Loading judgment…
Facts
The assessee purchased an immovable property and made a cash payment of Rs. 40,00,000/-. Consequently, a show cause notice under Section 148A(b) and a subsequent notice under Section 148 for A.Y. 2019-20 were issued by the Jurisdictional Assessing Officer (ITO Ward-1, Nabha) on 30/03/2023. The assessee filed an additional ground of appeal challenging the validity of the Section 148 notice, arguing it was issued without jurisdiction.
Held
The Tribunal admitted the additional legal ground and, following decisions of the Hon'ble Punjab & Haryana High Court and Coordinate Benches, held that the Section 148 notice issued by the Jurisdictional AO on 30/03/2023 was bad in law and without jurisdiction. This was because such notices, post the CBDT notification dated 29/03/2022, ought to have been issued by the Faceless Assessment Unit as per Section 144B and Section 151A of the Income Tax Act. The re-assessment order was accordingly quashed.
Key Issues
Whether the reassessment proceedings initiated under Section 148 by the Jurisdictional Assessing Officer were bad in law and void ab initio, given the mandatory procedure prescribed under Section 144B and Section 151A for faceless assessment, post-CBDT Notification No. 18/2022 dated 29/03/2022.
Sections Cited
148, 148A(b), 148A(d), 144B, 151A
AI-generated summary — verify with the full judgment below
आयकर अपीलीय अिधकरण,च"डीगढ़ "यायपीठ “एस.एम.सी” , च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCHES, “SMC” CHANDIGARH HEARING THROUGH: HYBRID MODE "ी िव"म "सह यादव, लेखा सद"य BEFORE: SHRI. VIKRAM SINGH YADAV, AM आयकर अपील सं./ िनधा"रण वष" / Assessment Year : 2019-20 Ashita Garg बनाम JAO The ITO 06, Preet Vihar, Mehs Gate Ward, Nabha Nabha, Punjab-147201 "ायी लेखा सं./PAN NO: ANAPG6827A अपीलाथ"/Appellant ""यथ"/Respondent िनधा"रती क" ओर से/Assessee by : Miss Pallavi, Advocate and Shri Sudhir Sehgal, Advocate (Virtual) राज"व क" ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई क" तारीख/Date of Hearing : 13/08/2025 उदघोषणा क" तारीख/Date of Pronouncement : 18/08/2025 आदेश/Order
PER VIKRAM SINGH YADAV, AM
This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 18/03/2025 pertaining to A.Y 2019-20.
2. At the outset, the Ld. AR submitted that the assessee has moved a prayer for admission of the following additional ground of appeal:
Notwithstanding the original grounds of appeal, the reassessment proceedings initiated under section 148 of the Income Tax Act, 1961 are bad in law and void ab initio, as the notice under section 148 was issued by the Jurisdictional Assessing Officer (JAO) instead of the National Faceless Assessment Centre (NFAC), which is in violation of the mandatory procedure prescribed under Section 144B and Section 151A of the Act, vide notification No. CBDT Notification No. 18/2022/F. No. 370142/16/2022-TPL Part1 dated 29/03/2022 and as clarified by the Hon’ble Punjab & Haryana High Court in the case of Jatinder Singh Bhangu Singh Vs. Union of India (W.P. No. 15745 of 2024 dt. 19/07/2024.
3. It was submitted that all the facts are borne out from the order of the AO and no fresh facts are to be investigated and the additional ground being purely legal ground, the same may be admitted in light of the decision of Hon’ble Supreme Court in case of National Thermal Power Co. Ltd. Vs. CIT reported in 229 ITR 383.
4. The Ld. DR has been heard who has not raised any specific objection for admission of the additional ground of appeal
5. The additional ground so sought to be raised being purely legal in nature, the same is hereby admitted for necessary adjudication following the decision of Hon’ble Supreme Court in case of National Thermal Power Co. Ltd.
6. In this regard, the Ld. AR further submitted that basis certain information that the assessee has purchased certain immovable property and has made cash payment of Rs. 40,00,000/-, a show cause was issued under section 148A(b) of the Act by ITO Ward-1, Nabha on 02/03/2023 as to why notice under section 148 should not be issued on the basis of information that income chargeable to tax has escaped assessment. In response, the assessee filed her submission and thereafter, order under section 148A(d) was passed on 30/03/2023 and on the same date i.e, 30/03/2022, notice under section 148 was issued by ITO, Ward, Nabha being the jurisdictional AO.
7. It was submitted that the notice so issued under section 148 was in clear contravention of the mandatory requirement of faceless proceedings stipulated under the Income Tax Act post issuance of Notification by the Ministry of Finance, Government of India dt. 29/03/2022 under Section 144B of the Act. It was submitted that after issuance of the said notification on 29/03/2022, the notice under section 148 ought to have been issued by the Faceless Assessment Unit and not by the Jurisdictional AO. It was accordingly submitted that the notice so issued under section 148 has clearly been issued without jurisdiction. In this regard, our reference was drawn to the decision of Coordinate Bench in case of DCIT Vs Shri Aman Batra (in and C.O. No. 41/Chd/2024 dt. 13/05/2025) wherein the Coordinate Bench following the decision of Hon’ble Punjab & Haryana High Court has held that the notice issued under section 148 is bad in the eyes of law. In this regard, the relevant finding of the Coordinate Bench 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 : “1. 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).
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.
The petition is allowed in the above terms.”
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.”