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Facts
The appeals arose from an assessment order wherein the Assessing Officer (AO) made an addition of Rs. 29.69 Crores for alleged bogus purchases. The CIT(A) estimated an addition of 9%. The assessee and revenue are in further appeal.
Held
The Tribunal held that the notice u/s 148 was issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO), which is contrary to the provisions of Section 151A and CBDT Notification No. 18/2022. Such a notice vitiates the assessment proceedings.
Key Issues
Whether a notice issued under Section 148 by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer, as mandated by CBDT Notification, vitiates the assessment proceedings.
Sections Cited
147, 144B, 148, 151A
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Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH
Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid cross-appeals for Assessment Year (AY) 2018-19 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 03-03- 2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s 144B of the Act on 21-03-2024. The sole issue that arises for our consideration is addition of alleged bogus purchases for Rs.29.69 Crores as made by Ld. AO in the assessment order for purchases made by the assessee from four parties as tabulated on Page-2 of the assessment order. The Ld. CIT(A) has estimated addition of 9% against the same. Aggrieved, the assessee as well as revenue is in further appeal before us. 2. The Ld. AR, at the outset, raised pertinent legal ground by way of ground no.1 and stated that reopening is bad-in-law and in derogation of the provisions of Sec.151A read with CBDT Notification No.18/2022 dated 29-03-2022 which mandate issuance of such notice by Faceless Assessing Officer (FAO) only. The Ld. AR asserted that in terms of ratio of various decisions of jurisdictional High Court, issuance of notice u/s 148 by Jurisdictional Assessing Officer (JAO) instead of Faceless Assessing Officer (FAO) would vitiate the entire assessment proceedings. The Ld. AR referred to notice issued by Ld. AO u/s 148 on 07-04-2022 which is kept on Page No.11 of the paper-book. This notice has been issued by Shri Jatin Abbi, Circle-1, Ludhiana who happens to be Jurisdictional Assessing Officer (JAO) of the assessee. The CIT-DR could not controvert the said position but stated that the matter is under consideration before Hon’ble Supreme Court.
The undisputed fact that emerges is that notice u/s 148 has been issued on 07-04-2022 by Jurisdictional Assessing Officer (JAO) instead of Faceless Assessing Officer (FAO). This notice, in terms of notification of the Central Government dated 29-03-2022 u/s 151A sub-section (1) and (2) of the Income Tax Act, was required to be issued by FAO. The failure to do so would vitiate the assessment proceedings as per the lead decision of Hon’ble High Court of Punjab & Haryana in the case of Jatinder Singh Bhangu (165 Taxmann.com 115; dated 19-07-2024), the substantive portion of which read as under: - 15. From the perusal of Section 151A, it is quite evident that scheme of faceless assessment is applicable from the stage of show cause notice under Section 148 as well as 148A. Clause 3 (b) of notification dated 29.03.2022 issued under Section 151A clearly provides that scheme would be applicable to notice under Section 148. Even otherwise, it is a settled proposition of law that assessment proceedings commence from the stage of issuance of show cause notice. The object of introduction of faceless assessment would be defeated if show cause notice under Section 148 is issued by Jurisdictional Assessing Officer. The respondents are heavily placing reliance upon office memorandum and letter issued by departmental authorities. It is axiomatic in tax jurisprudence that circulars, instructions and letters issued by Board or any other authority cannot override statutory provisions. The circulars are binding upon authorities and Courts are not bound by circulars. The mandate of Section 144B, 151A read with notification dated 29.03.2022 issued thereunder is quite lucid. There is no ambiguity in the language of statutory provisions, thus, office memorandum or any other instruction issued by Board or any other authority cannot be relied upon. Instructions/circulars can supplement but cannot supplant statutory provisions.
In the wake of above discussion and findings, we find it appropriate to subscribe view expressed by Bombay, Telangana and Gauhati High Court. The instant petitions deserve to be allowed and accordingly allowed.
The notices issued by Jurisdictional Assessing Officer under Section 148 are hereby quashed with liberty to respondent to proceed in accordance with procedure prescribed by law.