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Facts
These are cross-appeals for AY 2018-19 arising from an assessment framed under Section 147 after a search action. The Jurisdictional Assessing Officer (JAO) issued a notice under Section 148 for reopening the case, leading to additions under Section 69 read with Section 115BBE, which were partly confirmed by CIT(A). The assessee raised an additional legal ground challenging the validity of the reopening initiated by the JAO instead of a Faceless Assessing Officer (FAO).
Held
The Tribunal held that the notice under Section 148, having been issued by the Jurisdictional Assessing Officer (JAO) on 06-04-2022 instead of a Faceless Assessing Officer (FAO), violated Section 151A and CBDT Notification No.18/2022. Citing the Punjab & Haryana High Court decisions in *Jatinder Singh Bhangu* and *Om Satya Overseas*, the Tribunal quashed the impugned notice and the subsequent assessment order, rendering the assessee's appeal allowed and the revenue's appeal infructuous.
Key Issues
Whether assessment proceedings initiated by a notice under Section 148 issued by a Jurisdictional Assessing Officer (JAO) are valid when Section 151A read with CBDT Notification mandates issuance by a Faceless Assessing Officer (FAO).
Sections Cited
147, 132(1), 148A(b), 148A(d), 148, 69, 115BBE, 151A, 151A(1), 151A(2), 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH
Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा�रण वष� / Assessment Year: 2018-19) DCIT-Central Circle-3 M/s Seth Industrial Corporation बनाम/ Aaykar Bhawan, Rishi Nagar 80-A, Industrial Estate Vs. Ludhiana – 141001 Ludhiana, Punjab - 141003 �ायीलेखासं./जीआइआरसं./PAN/GIR No. AAKFS-2622-J (अपीलाथ�/Appellant) (��थ� / Respondent) : & 2. आयकर अपील सं. / (िनधा�रण वष� / Assessment Year: 2018-19) M/s Seth Industrial Corporation DCIT-Central Circle-3 बनाम/ 80-A, Industrial Estate Aaykar Bhawan, Rishi Nagar Vs. Ludhiana, Punjab - 141003 Ludhiana – 141001 �ायीलेखासं./जीआइआरसं./PAN/GIR No. AAKFS-2622-J (अपीलाथ�/Appellant) (��थ� / Respondent) : Assessee By : Shri Tej Mohan Singh (Advocate) – Ld. AR Revenue By : Smt. Geetinder Mann (CIT) – Ld. DR सुनवाईकीतारीख/Date of Hearing : 16-10-2025 घोषणाकीतारीख /Date of Pronouncement : 16/10/2025 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)-5, Ludhiana [CIT(A)] dated 18-07-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 147 of the Act on 24-08-2023. The assessee is stated to be engaged in manufacturing of bicycles. The assessee filed return of income on 03-09-2018. However, the assessee- group was subjected to search action u/s 132(1) on 21-10-2021. Based on search findings, notice u/s 148A(b) was issued by Jurisdictional Assessing Officer (JAO) of the assessee on 24-03-2022 proposing reopening of the case of the assessee. The Ld. JAO, not satisfied with assessee’s reply, issued notice u/s 148 on 06-04-2022 after passing an order u/s 148A(d). The assessee filed return of income and finally, Ld. AO made twin additions of Rs.130 Lacs and Rs.21.58 Lacs u/s 69 r.w.s. 115BBE in assessment order dated 24-08-2023. Upon further appeal, Ld. CIT(A) deleted the addition of Rs.21.58 Lacs in full but retained part addition of Rs.45.25 Lacs out of addition of Rs.130 Lacs. Aggrieved, the assessee as well as revenue is in further appeal before us.
The Ld. AR, at the outset, raised pertinent legal ground by way of additional ground 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 06-04-2022 which is kept on Page No.65 of the paper-book. This notice has been issued by Tarun Sharda, DCIT, Central Circle-3, 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 06-04-2022 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.