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The Tribunal held that the notice dated March 31, 2023, issued under Section 148 of the Income Tax Act, 1961, was invalid. The reasoning was based on the explicit provisions of Section 151A of the Act, which mandates a faceless mechanism for reassessment proceedings, including the issuance of notices under Section 148. The Central Government's Notification dated March 29, 2022, introduced this faceless mechanism, requiring adherence to automated allocation of cases to Faceless Assessing Officers (FAOs). The Tribunal relied on the Division Bench judgment in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., which clearly stated that the jurisdiction of the JAO and FAO is exclusive, and notices under Section 148 must be issued by the FAO through automated allocation. The argument that the scheme was only applicable to the extent of Section 144B was rejected, as Section 151A itself contemplates the scheme for both assessment and issuance of notices under Section 148. The Tribunal found that the issuance of the notice by the JAO was contrary to law and vitiated the entire proceedings. Consequently, the writ petition was allowed, quashing the notice under Section 148, the reassessment order, the notice of demand, and the notice of penalty. The Tribunal explicitly stated that it had not expressed any opinion on other issues raised in the petition.
The High Court held that the notices issued under Section 148 of the Income-tax Act, 1961, were invalid because they were issued outside the faceless mechanism mandated by Section 144B of the Act. The Court referred to its earlier decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & Ors., wherein it was held that the Jurisdictional Assessing Officer lacks the jurisdiction to issue a notice under Section 148 without adhering to the faceless mechanism as stipulated by Section 144B read with the Scheme under Section 151A dated March 29, 2022. Consequently, the Court found that the proceedings were covered by the Hexaware decision. The revenue's contentions regarding central charges were also found to be covered by the decision in Ganesh Nivrutti Jagtap. The Court allowed the petitions in terms of prayer clause (a) of each petition, which typically seeks quashing of the impugned notices and assessment orders. No issue was expressly left undecided.
The High Court held that the notices issued under Section 148 of the Income-tax Act, 1961, were invalid because they were issued outside the faceless mechanism mandated by Section 144B of the Act. The Court referred to its earlier decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & Ors., wherein it was held that the Jurisdictional Assessing Officer lacks the jurisdiction to issue a notice under Section 148 without adhering to the faceless mechanism as stipulated by Section 144B read with the Scheme under Section 151A dated March 29, 2022. Consequently, the Court found that the proceedings were covered by the Hexaware decision. The revenue's contentions regarding central charges were also found to be covered by the decision in Ganesh Nivrutti Jagtap. The Court allowed the petitions in terms of prayer clause (a) of each petition, which typically seeks quashing of the impugned notices and assessment orders. No issue was expressly left undecided.
The High Court held that the notice dated July 27, 2022, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2014-15 is barred by limitation. The Court relied on its previous ruling in Godrej Industries Ltd. v. The Assistant Commissioner of Income Tax, Circle 14 (1)(2), Mumbai & Ors. The Court reasoned that the validity of a notice under Section 148 must be judged based on the law existing on the date of its issuance. By July 27, 2022, the amended Section 149 of the Act was in force, and the deadline for issuing notices for AY 2014-15 had expired on March 31, 2021. Therefore, the notice was hopelessly barred by limitation. The Court quashed and set aside the impugned notice and the underlying prior notices/orders under Sections 148A(b) and 148A(d). The Court explicitly stated that it expressed no opinion on any other issues raised in the Writ Petition as it was not necessary to do so.
The High Court held that the impugned notice dated April 16, 2024, issued under Section 148 of the Income Tax Act, 1961, and the underlying prior notice and order under Sections 148A(b) and 148A(d) were invalid. The Court found that these actions were taken by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), which is a mandatory requirement under Section 151A of the Act, as interpreted by the Division Bench in Hexaware Technologies Limited. The Court reasoned that the Scheme notified under Section 151A mandates automated allocation of cases to FAO, and the JAO has no jurisdiction to issue such notices. The Court noted that acting contrary to the law itself causes prejudice to the assessee, and thus, the Petitioner did not need to prove further prejudice. The ratio decidendi is that any action taken by an Income Tax Authority contrary to the statutory procedure, particularly concerning the mandatory faceless mechanism for reassessment notices, is bad in law and liable to be quashed. The Court allowed the petition, quashing the notice under Section 148, the order under Section 148A(d), and the show cause notice under Section 148A(b). The Court explicitly stated that it had not expressed any opinion on other issues raised in the petition.
The High Court held that the impugned notice dated March 31, 2022, issued under Section 148 of the Income Tax Act, 1961, and the consequential proceedings under Section 148A were invalid. The Court found that the Respondent-Revenue had failed to comply with the Scheme notified by the Central Government pursuant to Section 151A(2) of the Act. The Court relied on its own Division Bench judgment in *Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors.*, which clearly declared that for the issuance of a notice under Section 148 of the Act, only the Faceless Assessing Officer (FAO) has jurisdiction, and not the Jurisdictional Assessing Officer (JAO). The Court reasoned that an act done by an authority contrary to the provisions of the statute itself causes prejudice to the assessee, and therefore, the petitioner was not required to prove further prejudice. The ratio decidendi is that reassessment proceedings initiated by a JAO when a faceless mechanism is mandated under Section 151A are vitiated. The Writ Petition was allowed, quashing and setting aside the notice under Section 148 dated March 31, 2022, the order under Section 148A(d) dated March 31, 2022, and the show cause notice under Section 148A(b) dated March 19, 2022. The Court explicitly stated that it had not expressed any opinion on other issues raised in the Writ Petition, as they were not necessary to decide.
