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Facts
The Revenue appealed an order of the CIT(A) which deleted additions made by the AO. The assessee filed a Cross Objection challenging the validity of the notice issued under Section 148. The preliminary objection was based on a notification dated 29.03.2022 requiring notices to be issued by a Faceless Authority.
Held
The Tribunal held that the notice issued under Section 148 by the jurisdictional AO was bad in law as it was issued without jurisdiction, following various High Court judgments. Consequently, the reassessment order was quashed.
Key Issues
Whether a notice issued under Section 148 by a jurisdictional AO after the effective date of the notification requiring issuance by a Faceless Authority is legally sustainable.
Sections Cited
147, 148, 148A, 151A, 132(1)
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Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL
आयकर अपील�य अ�धकरण,च�डीगढ़ �यायपीठ, च�डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ �नधा�रण वष� / Assessment Year: 2019-20 The DCIT, Mani Ram Balwant Rai, HUF, Central Circle-3, Vs Civil Lines, Opposite Session Court(Old) Kitchlu Nagar, Ludhiana. Ludhiana. �थायी लेखा सं./PAN NO: AAGHM1535C अपीलाथ�/Appellant ��यथ�/Respondent & C.O. 43/CHD/2024 in आयकर अपील सं./ �नधा�रण वष� / Assessment Year: 2019-20 Mani Ram Balwant Rai, HUF, The DCIT, Civil Lines, Opposite Session Court(Old) V Central Circle-3, Ludhiana. s Kitchlu Nagar, Ludhiana. �थायी लेखा सं./PAN NO: AAGHM1535C अपीलाथ�/Appellant ��यथ�/Respondent Revenue by : Smt. Kusum Bansal, CIT DR Assessee by : Shri Pankaj Bhalla, CA and Shri Hunny Bajaj, Advocate Date of Hearing : 17.07.2025 Date of Pronouncement : 01.09.2025 HYBRID HEARING O R D E R PER RAJPAL YADAV, VP
The Revenue is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in & C.O. 43/CHD/2024 A.Y.2019-20 2 short ‘the CIT (A)’] dated 19.07.2024 passed for assessment year 2019-20.
2. On receipt of notice in the appeal of Revenue, assessee has filed Cross Objection bearing No. 43/CHD/2024.
3. In the Cross Objection, assessee has raised seven grounds of objections but its preliminary objection is that Central Government on 29.03.2022 issued a Notification in exercise of the powers conferred by sub-section (1) and (2) of Section 151A of the Income Tax Act. According to this Notification, the notices for re-opening were required to be issued by the Faceless Authority instead of jurisdictional AO. In the present case, 148 notice has been issued on 29.03.2022 by jurisdictional AO instead of Faceless AO, hence, this assessment order is not sustainable in the eyes of various judgements passed by the Hon'ble jurisdictional High Court. He made reference to Writ Petition No.21509 of 2023 in the case of Shri Jasjeet Singh Vs Union of India, Shri Jatinder Singh Bhangu Vs Union of India & others, CWP No. 15745 of 2024 and other judgements which are being placed on record by the ld. counsel for the assessee.
& C.O. 43/CHD/2024 A.Y.2019-20 3
Since in the Cross Objection, assessee has taken preliminary issues, therefore, we take Cross Objection first for adjudication.
The brief facts of the case are that assessee is a HUF. It has been drawing income from business and profession and house property income. It has filed its return of income on 20.05.2020 declaring total income of Rs.87,25,340/- for assessment year 2019-20. According to the AO, assessee belongs to Mani Ram Balwant Rai Group of Ludhiana where a search u/s 132(1) was carried out at the residential/business premises of Mani Ram Balwant Rai on 24.11.2022. A warrant was executed in the name of the assessee also. According to the AO, the case of the assessee was selected for scrutiny assessment for assessment year 2019-20 u/s 147 of the Income Tax Act and accordingly, a notice u/s 148A was issued on 29.03.2023. The AO has passed the assessment order on 28.03.2024.
Dissatisfied with the assessment order, assessee carried the matter in appeal. The ld. CIT (Appeals) has deleted the addition of Rs.4,78,10,004/- made by the AO. Similarly, ld. & C.O. 43/CHD/2024 A.Y.2019-20 4 CIT (Appeals) has deleted the addition of Rs.50,20,050/-. These deletion of additions are being challenged by the Revenue in its four grounds of appeal
. As observed earlier, assessee in its Cross Objection has been challenging the very issuance of a notice u/s 148 by the jurisdictional AO after the notification of the Central Government issued on 29.03.2022 u/s 151A sub-section (1) and (2) of the Income Tax Act. The ld. counsel for the assessee has filed brief synopsis of his arguments. We take relevant part of his submissions which read as under : D.5 That the provisions of Section 151A of the Act inserted by the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Act, 2020, w.e.f., 01.11.2020 have a relevant bearing on the validity of the Statutory Notice issued u/s 148 of the Act dated 29.03.2023. Further, the Central Government issued notification dated 29.03.2022 for the purposes of giving effect to the provisions of Section 151A of the Act, a true copy of notification dated 29.03.2022 for the purposes of giving effect to the provisions of Section 151A is at compilation of case laws page no.
