DCIT, HISAR vs. TAYAL SONS PVT. LTD., HISAR

(A.Y. 2019-20) Tayal Sons Private Vs DCIT Limited Income Tax Office, Sesctor14, 653A, Kath Mandi Road, Hisar, Hisar, Haryana PAN: AABCT6693E Appellant Respondent (A.Y. 2018-19) ITA No. 3467/DEL/2025 (A.Y. 2019-20) DCIT Vs Tayal Sons Private Limited Income Tax Office, 653A, Kath Mandi Road, Hisar, Sesctor14, Hisar, Haryana. PAN: AABCT6693E Appellant Respondent Assessee by Sh. Sh. Salil Kapoor, Adv, Ms. Ananya Kapoor, Adv, Ms. IshitaFarsiya, Adv, Ms. Soumya Singh, Adv& Ms. SakshiRustagi. Revenue by Ms. Amisha S. Gupt, CIT (DR) Date of Hearing 27/11/2025 Date of Pronouncement 28/11/2025 ORDER

PER YOGESH KUMAR, U.S. JM:

2. The Ld. Assessee's Representative at the outset submitted that notices dated 11/03/2022 for Assessment Year 2018-19 and notice dated 08/03/2023 issued u/s 148A(b) of the Income Tax Act, 1961 ('Act' for short) by the Jurisdictional A.O. and the order dated 29/03/2022 and 27/03/2023 u/s 148A(b) of the Act are bad in law.

Therefore submitted that the consequential assessment orders deserves to be set aside. The Ld. Counsel has also relied on the order of the Co-ordinate Bench of the Tribunal in the case of Chirag Kirpal dated 30/09/2025 and also the Judgment of Jurisdictional High Court i.e. High Court of Punjab and Haryana in CWP-15745-2-24 in the case of Jatinder Singh Bhangu Vs. Union of India vide Judgment dated 19/07/2024.

3. Per contra Ld. DR submitted that as against the Order of the Tribunal and the Judgment of the Jurisdictional High Court relied by the A.R., the Revenue preferred Appeals. Therefore submitted that the present Appeals requires to be dismissed or kept in abeyance. Further submitted that Assessments have been framed and additions have been made on its merits in order to recover the actual tax due from the Assessee, thus sought for dismissal of the Appeals of the Assessee.

5. The Co-ordinate Bench of the Tribunal in the case of ChiragKirpal Vs. ACIT (supra), while deciding the similar issue, considered various judicial precedents and also the CBDT Circular and quashed the notice issuedby the Jurisdictional Assessing Officer u/s 148 of the Act in following manners:-

“4. It is not in dispute that the notice under section 148 of the Act dated 29-3-2023 has been issued by ITO (International Taxn), Gurgoan to the assessee for the assessment year 2016-17 who is the Jurisdictional Assessing Officer (JAO). Now, the short point that arises for our consideration is under the faceless regime, whether the reassessment notice under section 148 of the Act which enables the assessing officer to assume jurisdiction could be issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer (FAO) and whether the non-issuance of the statutory notice by the FAO would vitiate the entire reassessment proceedings. The provisions of section 151 A of the Act mandates that the notice under section 148 of the Act could be issued by the faceless authority only and not by the Learned JAO. The plain reading of section 151 A read with section 144B of the Act makes it very clear in this regard. Hence, the Learned JAO was divested of any authority to issue the notice under section 148 of the Act. This was also endorsed by the CBDT vide Notification dated 29-3-2022. The assessee herein falls under the jurisdiction of Hon‘ble Punjab and Haryana High Court. The issuance of notice by the JAO instead of FAO was subject matter of adjudication by the Hon‘ble Jurisdictional High Court in the case of Jatinder Singh Banghu and JyotiSareenvs Union of India and others reported in 466 ITR 474 (P&H) vide order dated 19-7-2024. We find that the Hon‘ble Punjab and Haryana High Court, being the Jurisdictional High Court for the assessee herein, by following the decision of Hon‘ble Bombay High Court in the case of Hexaware Technology Ltd vs ACIT reported in 464 ITR 430 (Bom); decision of Hon‘ble Telangana High Court in the case of KankanalaRavindra Reddy vs ITO reported in 156 Taxmann.com 178(Tel HC); decision of Hon‘ble Gauhati High Court in the case of Ram Narayan Sahvs Union of India reported in 163 Taxmann.com 478 (Gau HC) and after considering the decision of Hon‘ble Calcutta High Court in the case of Triton Overseas Private Ltd vs Union of India reported in 156 Taxmann.com 318(Cal HC) [which has been heavily relied upon by the Learned DR before us], held that notice under section 148 of the Act issued by the Jurisdictional Assessing Officer to be bad in law as it is not in consonance with the provisions of section 151A read with Clause 3(b) of CBDT Notification dated 29-3-2022 and it also defeats the very object of introduction of faceless assessment. Similar observations were made in the subsequent decisions of Hon‘ble Punjab & Haryana High Court in the case of Jasjit Singh vs Union of India and others in CWP No. 21509 of 2023 dated 29- 7-2024 and in the case of Vinay Sharma vs ITO in CWP No. 16228 of 2025 (O&M) dated 29-5-2025.