The High Court held that the notice dated March 31, 2024, issued under Section 148 of the Income Tax Act, 1961, and the approval dated March 31, 2024, under Section 151 of the Act, were invalid. The Court relied on the Division Bench judgment in Hexaware Technologies Limited vs. Assistant Commissioner of Income Tax & 4 Ors., which clearly stated that the Scheme notified under Section 151A mandates that notice under Section 148 must be issued in a faceless manner by the FAO through automated allocation, to the exclusion of the JAO. The Court found that the Revenue had not complied with the Scheme notified by the Central Government pursuant to Section 151A(2) of the Act. The Court reasoned that an act done by an authority contrary to the provisions of the statute itself causes prejudice to the assessee, and therefore, the Petitioner was not required to prove further prejudice. The Writ Petition was allowed, quashing and setting aside the impugned notice and approval. The Court clarified that it had not expressed any opinion on other issues raised in the Writ Petition as it was disposed of on the ground of non-compliance with Section 151A.
The High Court held that the notices and orders issued under Sections 148A(b), 148A(d), and 148 of the Income Tax Act, 1961, were invalid and bad in law. The Court found that the Respondent-Revenue had not complied with the Scheme notified by the Central Government pursuant to Section 151A(2) of the Act. This Scheme, being subordinate legislation, governs the conduct of proceedings under Sections 148A and 148. Following the explicit declaration of law in the case of Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & Ors., the Court concluded that the issuance of the impugned notice by the JAO was contrary to Section 151A and the Scheme, thereby vitiating the entire reassessment proceedings. The Court noted that an act done contrary to the provisions of the statute itself causes prejudice to the assessee, and they are entitled to be assessed as per law. Consequently, all consequential actions taken by the revenue, including the assessment order and penalty orders, were quashed and set aside. The Court explicitly stated that it had not expressed any opinion on other issues raised in the petition, as it was not necessary to do so after disposing of the petition on the ground of non-compliance with Section 151A.
The High Court held that the notices and order were invalid and liable to be quashed. The Court found that the Respondent-Revenue had not complied with the Scheme notified by the Central Government pursuant to Section 151A(2) of the Act. Following the explicit declaration of law in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., the Court stated that for a notice to be validly issued for reassessment under Section 148, the Revenue must comply with Section 151A. The Court noted that the Scheme clearly provides for the issuance of notice under Section 148 of the Act in a faceless manner, and only the FAO can issue such a notice, not the JAO. The Court also referred to Kairos Properties Pvt. Ltd. vs. Assistant Commissioner of Income-tax and Ors., which held that the Scheme notified under the notification dated March 29, 2022, covers steps taken by the Revenue in issuing notices under Section 148A(b) and orders under Section 148A(d). Consequently, the Writ Petition was allowed, quashing the impugned notices and order as being wholly without jurisdiction, illegal, and arbitrary. The Court made it clear that it had not expressed any opinion on other issues raised in the petition.
The High Court held that the notice dated 24 March 2023 issued under Section 148 of the Income Tax Act, 1961, and the preceding notice and order under Sections 148A(b) and 148A(d) were invalid. The Court found that these actions were taken by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), which contravenes the mandatory provisions of Section 151A of the Act and the Scheme notified by the Central Government on 29 March 2022. The Court relied on its previous decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., which clearly established that the Scheme mandates faceless proceedings and that the JAO does not have concurrent jurisdiction with the FAO in such matters. The Court reasoned that an act done contrary to the provisions of the statute is inherently bad in law and causes prejudice to the assessee, thus requiring no further proof of prejudice. Consequently, the entire proceedings initiated under Section 148 were vitiated. The Court also noted that it had not expressed any opinion on other issues raised, such as limitation, as the petition was disposed of on the ground of non-compliance with Section 151A.
The High Court held that it would not entertain the writ petition when the petitioner had already availed of an alternate remedy by filing an appeal against the impugned assessment order and a revision application. The Court reasoned that the appellate authority, being bound by the jurisdictional High Court's decisions in Hexaware and Siemens, would consider the petitioner's contentions regarding the illegality of the notice and order. The Court observed that entertaining such writ petitions while statutory appeals are pending would lead to an undesirable situation where the High Court would have to adjudicate matters that can be decided by the appellate authorities. Therefore, the Court directed the petitioner to pursue the pending proceedings before the Commissioner of Income-tax (Appeals) and the Revisionary Authority. The Court also ordered that the impugned assessment order shall remain stayed until the appellate or revisionary proceedings are decided. All contentions of the petitioner on the pending proceedings were expressly kept open.
The High Court held that since the petitioner had already availed of the statutory remedy by filing an appeal against the assessment order, and such appeal was pending, the writ petition under Article 226 of the Constitution of India would not be entertained. The Court reasoned that the Appellate Authority is bound by the decisions of the Jurisdictional High Court, including the ruling in Hexaware Technologies Limited. Therefore, it was open for the petitioner to raise all contentions, including the alleged illegality of the notice under Section 148, before the appellate authority. The Court rejected the petitioner's plea that the appeal would take too long, stating that the appellate authority must consider the binding pronouncements of the High Court. The assessment order was directed to remain stayed until the appellate proceedings were decided. All contentions of the parties on the pending proceedings were expressly kept open. The petition was disposed of in terms of the order.