7. D.6 That relevant provisions of Income Tax Act, 1961 are being reproduced herein below for ready reference of this Hon'ble Court: Section 151 A. Section - 151A, Income-tax Act, 1961 – FA 2023 [Faceless assessment of income escaping assessment.] 151 A. (1) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of assessment, reassessment or re- computation under section 147 or issuance of notice under section 148 81 [or conducting of enquiries or issuance of show-cause notice or passing of order under section 148A] or sanction for issue of such notice under section 151, so as to impart greater efficiency, transparency and accountability by— (a) eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible; & C.O. 43/CHD/2024 A.Y.2019-20 5 (b) optimising utilisation of the resources through economies of scale and functional specialisation; (c) introducing a team-based assessment, reassessment, re-computation or issuance or sanction of notice with dynamic jurisdiction. (2) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification: Provided that no direction shall be issued after the 31st day of March, 2022. (3) Every notification issued under sub-section (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.] [Sanction for issue of notice.
Specified authority for the purposes of section 148 and section 148A shall be,— (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or [***] Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year:] [Provided that the period of three years for the purposes of clause (i) shall he computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub- section (1) of section 149] That with aforesaid facts and legal position, It is prayed before this Hon'ble Bench for setting aside and quashing the impugned Statutory Notice u/s 148 dated 29.03.2023 and consequential impugned assessment order dated 28.03.2024 along with Demand Notice dated 28.03.2024 being without jurisdiction, illegal, contrary to the statutory provisions and CBDT Circular, thus, unsustainable in law, inter-alia on the following legal grounds without prejudice to each other: D.7 Because the impugned Statutory Notice issued u/s 148 of the Act dated 29.03.2023 passed by the Ld. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3,LUDHIANA, Jurisdictional Assessing Officer, himself is illegal in view of the Notification issued by the Central Government i.e. Notification No. 18/2022/F. No. 370142/16/2022-TPL (Part 1), dated 29.03.2022 which states that the Notice u/s 148 of the Act shall be issued through automated allocation only and the Ld. Jurisdictional Assessing Officer is not at all legally competent to issue 148 Notice itself and the 148 Notice was required to be issued by the National Faceless Assessment Centre. D.8 Heavy Reliance is being placed on the Judgment of Jurisdictional Hon'ble Court of Punjab and Haryana in the case of 'Jasjit Singh Vs. UOI & others', CWP No. 21509 of 2023, dated 29.07.2024, and in the case of & C.O. 43/CHD/2024 A.Y.2019-20 6 'Jatinder Singh Bhangu Vs. UOI & Ors.', CWP No. 15745 of 2024, dated 19.07.2024, wherein under similar circumstances Hon'ble Court has quashed the 148 Notices issued by the Jurisdictional Assessing Officer and also quashed the consequential assessment order along with Demand Notice. D.9 The Jurisdictional High Court of Punjab and Haryana has concurred with the view of Hon'ble Telangana High Court in the case of Kankanala Ravindra Reddy Vs. ITO, [2023] 156 taxmann.com 178 (Telangana), with Hon'ble Gauhati High Court in the case of Ram Narayan Sah Vs. UOI, [2024] 163 taxmann.com 478 (Gauhati HC) and with Hon'ble Bombay High Court in the case of Hexaware Technologies Limited, Vs. ACIT, Mumbai, (2024) 464 ITR 430 (Bombay HC). D.10 Further, your honour's attention is respectfully drawn to the decision of this Hon'ble Bench in the case of Sh. Aman Batra (ITA No. 1040/CHD/2024), who belongs to the same assessee group, i.e., Mani Ram Balwant Group. In the said case, the Hon'ble Bench dealt with an identical issue and held as under: 7. 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.
8. Though the Revenue has raised a number of issues on merits in its appeal, but we have quashed the re-assessment order, therefore, all the issues become academic in nature at this stage. We have quashed the assessment order on the strength of number of judgements rendered by Hon 'ble jurisdictional High Court, which is a view unanimously taken by other Hon'ble High Courts also. Therefore, we do not deem it necessary to consider other issues on merit.
9. In the result, appeal of the Revenue is dismissed and Cross Objection of the assessee is allowed.”
7. With the assistance of ld. Representative, we have gone through the record carefully. We find that this issue has emerged up in a large number of cases and this Bench has also decided few appeals. In ITA 1040/CHD/2024 and CO 41/CHD/2024 in the case of DCIT Vs Aman Batra, Ludhiana, the Tribunal has observed as under :
& C.O. 43/CHD/2024 A.Y.2019-20 7 “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 & C.O. 43/CHD/2024 A.Y.2019-20 8
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.”
8. Respectfully following the judgement of the jurisdictional High Court in the case of Shri Jatinder Singh Bhangu Vs Union of India CWP No. 15745 of 2024 and other appeals, we are of the view that notice issued by the jurisdictional AO u/s 148 of the Income Tax Act is not sustainable, hence, consequential assessment is not valid. Accordingly, we allow this preliminary objection and quash the re-assessment order.
Since re-assessment itself has been quashed, therefore, appeal of the Department would be treated as dismissed.
In the result, Cross Objection filed by the assessee is allowed and appeal of the Revenue is dismissed.
Order pronounced on 01.09.2025.