5. Further we find that the Hon‘ble Telengana High Court in the case of Sri Venkataramana Reddy vs DCIT reported in 468 ITR 181 (Tel) in Writ Petition Nos. 13353, 16141 and 16877 of 2024 dated 24-7-2024 ( which is a case of assessee in International Taxation) had categorically observed that in respect of international taxation charges, notices under section 148 were required to be issued in a faceless manner applying provisions of section 144B and as effected under provisions of section 151A read with scheme notified by Central Government vide CBDT Notification dated 29-3-2022. The relevant observations of Hon‘ble Telengana High Court in the case of Sri Venkataramana Reddy vs DCIT reported in 468 ITR 181 (Tel) are reproduced below:- “23. It is noteworthy that the order of CBDT dated 06.09.2021 deals with "assessment orders". The said order is passed in exercise of power under Section 144B of the Act. The order of CBDT is clear that direction was issued about passing of "assessment orders" by the National Faceless Assessment Centre under Section 144B of the Act except in two situations, one of which is passing of assessment orders in cases assigned to International Tax Charges.

7. The Learned DR apart from relying on the decision of Hon‘ble Calcutta High Court in the case of Triton Overseas P Ltd vs Union of India reported in 156 Taxmann.com 318 (Cal HC) , which had already been considered by the Hon‘ble Punjab & Haryana High Court (being the Jurisdictional High Court) , also placed reliance on the decision of Hon‘ble Delhi High Court in the case of T K S Builders P Ltd vs ITO reported in 469 ITR 657 (Del), wherein it was held that Section 144B of the Act cannot be viewed as exclusive basis for all assessment and reassessment procedures and Jurisdictional Assessing Officer (JAO) cannot be completely deprived of power to assess or reassess merely because section 144B and Faceless Reassessment Scheme 2022 have been introduced. The Learned DR also placed reliance on the decision of Hon‘ble Madras High Court in the case of Mark Studio India (P) Ltd vs ITO reported in 169 taxmann.com 542 (Mad HC), wherein it was observed that National Faceless Assessment Centre (NaFAC) would not have any power of issuance of notice under section 148 or 148A of the Act and would assume jurisdiction for assessment, reassessment or recomputation in cases of income escaping assessment only from stage of issuing notice under section 142(1) or 143(2) of the Act.

8. We find that the Hon‘ble Jurisdictional High Court being the Punjab and Haryana High Court has decided the issue in favour of the assessee and the Hon‘ble Delhi High Court, Hon‘ble Madras High Court and Hon‘ble Calcutta High Court had decided(being the non-Jurisdictional High Courts) had decided the issue against the assessee. As stated Supra, the Hon‘ble Telangana High Court and Hon‘ble Bombay High Court had decided the issue in favour of the assessee. When there is a decision of Hon‘ble Jurisdictional High Court, the same would become a binding precedent for the Tribunal and accordingly we proceed to follow the decision of Hon‘ble Punjab and Haryana High Court reported in 466 ITR 474. For the sake of convenience, the entire order is reproduced below:- ― By this common order, the civil writ petitions 15745-2024 & 15791-2024 are disposed of as issues involved and prayer sought therein are common. For the sake of brevity and convenience, facts are borrowed from CWP- 15745-2024.