The Tribunal held that the notice dated March 27, 2024, issued under Section 148 of the Income Tax Act, 1961, is invalid. The reasoning was that Section 151A of the Act mandates the formulation of a scheme for both assessment/reassessment and the issuance of notice under Section 148. The scheme notified by the Central Government, which has been tabled in Parliament, clearly covers the issuance of notice under Section 148 in a faceless manner through automated allocation. The Division Bench of the Bombay High Court in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors. has explicitly declared that only the FAO can issue a notice under Section 148 and that there is no concurrent jurisdiction of the JAO and FAO in this regard. The Revenue's argument that the scheme is applicable only to the extent of Section 144B was rejected, as it would render parts of the scheme otiose. The Tribunal stated that an act done by an authority contrary to the statute itself causes prejudice, and therefore, the Petitioner was not required to prove further prejudice. Consequently, the Writ Petition was allowed, quashing the notice dated March 27, 2024, and the approval dated March 27, 2024. The Tribunal explicitly stated that no opinion was expressed on other issues raised in the petition.
The High Court held that it would not entertain the writ petition when the petitioner had already availed of statutory remedies by filing an appeal against the assessment order and a revision application. The Court reasoned that the appellate and revisional authorities are bound by the jurisdictional High Court's decisions, including those in Hexaware and Siemens. Therefore, the petitioner could raise all contentions regarding the illegality of the notice and assessment order before these authorities. The Court acknowledged the petitioner's concern about the delay in appeal proceedings but stated that the appellate authority is bound to consider pleas based on binding judicial pronouncements. Accordingly, the Court disposed of the petition, directing the petitioner to pursue the pending appeal and revision proceedings. The Court also ordered that the impugned assessment order shall remain stayed until the appellate or revisionary proceedings are decided. All contentions of the parties on the pending proceedings were expressly kept open.
The High Court held that the Impugned Proceedings, which were initiated or continued for tax liabilities pertaining to the period prior to the commencement of the CIRP, were bad in law. The Court reasoned that Section 31(1) of the IBC makes an approved resolution plan binding on all creditors, including the Central Government and its agencies. The Supreme Court's decision in Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. was cited, establishing that once a resolution plan is approved, all prior claims not included in the plan stand extinguished, and no proceedings can be initiated or continued for such claims. The Court noted that the resolution plan explicitly provided for the waiver of all claims relating to the period prior to the effective date of the resolution plan. The Court also referred to its own co-ordinate bench judgments in Alok Industries Ltd. and AMNS Khopoli Limited, which had quashed similar proceedings. Therefore, all notices and communications issued by the Revenue in connection with the Impugned Proceedings were quashed and set aside. The Petitioner-Assessee was granted relief in terms of prayer clause (a) of the writ petition.
The High Court held that the reassessment proceedings initiated by the Revenue were bad in law and must be quashed. The Court reasoned that Section 31(1) of the IBC makes the approved resolution plan binding on all stakeholders, including the Central Government (Revenue). The Supreme Court's decision in Ghanshyam Mishra & Sons Pvt. Ltd. & Ors. v. Edify Education Society & Ors. was cited, establishing that once a resolution plan is approved, all prior claims against the corporate debtor are extinguished, and no proceedings, whether pending or new, can be continued or initiated concerning the period prior to the commencement of the CIRP. The Court noted that the impugned proceedings squarely relate to the period prior to the CIRP and are therefore prohibited. The Court also referred to other High Court judgments, Alok Industries Ltd. and AMNS Khopoli Limited, which applied the principle of Ghanshyam Mishra to similar reassessment proceedings. Consequently, the Court quashed all impugned notices and communications and made the rule absolute.
The Court held that the mandatory faceless procedure for issuing notices under Section 148, as notified by the Central Government on March 29, 2022, under Section 151A and Section 144B, is applicable to Central and International taxation charges. The Court rejected the revenue's contention that these charges are exempted, referencing its own prior decisions in *Hexaware* and *CapitalG LP*, and a Telangana High Court decision in *Sri Venkataramana Reddy Patloola*. The reasoning was that Section 151A itself contemplates schemes for assessment, reassessment, and issuance of notices, and the scheme notified covers both aspects. The Court found that the notices were issued by the JAO, which falls outside the faceless mechanism, rendering them illegal and without jurisdiction, as established in *Hexaware*. The Court also noted that the proceedings were covered by the decision in *Kairos Properties Pvt. Ltd.*, which affirmed the scheme's applicability to Section 148A procedures. Consequently, the impugned notices and order were quashed and set aside. The Court did not expressly leave any issue undecided.
The High Court held that the notice dated March 30, 2023, issued under Section 148 of the Income Tax Act, 1961, and the preceding order under Section 148A(d) dated March 30, 2023, were invalid. The Court found that the Respondent-Revenue had not complied with the Scheme notified by the Central Government pursuant to Section 151A(2) of the Act. Citing the Division Bench judgment in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & Ors., the Court reiterated that Section 151A mandates a faceless mechanism for the issuance of notice under Section 148, and only a FAO can issue such a notice, not the JAO. The Court found the Revenue's argument regarding concurrent jurisdiction and the limited applicability of the Scheme to be contrary to the law laid down in Hexaware and other consistent decisions like Nainraj Enterprises Pvt. Ltd. and Kairos Properties Pvt. Ltd. The Court concluded that the JAO lacked jurisdiction to issue the impugned notice, thereby vitiating the entire proceedings. Consequently, the Writ Petition was allowed, quashing the notices and the consequential assessment and penalty proceedings.
