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Facts
The assessee is in appeal against the order of the CIT(A) for assessment year 2019-20. The appeal was filed with a delay of three days, which was condoned. The assessee challenged the reopening of assessment by issuing a notice under Section 148A(d) by the jurisdictional AO.
Held
The Tribunal held that after the notification dated 29.03.2022, all notices for reopening of assessment ought to have been issued by the Faceless Authority (NFAC). The jurisdictional AO could not have issued such notice. Therefore, the notice and subsequent assessment order were not sustainable.
Key Issues
Whether the notice for reopening of assessment issued by the jurisdictional AO is sustainable when the scheme of faceless assessment is applicable and requires issuance by NFAC as per statutory provisions and notifications.
Sections Cited
148A, 148, 151A, 144B
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Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL
O R D E R PER RAJPAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 12.08.2024 passed for assessment year 2019-20. 2. The Registry has pointed out that appeal is time barred by three days. On due consideration of the A.Y.2019-20 2 application for condonation of delay, we condone this small delay of three days and proceed to decide the appeal on merit.
The assessee has raised an additional ground of appeal vide which it has challenged the re-opening of an assessment by issuance of a notice under Section 148A(d) of the Act by the jurisdictional AO. According to him, it ought to have been issued by Faceless A.O.
The ld. Counsel for the assessee, at the very outset submitted that issue in dispute is squarely covered by the judgement of Hon'ble jurisdictional High Court rendered in the case of the assessee for assessment year 2021-22 and Writ Petition No. 2251 of 2025. He placed on record copy of the decision dated 28.01.2025. He further relied upon the judgement of Hon'ble jurisdictional High Court in the case of Jatinder Singh Bhangu CWP-15745/2024. He placed on record copy of this judgement also. According to this judgement of Hon'ble jurisdictional High Court, after issuance of a Notification dated 29.03.2022, all the notices for re-opening of the assessment ought to have been issued A.Y.2019-20 3 by NFAC. The jurisdictional AO could not have issued notice for re-opening of the assessment. The relevant finding of the Hon'ble High Court in the case of Jatinder Bhangu read as under :
The respondent during the course of arguments vehemently and vigorously pleaded that notice under Section 148 can be issued by Jurisdictional Assessing Officer. In support of his contention, they heavily relied upon office memorandum dated 2').02.2023 and letter dated 19.01.2024 issued by Directorate of Income Tax (System).
From the perusal of Section 151 A. 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 arc heavily placing reliance upon office memorandum and letter issued by departmental authorities. It is axiomatic intax 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 readwith 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. A.Y.2019-20 4
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.
In assessment year 2021-22, notice under Section 148A(d) was issued to the assessee on 12.03.2024. Hon'ble High Court quashed this notice by following the judgement in the case of Shri Jatinder Singh Bhangu. We find that in present assessment year, notice under Section 148 has been issued on 29.03.2023. The notification vide which Face Less Authority was required to issue notice, came on 29.03.2022. Thus, the JAO has issued notice under Section 148(A)(D) after this notification which is not sustainable in view of the judgement of Hon'ble jurisdictional High Court. Accordingly, we allow the jurisdictional grounds of appeal and quash the notice issued under Section 148A(d)/148. Consequently, no assessment order is sustainable. Accordingly, we quash the assessment order dated 30.01.2024 passed in assessment year 2019-20. The impugned order of the ld. CIT(A) is consequently not sustainable. Accordingly, we A.Y.2019-20 5 allow the appeal and set aside both the impugned orders.
In the result, the appeal is allowed.