2. The petitioner through instant petition under Articles 226/227 of the Constitution of India is seeking following relief:- (i) Issuance of a writ In the nature of prohibition restraining Respondent No.4 from proceeding ahead in pursuance to the intimation dated 21.06.2024 (Annexure P-4) as the initiation of proceedings by Respondent No. 3 by issuing Notice under Section 148 dated 28.03.2024 (Annexure P-2) is without jurisdiction as Respondent No. 3 could not have issued Notice under Section 148 after the introduction of E-Assessment Faceless Scheme and also for the reason that no reasoning has been assigned as to why the case of the petitioner is selected for proceedings under Section 148; (ii) For the issuance of a writ in the nature of certiorari for quashing the Approval dated 22.03.2024 (Annexure P-3) accorded by Respondent No.2 under Section 151 of the Act ibid having been issued without due application of mind and without disclosing any information to the petitioner on the basis of which the proceedings in question have been initiated; and (iii) In the interregnum, further proceedings in pursuance to the notice dated 28.03.2024 (Annexure P-2) issued by Respondent No. 3 may be stayed; and (iv) Issuance of any other appropriate writ, order or direction, which this Hon'ble Court may deem fit and proper in the circumstances of the case.

4. The petitioner is assailing notice dated 28.03.2024 issued under Section 148 and intimation dated 21.06.2024 for assessment in accordance with the procedure prescribed under Section 144B of 1961 Act.

6. Per contra, Mr.Amanpreet Singh, and Mr.Vaibhav Gupta, Standing Counsels for the respondents submit that Gauhati High Court and Telangana High Court have set-aside notice issued under Section 148 by Jurisdictional Assessing Officer without considering office memorandum dated 20.02.2023 issued by Central Board of Direct Taxes (for short 'CBDT'). The Jurisdictional Assessing Officer in terms of circular dated 19.01.2024 issued by Directorate of Income Tax (Systems) can issue notice under Section 148. Calcutta High Court in 'Triton Overseas Private Limited v. Union of India [2023] 156 taxmann.com 318' has formed an opinion contrary to opinion of other High Courts. The respondent vide SLP (Civil) Diary No. 2041/2024 has assailed judgment of Telangana High Court before Supreme Court which has issued notice to opposite side.

9. A Division Bench of Telangana High Court in KankanalaRavindra Reddy (supra) has held that notice under Section 148 cannot be issued by Jurisdictional Assessing Officer. The relevant extracts of the judgment are reproduced as below:- "6. The preliminary objection raised by the petitioner which is being considered as the foremost issue is "whether the impugned order under section 148A (d) as well as the notice under section 148 of the Act could be issued by the local jurisdictional officer, rather than the faceless assessment." The issue in other words was "whether was it not mandatory for the authorities concerned to initiate proceedings pertaining to re-assessment under section 148A and 148 of the Act in a faceless manner, (rather than being proceeded by the local jurisdictional officer), as is envisaged under section 144B as also under section 151A of the Act.