The High Court held that the notice dated March 27, 2023, issued under Section 148 of the Income Tax Act, 1961, and the underlying proceedings under Section 148A were invalid. The Court found that the Jurisdictional Assessing Officer (JAO) had no jurisdiction to issue the impugned notice, as the procedure mandated by Section 151A of the Act, read with the notification dated March 29, 2022, requires such notices to be issued by a Faceless Assessing Officer (FAO) through an automated allocation mechanism. The Court relied on its previous decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., which clearly stated that the scheme for faceless assessment applies to the issuance of notices under Section 148 and that the JAO and FAO have exclusive jurisdictions. The Court further noted that an act done contrary to the provisions of the statute causes prejudice to the assessee, and therefore, the petitioner was not required to prove further prejudice. Consequently, the writ petition was allowed, quashing the impugned notice and order. The Court clarified that it had not expressed any opinion on other issues raised in the petition.
The High Court held that the notice dated 20 March 2024 under Section 148, and the prior notice and order under Section 148A(b) and 148A(d), were indeed issued by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO). This was found to be in contravention of Section 151A of the Income Tax Act, 1961, and the Notification dated 29 March 2022, which mandates a faceless mechanism for such proceedings. The Court relied on its previous decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income-Tax & 4 Ors., which clearly established that the JAO has no jurisdiction to issue such notices when a faceless scheme is in place. The Court further referenced its decisions in Nainraj Enterprises Pvt. Ltd. Vs. The Deputy Commissioner of Income-Tax and Kairos Properties Pvt. Ltd. vs. Assistant Commissioner of Income-tax, which affirmed the applicability of the faceless scheme to proceedings under Section 148A and 148. Consequently, the Court found that the action of the authority was contrary to law, causing prejudice to the assessee, and quashed the impugned order and notice. The Court explicitly stated that it had not expressed any opinion on other issues raised in the petition.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, was unsustainable because it was not issued by the Faceless Assessing Officer (FAO). Relying on the precedent set in Hexaware Technologies Limited (supra), the Court found that if a notice is not issued by the FAO, it is unsustainable and liable to be quashed. Consequently, the impugned notice was quashed and set aside. Any further demand notice or penalty notice issued in furtherance of this unsustainable notice would also not survive and were set aside. The Court clarified that all other contentions of both sides, not covered by the Hexaware Technologies judgment and available in proceedings that could be initiated by the FAO, were left open.
The High Court held that the notice dated March 28, 2023, issued under Section 148 of the Income Tax Act, 1961, and the preceding notice under Section 148A(b) and order under Section 148A(d) were invalid. The Court found that these actions were taken by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), which is a mandatory requirement under Section 151A of the Act, read with the Notification dated March 29, 2022. The Court relied on its previous judgments in *Hexaware Technologies Limited*, *Nainraj Enterprises Pvt. Ltd.*, and *Kairos Properties Pvt. Ltd.*, which clearly established that the Scheme notified under Section 151A mandates a faceless procedure for issuing notices under Section 148 and for passing orders under Section 148A. The Court reasoned that any action taken contrary to this statutory scheme is bad in law and causes prejudice to the assessee, thus requiring quashing. The Writ Petition was allowed, quashing the impugned notice, order, and consequential assessment order. The Court explicitly stated that it had not expressed any opinion on other issues raised in the petition, as they were not necessary to decide.
The High Court held that the notice dated March 31, 2024, issued under Section 148 of the Income Tax Act, 1961, and the underlying order dated March 31, 2024, passed under Section 148A(d) of the Act, were invalid. The Court found that these actions were taken by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), which is a mandatory requirement under Section 151A of the Act, as interpreted by the Court in *Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors.* The Court reiterated that the scheme notified under Section 151A, which includes the faceless mechanism, is applicable to the issuance of notices under Section 148 and that the JAO lacks jurisdiction in such matters. The Court emphasized that an act done contrary to the statute causes prejudice and does not require further proof of prejudice. Consequently, the writ petition was allowed, quashing the impugned order under Section 148A(d) and the notice under Section 148. The Court explicitly stated that no opinion was expressed on other issues raised in the petition.
The High Court held that the issue regarding the sustainability of a notice issued by the JAO instead of the FAO under Section 151(A) of the Income Tax Act, 1961, is settled by the judgment in Hexaware Technologies Limited (supra). The Court found that if the notice was not issued by the FAO, it is unsustainable. Consequently, the notice issued under Section 148 of the Income Tax Act, 1961, was quashed and set aside. Any further demand notice or penalty notice issued in furtherance of the impugned notice was also set aside. The Court clarified that all contentions of both sides, except those covered by the Hexaware Technologies judgment and those available in proceedings initiated by the FAO under Section 151(A), were left open for future consideration.
The High Court held that the notice dated January 31, 2024, issued under Section 148 of the Income Tax Act, 1961, and the preceding order under Section 148A(d) dated January 31, 2024, were invalid. The Court found that these actions were taken by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), which is a mandatory requirement under Section 151A of the Act and the Notification dated March 29, 2022. The Court relied on its previous decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & Ors., which clearly stated that the faceless scheme mandates automated allocation of cases to FAO for issuing notices under Section 148, and the JAO has no concurrent jurisdiction. The Court reasoned that an act done contrary to the provisions of the statute is itself prejudicial to the assessee, and thus, prejudice need not be independently proven. Consequently, the entire proceedings initiated were vitiated. The Writ Petition was allowed, quashing the show cause notice under Section 148A(b), the order under Section 148A(d), and the notice under Section 148. The Court explicitly stated that it had not expressed any opinion on other issues raised in the petition.
