as the same was required to be issued by National Faceless Assessment Centre and as such the proceedings initiated are illegal, arbitrary and unjustified.
That the notice issued u/s 148 is barred by limitation as held by the Hon'ble Supreme Court in Union of India v Rajeev Bansal(2023) 167 Taxmann.com 70(SC) WHARE the court held that for AY 2015-16, any notice issued after 01.04.2021 is not sustainable in as much as the same is issued beyond the prescribed period and as such the proceedings initiated are illegal, arbitrary and unjustified.
3. That the Ld. Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the initiation of proceedings under section 147 of the Act and framing the assessment under section 147 r.w.s 144 of the Act without satisfying the statutory pre-conditions required for initiation of proceedings and completion of assessment and as such, the same are without jurisdiction and hence deserve to be quashed as such.
That the Ld. Commissioner of Income Tax (Appeals) has failed to appreciate that there was no tangible material on record to form a "reason to believe"that income of the appellant had escaped assessment and in view thereof the proceedings initiated are illegal, untenable and therefore unsustainable.
5. That initiation of proceedings was mechanical and without any application of mind much less independent application of mind, therefore the notice issued u/s 148 of the Act was an invalid notice and assumption u/s 147 of the Act was without jurisdiction.
6. That in absence of any valid approval obtained mechanically under section 151 of the Act, initiation of proceedings u/s 147 of the Act and assessment framed u/s 147/144B of the Act are invalid and deserve to be quashed as such. 7. That the information on the basis of which proceedings u/s 148 A were initiated is based only on borrowed information without application of mind much less independent application of mind and hence untenable.
That without prejudice to the above, the Ld. Commissioner of Income Tax(Appeals) has erred in upholding the addition of Rs.46.50,000- made on aecount of alleged absence of source of purchase of immovable property applying the provisions of Section 69 read with 115B in utter disregard of the explanations rendered and as such the addition upheld is arbitrary and unjustified.
That the Ld. Commissioner of Income Tax(Appeals) has erred in rejecting the evidence in respect of amount of Rs.20,00,000/- and Rs.26,50,000/-, гесeived from Sh. Jeet Pal Mittal and Sh. Rajinder Pal Mittal respectively which is arbitrary and unjustified.
During the course of hearing, the Ld. AR submitted, at the very outset, that the entire reassessment proceedings are void ab initio because the notice issued under section 148 of the Income-tax Act, 1961 dated 30.07.2022 was issued by the Jurisdictional Assessing Officer (JAO), whereas, in view of the Notification dated 29.03.2022 issued by the Ministry of Finance, only the Faceless Assessing Officer was competent to issue such notice. It was argued that this defect strikes at the root of jurisdiction and renders the proceedings non est. The learned AR further submitted that the Chandigarh Bench of the Tribunal has repeatedly quashed reassessment orders on identical facts, including in the cases of Sham Chand v. ITO in Biripur Primary Agriculture Society v. ITO in ITA 213/Chd/2025, and more recently in Vishal Bhardwaj v. ITO in ITA 975/Chd/2024, wherein the Tribunal, following the binding judgments of the Hon’ble Punjab & Haryana High Court in Jatinder Singh Bhangu and Jasjit Singh, held that any notice issued by the Jurisdictional Assessing Officer after 29.03.2022 is without authority of law.
4. Per contra, the Ld. DR relied upon the orders of the lower authorities and submitted that the assessment was completed after due opportunity. I have carefully considered the rival submissions and examined the record. In the present case, the assessee originally filed return declaring total income of Rs.10,45,260/-. The Assessing Officer issued a notice under section 148 on 30.07.2022 on the basis of information flagged as High Risk CRIU/VRU relating to investment of Rs.94,71,000/- in purchase of commercial land jointly with her son. The assessee explained the source of investment as loans received from various parties. The Assessing Officer accepted some sources and rejected others aggregating to Rs.71,50,000/-, treating them as unexplained investment under section 69. The CIT(A), after detailed consideration, deleted Rs.25,00,000/- relating to loan from Shri Darshan Kumar and confirmed the balance addition of Rs.46,50,000/-.
Against this order the present appeal is filed.
However, before entering into merits, the preliminary legal issue of jurisdiction must be adjudicated. The notice under section 148 in the present case was issued on 30.07.2022 by the Jurisdictional Assessing Officer. It is undisputed that on 29.03.2022, the Central Government issued a Notification under section 151A introducing the Faceless Reassessment Scheme, making it mandatory that notices under section 148 shall be issued through automated allocation in a faceless manner. The Hon’ble Punjab & Haryana High Court in Jatinder Singh Bhangu and Jasjit Singh has categorically held that where the statute mandates issuance of notice by the Faceless Assessing Officer, any notice issued by the Jurisdictional Assessing Officer is invalid for want of jurisdiction. These decisions have been consistently followed by this Bench. In Vishal Bhardwaj (supra), an identical jurisdictional defect was examined and the Tribunal categorically quashed the reassessment proceedings. Likewise, in Sham Chand (supra), the Tribunal held that where the notice under section 148 is issued by the Jurisdictional Assessing Officer post 29.03.2022, the very initiation is void and consequently the reassessment order cannot survive. There is no distinction in facts in the case before me.
6.1 Respectfully following the binding precedents of the Jurisdictional High Court as well as the coordinate Benches of this Tribunal, and applying the same reasoning to the present case, I hold that the notice issued under section 148 dated 30.07.2022 by the Jurisdictional Assessing Officer is legally invalid. Since the foundational notice is void, the order passed under section 148A(d), the reassessment order passed under section 147 read with section 144B, and the appellate order of the CIT(A) all stand vitiated and cannot be sustained. Once the notice itself is without jurisdiction, nothing further required to be adjudicated on merits.
6.2 Accordingly, the reassessment order dated 29.05.2023 is quashed and the order of the CIT(A) dated 03.06.2025 is set aside. In the result, the appeal of the assessee is allowed.
In the result, appeal of the Assessee is allowed.