3. Mr.Dutt, learned advocate appearing for the respondents submits that first of all the ground taken by the petitioner is hypertechnical since mode of service does not affect the contents and merit of the notice and secondly that the issuance of the aforesaid impugned notice under Section 148 of the Act is justifiable and sustainable in law in view of the office memorandum dated 20th February, 2023 being F No. 370153/7/2023-TPL issued by the CBDT and particularly paragraph 4 of the said office memorandum upon which she relies is quoted as hereunder: 4. It is also pertinent to note here that under the provisions of the Act both the JAO as well as units under NFAC have concurrent jurisdiction. The Ach does not distinguish between JAO or NFAC with respect to Jurisdiction over a case. This is further corroborated by the fact that under section 144B of the Act the records in a case are transferred back to the JAO as soon as the assessment proceedings are completed. So section 144B of the Act lays down the role of NFAC and the units under it for the specific purpose of conduct of assessment proceedings in a specific case in a particular Assessment Year. This cannot be construed to be meaning that the JAO is bereft of the jurisdiction over a particular assessee or with respect to procedures not falling under the ambit of section 144B of the Act. Since, section 144B of the Act does not provide for issuance of notice under section 148 of the Act, there can be no ambiguity in the fact that the JAO still has the jurisdiction to issue notice under section 148 of the Act."

4. Considering the facts and circumstances of the case and submissions of the parties and in view of the aforesaid circular of the Board, I find no merit in the writ petition being WPO 1566 of 2023 and accordingly the same is dismissed."

under Section 147 of the Act and inapplicable to the issuance of notice under Section 148 of the Act. The Scheme is clearly applicable for issuance of notice under Section 148 of the Act and accordingly, it is only the FAO which can issue the notice under Section 148 of the Act and not the JAO. The argument advanced by respondent would render clause 3(b) of the Scheme otiose and to be ignored or contravened, as according to respondent, even though the Scheme specifically provides for issuance of notice under Section 148 of the Act in a faceless manner, no notice is required to be issued under Section 148 of the Act in a faceless manner. In such a situation, not only clause 3(b) but also the first two lines below clause 3(b) would be otiose, as it deals with the aspect of issuance of notice under Section 148 of the Act. Respondents, being an authority subordinate to the CBDT, cannot argue that the Scheme framed by the CBDT, and which has been laid before both House of Parliament is partly otiose and inapplicable. The argument advanced by respondent expressly makes clause 3(b) otiose and impliedly makes the whole Scheme otiose. If clause 3(b) of the Scheme is not applicable, then only clause 3(a) of the Scheme remains. What is covered in clause 3(a) of the Scheme is already provided in Section 144B (1) of the Act, which Section provides for faceless assessment, and covers assessment, reassessment or recomputation under Section 147 of the Act. Therefore, if Revenue's arguments are to be accepted, there is no purpose of framing a Scheme only for clause 3(a) which is in any event already covered under faceless assessment regime in Section 144B of the Act. The argument of respondent, therefore, renders the whole Scheme redundant. An argument which renders the whole Scheme otiose cannot be accepted as correct interpretation of the Scheme. The phrase "to the extent provided in Section 144B of the Act" in the Scheme is with reference to only making assessment or reassessment or total income or loss of assessee. Therefore, for the purposes of making assessment or reassessment, the provisions of Section 144B of the Act would be applicable as no such manner for reassessment is separately provided in the Scheme. For issuing notice, the term "to the extent provided in Section 144B of the Act" is not relevant. The Scheme provides that the notice under Section 148 of the Act, shall be issued through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in Section 148 of the Act and in a faceless manner. Therefore, "to the extent provided in Section 144B of the Act" does not go with issuance of notice and is applicable only with reference to assessment or reassessment. The phrase "to the extent provided in Section 144B of the Act" would mean that the restriction provided in Section 144B of the Act, such as keeping the International Tax Jurisdiction or Central Circle Jurisdiction out of the ambit of Section 144B of the Act would also apply under the Scheme. Further the exceptions provided in sub-section (7) and (8) of Section 144B of the Act would also be applicable to the Scheme. 37 When an authority acts contrary to law, the said act of the Authority is required to be quashed and set aside as invalid and bad in law and the person seeking to quash such an action is not required to establish prejudice from the said Act. An act which is done by an authority contrary to the provisions of the statue, itself causes prejudice to assessee. All assessees are entitled to be assessed as per law and by following the procedure prescribed by law. Therefore, when the Income Tax Authority proposes to take action against an assessee without following the due process of law, the said action itself results in prejudice to assessee. Therefore, there is no question of petitioner having to prove further prejudice before arguing the invalidity of the notice. 38 With respect to the Office Memorandum dated 20 th February 2023, the said Office Memorandum merely contains the comments of the Revenue issued with the approval of Member (L&S) CBDT and the said Office Memorandum is not in the nature of a guideline or instruction issued under Section 119 of the Act so as to have any binding effect on the Revenue. Moreover, the arguments advanced by the Revenue on the said Office Memorandum dated 20th February 2023 is clearly contrary to the provisions of the Act as well as the Scheme dated 29 March 2022.......