The Tribunal held that the notice dated 21 March 2023 issued under Section 148 of the Income Tax Act, 1961, and the underlying prior notices and order under Sections 148A(b) and 148A(d) were invalid. The reasoning was that these actions were taken by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), which is a mandatory requirement under Section 151A of the Act, read with the notification dated 29 March 2022. The Tribunal relied on its own prior decisions in Hexaware Technologies Limited and Kairos Properties Pvt. Ltd., which clearly established that the faceless scheme mandates the issuance of such notices by the FAO and that there is no concurrent jurisdiction for the JAO in this regard. The Court found that the Revenue had not complied with the Scheme notified by the Central Government. The ratio decidendi is that any action taken by an authority contrary to the statutory procedure prescribed, such as the mandatory faceless mechanism for issuing reassessment notices, is bad in law and causes prejudice to the assessee. Consequently, the Writ Petition was allowed, quashing the show cause notices, the order under Section 148A(d), the notice under Section 148, and the assessment order.
The High Court dismissed the writ petition. It held that the transfer of a case under Section 127 of the Income Tax Act, 1961, does not infringe upon a substantial right of the assessee, nor does it necessarily involve a denial of equal rights. The Court referred to the Supreme Court judgment in Panna Lal Binjraj Vs. Union of India, which held that such transfers are a minor deviation and do not necessarily cause serious prejudice if other factors of importance are available. Regarding the opportunity to be heard, the Court noted that Section 127(2)(a) makes this requirement conditional, "wherever it is possible to do so." The Court found that the impugned order did not contain substantial compliance with the requirement of recording reasons under Section 127, as it was difficult to ascertain the specific reasons that prevailed with the competent authority. However, despite this finding on the lack of reasons, the Court ultimately rejected the petition, implying that the procedural defect did not warrant interference under Article 226 in the given facts. The Court also rejected the petitioner's request for continuation of ad-interim relief.
The Tribunal held that the notice dated March 30, 2024, issued under Section 148 of the Act, and the preceding order dated March 30, 2024, passed under Section 148A(d), were invalid. This was because they were issued by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), which is a mandatory requirement under Section 151A of the Act read with the Scheme notified on March 29, 2022. The Tribunal relied on the Division Bench judgment in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., which clearly held that the Scheme mandates automated allocation of cases to FAO for issuance of notices under Section 148 and that the JAO has no concurrent jurisdiction. The Court noted that an act done contrary to the provisions of the statute causes prejudice. Consequently, the Writ Petition was allowed, quashing and setting aside the order under Section 148A(d) and the notice under Section 148. The Tribunal explicitly stated that no opinion was expressed on other issues raised in the petition.
The High Court held that the notice dated July 18, 2022, issued under Section 148 of the Income Tax Act, 1961, and the preceding notices/order under Section 148A were invalid. The Court found that these actions were taken by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), which is a mandatory requirement under Section 151A of the Act read with the Notification dated March 29, 2022. The Court relied on its previous judgment in Hexaware Technologies Limited, which clearly established that the faceless mechanism for issuing notices under Section 148 is mandatory and that the JAO has no concurrent jurisdiction with the FAO in this regard. The Court reasoned that an act done contrary to the provisions of the statute is bad in law and causes prejudice to the assessee, and therefore, the Petitioner was not required to prove further prejudice. Consequently, the Writ Petition was allowed, quashing the Show Cause Notice dated May 27, 2022, the Order dated July 16, 2022, and the Notice dated July 18, 2022, along with all consequential notices/orders. The Court explicitly stated that it had not expressed any opinion on other issues raised in the Writ Petition.
The High Court held that the notice dated 8 April 2024 issued under Section 148 of the Income Tax Act, 1961, and the preceding notice and order under Sections 148A(b) and 148A(d) were invalid. The Court found that the Respondent-Revenue had not complied with the scheme notified by the Central Government pursuant to Section 151A(2) of the Act. The judgment in *Hexaware Technologies Limited* clearly declared that for notices under Section 148, only the Faceless Assessing Officer (FAO) can issue them, not the Jurisdictional Assessing Officer (JAO), due to the mandatory nature of the faceless scheme. The Court noted that the Revenue's counsel conceded that the present proceedings were covered by the *Hexaware* and *Kairos Properties* judgments. Consequently, the Court quashed and set aside the show cause notice dated 26.03.2024, the order dated 08.04.2024, and the notice dated 08.04.2024 issued under Sections 148A(b), 148A(d), and 148 respectively. The Court explicitly stated that it had not expressed any opinion on other issues raised in the petition, as they were not necessary to decide.
The High Court held that the applicants' contention, supported by the decision in Unique Trading Company (Supra), that Section 258 of the Cr.P.C. is not applicable to a private complaint filed under Section 200 of the Cr.P.C. by an Income Tax Department officer, is correct. Therefore, the order dated July 3, 2024, in WPCR No. 45 of 2024, which granted liberty to approach the Trial Court for discharge, was required to be recalled or varied. The review application was disposed of in terms of this finding. The original writ petition (WPCR No. 45 of 2024) was restored and posted for further consideration on September 19, 2024. The Court did not decide on the merits of the original writ petition or the cognizance taken by the Magistrate, but rather on the procedural aspect of seeking discharge.
