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Facts
The assessee, an agriculturist, challenged an assessment order that upheld additions to his income, arguing that bank deposits originated from agricultural receipts and that a large cash redeposit was due to demonetisation. The primary legal challenge raised was that the notice issued under Section 148 of the Income Tax Act was invalid, having been issued by a Jurisdictional Assessing Officer instead of a Faceless Assessing Officer as mandated by a CBDT notification.
Held
The Tribunal, relying on several High Court and its own previous judgments, held that the notice issued under Section 148 by the Jurisdictional Assessing Officer constituted a jurisdictional error, making the re-assessment proceedings invalid. Consequently, the Tribunal quashed the re-assessment order and allowed the assessee's appeal.
Key Issues
Whether a reassessment notice issued under Section 148 of the Income Tax Act by a Jurisdictional Assessing Officer, instead of a Faceless Assessing Officer, is valid following specific CBDT notifications and if such a jurisdictional error invalidates the entire assessment process.
Sections Cited
148, 144B, 147, 148A(1), 69A, 115BBE
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"नधा""रती क" ओर से/Assessee by : Sh Tejinder Joshi, Advocate राज"व क" ओर से/ Revenue by : Sh. Vinod Kumar Chaudhary, JCIT, Sr. DR सुनवाई क" तार"ख/Date of Hearing : 12-11-2025 उदघोषणा क" तार"ख/Date of Pronouncement : 17-11-2025 आदेश/Order This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), NFAC, dated 18.07.2024, for the assessment year 2019-20. 2. The grounds of appeal raised by the Assessee are as under: -
1. That the order of Ld. CIT(A) is against the law and facts of the case.
2. That the Learned CIT(A) has grossly erred in not deciding the appeal on the merits of the case and is not justified in passing in limine, ex parte order, not on merits & totally non speaking order that too without considering Statement of Facts, Grounds of appeal
and the documents, evidences in the form of Bank Statements, I Forms. Land holdings duly submitted & uploaded before the Ld. CIT(A) along with Form 35.
3. That the Ld. CIT(A), has erred while upholding the illegal and arbitrary addition as made by the Ld. AO, without appreciating 3 the fact that the appellant herein is an agriculturist and all the deposits in the bank account are from agricultural receipts, duly supported by land holdings and J-Forms.
4. That the Ld. CIT(A), has erred while upholding the illegal and arbitrary addition as made by the Ld. AO, without appreciating the fact that the amount of Rs. 2,45,000/- was redeposited in OBC bank on 11.11.2016 out of the amount of Rs. 2,95,000/-4 which was withdrawn on 29.10.2016 from the same bank account and due to declaration of the demonetisation declared on 08.11.2016 the cash withdrawn on 29.10.2016 was redeposited as cash withdrawn was still not utilized by the assessee and was still remaining with the assessee.
5. That the Learned CIT(A) has grossly erred while upholding the additions, without appreciating the fact that during the month of October. 2016 itself, the total receipts from sale of agricultural produce was Rs. 12,67,887/- duly supported by J-Forms and because of the declaration of demonetisation on 08.11.2016 the cash available with the assessee amounting to Rs. 8,00,000/- was deposited in the joint bank account of the 6. That the Ld. CIT(A) has grossly erred while upholding the additions, without appreciating the fact that section 69A and 6 section 115BBE are not at all applicable as all the cash deposits are duly explainable and out of legitimate and genuine sources of the assessee.
7. That the appellant craves leave to add OR amend the grounds of appeal
before the appeal is finally heard and disposed off.