39 With reference to the decision of the Hon'ble Calcutta High Court in Triton Overseas Private Limited (supra), the Hon'ble Calcutta High Court has passed the order without considering the Scheme dated 29 th March 2022 as the said Scheme is not referred to in the order. Therefore, the said judgment cannot be treated as a precedent or relied upon to decide the jurisdiction of the Assessing Officer to issue notice under Section 148 of the Act. The Hon'ble Calcutta High Court has referred to an Office Memorandum dated 20 th February 2023 being F No.370153/7/2023 TPL which has been dealt with above. Therefore, no reliance can be placed on the said Office Memorandum to justify that the JAO has jurisdiction to issue notice under Section 148 of the Act. Further the Hon'ble Telangana High Court in the case of KankanalaRavindra Reddy v. Income Tax Officer" has held that in view of the provisions of Section 151A of the Act read with the Scheme dated 29 th March 2022 the notices issued by the JAOs are invalid and bad in law. We are also of the same view.

(i) any information in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; (ii) any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or (iii) any information received under an agreement referred to in section 90 or section 90A of the Act; or (iv) any information made available to the Assessing Officer under the scheme notified under section 135A; or (v) any information which requires action in consequence of the order of a Tribunal or a Court. Explanation 2. —For the purposes of this section, where,— (i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under subsection (2A) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee [where] the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person.

Explanation 3. —For the purposes of this section, specified authority means the specified authority referred to in section 151. 151A. Faceless assessment of income escaping assessment. (1) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of assessment, reassessment or recomputation under section 147 or issuance of notice under section 148 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; (b) optimisingutilisation of the resources through economies of scale and functional specialisation; (c) introducing a team-based assessment, reassessment, recomputation 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 subsection (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament. "

3. For the purpose of this Scheme,— (a) assessment, reassessment or re-computation under section 147 of the Act, (b) issuance of notice under section 148 of the Act, shall be through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in section 148 of the Act for issuance of notice, and in a faceless manner, to the extent provided in section 144B of the Act with reference to making assessment or reassessment of total income or loss of assessee. "

16. 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.

10. Since the entire reassessment is quashed, the other grounds raised

by the assessee challenging the validity of the addition on merits need not be gone into and they are left open.

11. In the result, the appeal of the assessee is allowed.”

6. Further the Hon'ble Jurisdictional i.e. High Court of Punjab and Haryana in the case of Jatinder Singh Bhangu (supra), held 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 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.

7. In view of the above, by respectfully following the Judgment of the Jurisdictional High Court and the order of Co-ordinate Bench of the Tribunal (supra), we hereby hold that the notices issued u/s 148 of the Act dated 31/03/2022 (A.Y 2018-19) and 27/03/2023 (A.Y 2019- 20) by Jurisdictional Assessing Officer are hereby quashed and hence the assumption of jurisdiction by the Assessing Officer renders invalid, which vitiates the entire re-assessment proceedings. Accordingly, the impugned re-assessment proceedings are hereby quashed. Thus, Ground No. 3 of both the Appeals of the Assessee are allowed.

8. Since we have quashed the entire re-assessment orders by allowing the Ground No. 3, other grounds of appeals of the Assessee requires no adjudication.

9. Further as we have quashed the assessment orders itself pertaining to Assessment Year 2018-19 and 2019-20, the Appeals filed by the Revenue become in-fructuous.

10. In the Result, Appeal of the Assessee in and 3323/Del/2025 are allowed and Appeals of the Revenue in and 3467/Del/2025 are dismissed.