The High Court held that the notice dated March 30, 2024, issued under Section 148 of the Income Tax Act, 1961, and the preceding order dated March 30, 2024, passed under Section 148A(d) were invalid. This was because they were issued by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), which is a mandatory requirement under Section 151A of the Act read with the Central Government's notification dated March 29, 2022. The Court relied on its previous decision in Hexaware Technologies Limited, which clearly established that the faceless mechanism is mandatory and that the JAO and FAO have exclusive jurisdictions, with no concurrent powers for issuing such notices. The Court found that the revenue had not complied with the Scheme notified under Section 151A(2). Consequently, the proceedings initiated were vitiated. The Court quashed and set aside the order under Section 148A(d) and the notice under Section 148. The Court explicitly stated that it had not expressed any opinion on other issues raised in the writ petition, as it was not necessary to do so.
The High Court held that the notice dated June 14, 2024, issued under Section 148 of the Income Tax Act, 1961, and the preceding order under Section 148A(d) were invalid. The Court found that these actions were taken by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), which is a mandatory requirement under Section 151A of the Act read with the Notification dated March 29, 2022. The Court relied on its previous decision in Hexaware Technologies Limited, which clearly laid down that the faceless scheme mandates that only the FAO can issue notices under Section 148, and the JAO has no concurrent jurisdiction. The Court noted that the revenue did not dispute the facts and conceded that the case was covered by the Hexaware and Kairos Properties judgments. Consequently, the writ petition was allowed, quashing the impugned notice and order. The Court explicitly stated that it had not expressed any opinion on other issues raised in the petition, as it was not necessary to do so.
The High Court held that the reassessment notice dated 30th March, 2021, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2015-16, was illegal and arbitrary. The Court found that the reasons recorded by the Assessing Officer did not demonstrate a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment, which is a prerequisite for reopening an assessment after the expiry of four years from the end of the relevant assessment year, as stipulated by the proviso to Section 147. The Court emphasized that the reasons must be self-explanatory and establish a vital link between the alleged non-disclosure and the escapement of income, a link that was absent in the present case. The Court also noted that the sanctioning authority under Section 151 had failed to apply its mind to the material facts. Consequently, the Court quashed the sanction order, the reassessment notice, the order rejecting objections, and all consequential proceedings. The ratio decidendi is that for reassessment after four years, the reasons must explicitly state and demonstrate the assessee's failure to disclose material facts, and this cannot be supplemented by affidavits or oral submissions.
The High Court held that the impugned notice dated March 21, 2024, issued under Section 148 of the Income Tax Act, 1961, along with the prior notice under Section 148A(b) and order under Section 148A(d), were invalid. The Court found that these actions were taken by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), which is a mandatory requirement under Section 151A of the Act and the scheme notified by the Central Government on March 29, 2022. The Court relied on its own Division Bench judgment in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., which clearly held that the scheme mandates faceless proceedings and that only the FAO can issue notices under Section 148, not the JAO. The Court noted that the Revenue's counsel conceded that the present case was covered by the Hexaware and Kairos Properties judgments. Consequently, the Court allowed the writ petition, quashing the notice dated March 8, 2024, the order dated March 21, 2024, and the notice dated March 21, 2024, issued under Section 148. The Court explicitly stated that it had not expressed any opinion on other issues raised in the petition, as the disposal was solely on the ground of non-compliance with Section 151A.
The High Court allowed the Writ Petition. It held that the notice dated April 15, 2024, issued under Section 148 of the Income Tax Act, 1961, and the preceding order under Section 148A(d) were invalid because they were issued by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO). This non-compliance with Section 151A of the Act and the scheme notified by the Central Government renders the proceedings vitiated. The Court relied on its previous decisions in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors. and Kairos Properties Pvt. Ltd. vs. Assistant Commissioner of Income-tax and Ors., which clearly established that the scheme mandates faceless proceedings and that only an FAO can issue such notices. The Court quashed and set aside the impugned order and notice. It explicitly stated that no opinion was expressed on other issues raised in the petition, as the disposal was solely on the ground of non-compliance with Section 151A.
The High Court dismissed the appeals, upholding the revenue's position. The Court held that for computing the deduction under Section 80-I (25% of profits from a ship), it is necessary to give effect to and factor in the deduction allowed under Section 33AC. The reasoning was that Section 33AC allows a deduction from profits and gains of business, and Section 80-I is a deduction from such profits and gains. If the Section 33AC deduction results in no profit from the ship, then the Section 80-I deduction, being a percentage of profits, cannot be claimed. Regarding the assessee's alternate argument for proportionate allocation of the Section 33AC deduction, the Court disagreed. It reasoned that Section 80-I refers to 'a ship' in the context of the business of operating ships, not necessarily a single ship. The reserve created under Section 33AC could be utilized for acquiring a new ship to replace an existing one, thus being attributable to the business of qualifying ships. The Court found it impossible to make adjustments at that stage by apportionment between qualifying and non-qualifying ships and stated it was not open to the appellate forum to provide its own basis for such apportionment. The ratio is that deductions under Section 33AC must be factored into the computation of profits for Section 80-I, and apportionment of Section 33AC deduction is not permissible at the appellate stage.
The High Court held that the reassessment proceedings were invalid. The Court noted that the original assessment for AY-2013-14 was completed under Section 143(3). The Impugned Notice under Section 148 was issued on March 31, 2021, which is more than four years after the end of the assessment year (March 31, 2014). Under the proviso to Section 147, reassessment beyond four years is permissible only if income chargeable to tax has escaped assessment by reason of the assessee's failure to disclose fully and truly all material facts necessary for his assessment. The Court found that the reasons recorded by the Assessing Officer did not state that the petitioner had failed to disclose fully and truly all material facts. The Revenue's contention that "reason to believe" was sufficient, even with full disclosure, was rejected. The Court emphasized that reasons must be clear, unambiguous, and self-explanatory, demonstrating the link between the conclusion and the evidence, and that reasons cannot be supplemented by affidavits or oral submissions. Citing the principle that the Assessing Officer must disclose in the reasons which fact or material was not disclosed by the assessee to establish a vital link, the Court found this link absent. Therefore, the Assessing Officer lacked jurisdiction to reopen the assessment. The Court quashed the Impugned Notice and all consequential notices and orders.