3. Though numerous grounds have been raised by the Assessee but, at the very outset, during the course of hearing before the Bench, the Ld. AR has raised the legal ground that the notice u/s 148 of the Income Tax Act, 1961 (in short 'the Act') was issued by the Jurisdictional Assessing Officer whereas, the same is required to be issued by the Faceless Assessing Officer and since this is jurisdictional error, therefore, the entire assessment order and the appellate proceedings are required to be quashed being lack of jurisdiction. The Ld. AR has drawn our attention to the notice dated 31.3.2023, issued by Shri Piare Lal Sharma, Ward 11, Shimla, and another notice dated 8.4.2023, also issued by Piare Lal Sharma. It was submitted that, as per the CBDT notification issued by the Board in 2022 under Section 144B of the Act, the notice in respect of Sections 147/148 is required to be issued by a Faceless Assessing Officer. The ld. AR has also relied on the decision in the case of ‘Sham Chand v ITO’ in and in the case of ‘The Biripur Primary Agriculture Jind vs ITO, Jind, both orders dated 27.8.2025, wherein on similar facts, the appeal of the Assessee was allowed.
4. Per contra, ld. DR has relied on the order of the authorities below.
I have heard the rival submissions and perused the material available on record. I find that the issue raised is squarely covered by the aforesaid decisions of the Tribunal. The relevant part of the order dt. 27.8.2025 in the case of Shri Shyam Chand vs ITO (supra) is reproduced as under: -
We find that an identical issue was decided by this Bench in with C.O. No.41/CHD/2024. The finding of the Tribunal read as under:
“6. We have duly considered the rival contentions and gone through the record carefully. Admittedly, notice under Section 148 was issued after the Notification issued by the Ministry of Finance, Government of India on 29.03.2022. The notice under Section 148 has been issued on 29.03.2023 i.e. almost one year from the Notification. Thus, facts of other year are squarely applicable. The issue in dispute is covered by the judgement of Hon'ble jurisdictional High Court which read as under : “DEEPAK SIBAL, J. (Oral)
Challenge made through the instant petition is to the notice dated 01.03.2025 (Annexure P-l) issued to the petitioner by the respondents tinder Section 148 of the Income Tax Act, 1961. The primary ground of challenge raised by the petitioner is that the impugned notice has been issued by the Jurisdictional Assessing Officer which could not have been done because in terms of the notification dated 29.03.2022 (Annexure P-2), issued by the Ministry of Finance. Government of India, the impugned notice could have been issued only by way of faceless assessment.
In support of his afore submission, learned counsel for the petitioner places reliance on the following two judgments of this Court:- i. CWP-15745-2024, titled Jatinder Singh Bhangu Vs. Union of India and others, decided on 19.07.2024; and ii. CWP-21509-2023, titled Jasjit Singh Vs. Union of India and others, decided on 29.07.2024.
Learned counsel for the respondents does not dispute the fact that the case of the petitioner is covered in his favour by the law laid down through the aforesaid two judgments rendered by two different co-ordinate Benches of this Court in Jatinder Singh Bhangu and Jasjit Singh’s case (supra). . 4. In the light of the above, in terms of the law laid down in Jatinder Singh Bhangu's and Jasjit Singh's cases (supra) the impugned notice dated 01.03.2025 (Annexure P-1) issued by the Jurisdictional Assessing Officer, is hereby quashed with liberty to the respondents to proceed against the petitioner in accordance with law. 5. The petition is allowed in the above terms.
[DEEPAK SIBAL] JUDGE [ LAPITA BANERJI] 30.04.2025 JUDGE
Respectfully following the judgement of the Hon'ble High Court, we allow the ground of appeal
of Cross Objection and hold that notice issued under Section 148 of the Income Tax Act in assessment year 2019-20 is bad in the eyes of law. It was without jurisdiction. Accordingly, re-assessment order is quashed.”
5. Apart from this order, there are large number of judgements at the end of the Jurisdictional High Court including in the case of Disha Gupta (supra).
6. Respectfully following the judgement, we quash the re-assessment order because notice u/s 148A(1) was issued on 31.03.2022 as observed by the JAO in the assessment order. Accordingly, this plea of the assessee is allowed and re-assessment order is quashed. The appeal of the assessee is allowed.
7. In the result, appeal of the assessee is allowed.”
I find merit in the submissions made by the Ld. AR of the Assessee and respectfully follow the aforesaid orders of the Tribunal (supra). Resultantly, the appeal of the Assessee stand allowed.
Order pronounced on 17-11-2025. ( LALIET KUMAR ) Judicial Member “आर.के.”