INCOME TAX OFFICER, WARD-8(1), HYDERABAD vs. DAGUMATI SWATHI, HYDERABAD

Facts

The Revenue appealed against the order of the CIT(A) which had quashed the reassessment proceedings. The AO had initiated reassessment under Section 147 based on substantial cash deposits by the assessee. The CIT(A) quashed the proceedings, holding that the notices were issued without jurisdiction after the introduction of the Faceless Assessment Scheme.

Held

The Tribunal held that the reassessment proceedings were initiated by the Jurisdictional Assessing Officer (JAO) outside the faceless mechanism, which is contrary to the 'Faceless Jurisdiction of the Income Tax Authorities Scheme, 2022' and 'e-Assessment Scheme of Income Escaping Assessment Scheme, 2022'. The issue was squarely covered by the judgment of the Hon'ble High Court of Telangana, which held that only the Faceless Assessing Officer (FAO) can issue such notices. Thus, the reassessment proceedings were invalid and void.

Key Issues

Whether reassessment proceedings initiated by a Jurisdictional Assessing Officer (JAO) after the introduction of the Faceless Assessment Scheme are valid, or if they must be issued by the Faceless Assessing Officer (FAO) as per the prescribed scheme.