The High Court dismissed the appeals, upholding the revenue's contention. The Court held that for computing the deduction under Section 80-I (25% of profits from a ship), it is necessary to give effect to and factor in the deduction allowed under Section 33AC. If the deduction under Section 33AC results in no profit from the ship, then the deduction under Section 80-I cannot be claimed. The Court rejected the assessee's alternate argument for proportionate allocation of the Section 33AC deduction. It reasoned that Section 80-I refers to 'a ship' in the context of the business of operating ships, not necessarily a single ship. The reserve created under Section 33AC could help replace a ship like 'Prabhu Das' and therefore is attributable to it. The Court found no explicit legislative stipulation requiring the Section 33AC deduction to be disregarded when computing the Section 80-I deduction and found no reason to interfere with the impugned order. The appeals were dismissed, finding in favour of the revenue.
The Special Court held that CANFINA's claim based on an alleged mortgage over the subject property did not have priority. The Court found that the subject property was owned by Eskaydee Leasing and Investment Pvt. Ltd., and Pallav Seth, as a shareholder, could not have lawfully mortgaged the property. Furthermore, the Court noted that only a photostat copy of an agreement was deposited, not original title deeds, and no exceptional circumstances were made out for constructive delivery. Consequently, the Court agreed with previous observations that there was no valid equitable mortgage in favour of CANFINA. Therefore, CANFINA's claim fell under Section 11(2)(b) of the TORT Act, 1992, making it subservient to the Income Tax Department's claim under Section 11(2)(a). Given the disparity between liabilities and assets, the Court allowed the Custodian's prayer to release Rs.4 Crore from Pallav Seth's attached accounts to the Income Tax Department, subject to an undertaking to refund the amount with interest if directed. Misc. Application (L) No.39 of 2023 was dismissed, and Custodian’s Report No.10 of 2023 was allowed.
The High Court held that the basis on which the Assessing Officer proceeded – that the Petitioner had not complied with the terms of the IDS and had not deposited the tax – was erroneous. This conclusion was reached based on the Revenue's own admission in the reply affidavit that the Petitioner had indeed deposited the total amount of Rs. 1,48,50,000/- against the IDS declaration. Consequently, the impugned assessment order was deemed illegal and liable to be quashed and set aside. The Petitioner was held entitled to the benefits under the IDS scheme. The Court directed the Respondents to issue an appropriate certificate of deposit under IDS to the Petitioner within four weeks. The Petitioner's appeal before the CIT(A), which had become infructuous, was noted as disposed of.
The High Court, considering the nature of the orders passed by the Assessing Officer and the petitioner's contention that relevant decisions were not considered, found that a reconsideration of the impugned order was necessary. The Court permitted the petitioner to move an appropriate application before the PCIT (Central), Pune, praying for appropriate orders and raising the contentions that the decisions in Pr. CIT Vs. Paramshakti Distributors Pvt. Ltd. and PCIT Vs. Mohmmad Haji Adam & Co. should have been considered. The Learned PCIT (Central), Pune, was directed to look into these contentions and take an appropriate view, exercising discretion on whether any illegality in the order dated March 16, 2023, was made out. The petitioner was to make the application within one week, and a decision was to be taken within four weeks. All contentions of the parties were expressly kept open. The petitioner was also granted liberty to approach the CIT(A) for an early disposal of their appeal.
The High Court found substantial merit in the petitioner's contentions. It noted that the SOP, issued under Section 144B(6)(xi) of the Act, clearly provides a seven-day response time from the issuance of the Show Cause Notice. In this case, the SCN was issued on March 22, 2024. The Court observed that sufficient time was available to the Assessing Officer to grant the full seven days. However, the Assessing Officer initially granted only two days and then extended it by another two days, which was insufficient and not in accordance with the SOP. The Court held that the Assessing Officer arbitrarily exercised jurisdiction by granting such a short extension. This approach was a clear breach of the SOP and resulted in a breach of the principles of natural justice, denying the petitioner a fair and reasonable opportunity to respond to the SCN. This caused prejudice to the petitioner. Consequently, the Court quashed the impugned Assessment Order and remanded the proceedings for a fresh assessment order to be passed after granting the petitioner an opportunity to reply to the SCN within the prescribed timelines.
The High Court, in its order dated August 13, 2024, granted the petitioner's request for leave to withdraw the writ petition. The Court explicitly stated that liberty was granted with the condition that all contentions of the petitioner were kept open to be raised in appropriate proceedings. Consequently, the writ petition was disposed of as withdrawn. The Court did not decide any substantive issues on merits related to the income-tax assessment. The ratio decidendi would be that a party can withdraw a writ petition while preserving their right to pursue other legal remedies.
The High Court held that the impugned order dated October 16, 2023, passed by respondent no. 1, cancelling the petitioner's provisional registration, was passed without affording the petitioner an adequate opportunity of being heard. The Court noted that the notice for hearing was dispatched from the respondent's office on August 22, 2023, and received by the petitioner on August 25, 2023, which was after the scheduled hearing date of August 21, 2023. Furthermore, the email communication of the notice was sent to an incorrect email address, not registered with the petitioner, despite the correct email addresses being updated on the Income-tax Department's portal. The Court found that an erroneous communication of the notice resulted in the order being passed without the petitioner being heard, and admittedly, no opportunity of reply or personal hearing was granted. Therefore, in the interest of justice, the Court quashed and set aside the impugned order and remanded the proceedings to the Assessing Officer. The petitioner was permitted to reply to the show cause notice within two weeks, and the Assessing Officer was directed to grant an opportunity of hearing at least 7 days in advance, communicated via email to both correct email addresses, before passing an appropriate order. All contentions on the pending application were kept open.
The Tribunal held that the notice dated March 22, 2024, issued under Section 148 of the Income Tax Act, 1961, along with the preceding notice under Section 148A(b) and order under Section 148A(d), were invalid. The Court reasoned that the Central Government's Notification dated March 29, 2022, implementing a faceless mechanism under Section 151A of the Act, mandates that such notices and orders must be issued by a Faceless Assessing Officer (FAO) through an automated allocation system. The issuance by the Jurisdictional Assessing Officer (JAO) was a direct contravention of this scheme. The Court relied on its previous decisions in Hexaware Technologies Limited, Nainraj Enterprises Pvt. Ltd., and Kairos Properties Pvt. Ltd., which clearly established that the JAO lacks jurisdiction to issue such notices when a faceless mechanism is in place. The Court found that an act done contrary to statutory provisions causes prejudice to the assessee, and thus, the Petitioner did not need to prove further prejudice. Consequently, the Writ Petition was allowed, quashing and setting aside the impugned notices and order. The Court explicitly stated that it had not expressed any opinion on other issues raised in the petition, as they were not necessary to decide.
The High Court allowed the application for condonation of delay. The Court reasoned that the Applicant had diligently prosecuted the matter by filing a revision within the period of limitation. Upon objection to the revision's maintainability, the matter was re-examined, and a decision was taken to file an appeal. The Court found that the acquittal was on default of appearance and not on merits, supporting the Applicant's contention of a bona fide belief in pursuing the revision. The Court applied the principles of Section 14 of the Limitation Act, finding that the prior proceeding (revision) was prosecuted with due diligence and good faith, and its failure was due to a defect of jurisdiction or a cause of a like nature. The Court noted that the Applicant was entitled to the exclusion of time spent litigating before the wrong forum. The Court adopted a pragmatic approach, considering the unwarranted acquittal and the potential for failure of justice, and applied the concept of sufficient cause liberally, as supported by various precedents. The Court concluded that the reasons disclosed in the affidavit constituted sufficient cause to condone the delay, and the application for leave to appeal along with the memo of appeal was allowed.
The Tribunal held that the impugned notice dated March 31, 2024, issued under Section 148 of the Income Tax Act, 1961, and the preceding order under Section 148A(d) dated March 31, 2024, were invalid. The Court found that these were issued by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), which is a mandatory requirement under Section 151A of the Act read with the Notification dated March 29, 2022. The Tribunal relied on the Division Bench judgment in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., which clearly stated that the Scheme dated March 29, 2022, is applicable for the issuance of notice under Section 148 of the Act, and only the FAO can issue such a notice. The Court rejected the Revenue's argument that the Scheme was only applicable to the extent provided in Section 144B, holding that Section 151A itself contemplates a scheme for both assessment and issuance of notice under Section 148. The Court stated that an act done contrary to the provisions of the statute is invalid and causes prejudice to the assessee. Therefore, the Writ Petition was allowed, quashing and setting aside the order dated March 31, 2024, passed under Section 148A(d) and the subsequent notice dated March 31, 2024, issued under Section 148, as they were without jurisdiction and bad in law. The Court made it clear that it had not expressed any opinion on other issues raised in the petition.
The High Court held that the impugned notice dated March 21, 2023, issued under Section 148 of the Income Tax Act, 1961, and the order dated March 21, 2023, passed under Section 148A(d) of the Act, were invalid. The Court found that these actions were not in compliance with the Scheme notified by the Central Government for implementing Section 151A of the Act. The Scheme, being a subordinate legislation tabled before Parliament, governs proceedings under Sections 148A and 148. Following the explicit declaration of law in the case of Hexaware Technologies Limited, the Court concluded that the Jurisdictional Assessing Officer lacked the jurisdiction to issue the impugned order and notices. The Court reasoned that the Scheme mandates automated allocation for issuing notices under Section 148, and the JAO cannot exercise this power. Therefore, the proceedings initiated were rendered invalid. The Court quashed the impugned order and notice. The Court explicitly stated that it had not expressed any opinion on other issues raised in the Writ Petition, which were expressly left open.
The High Court found substantial merit in the revenue's contention that the petitioner had availed of alternate remedies. The Court held that once a substantive appeal has been filed, and the assessment order and notices are challenged on grounds of illegality concerning Section 151A and Section 151, as interpreted by the High Court in Hexaware and Siemens, the Appellate Authority and Revisionary Authority are bound by these decisions and must consider such legal positions. Therefore, the petitioner is not precluded from raising these contentions before the pending appellate or revisional authorities. The Court was not persuaded to entertain the writ petition as an appeal was already filed and revision proceedings were pending. However, recognizing that if the impugned assessment order and notice under Section 148 are prima facie illegal and contrary to the law laid down by the High Court, they ought not to be given effect to until the appellate and revisionary proceedings are decided, the Court ordered that the impugned assessment order shall remain stayed till the proceedings before the Appellate or Revisionary Authority are decided. All contentions of the petitioner on the pending proceedings were expressly kept open.