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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.
The High Court allowed the petitions and quashed the orders of issuance of process against the petitioners and the consequent orders of the Additional Sessions Court. The Court relied on the ratio laid down in the Supreme Court case of G.L. Didwania and another Vs. Income Tax Officer and another. The Court observed that in the present case, the prosecution was launched for delayed deposit of TDS, and it was an admitted fact that the TDS deducted by the company had already been deposited with interest. The Court noted that the Supreme Court in G.L. Didwania held that if a finding of concealment or false statement, which forms the crux of the prosecution, is set aside by the Income Tax Appellate Tribunal, then criminal proceedings cannot be sustained. Although the present case pertains to delayed TDS deposit and not concealment, the principle that a conclusive finding by the Tribunal can render subsequent prosecution unsustainable was applied. The Court found that the prosecution could not be sustained in light of the admitted fact of TDS deposit with interest, and the reasoning in G.L. Didwania was squarely applicable.
The High Court found substantial merit in the revenue's contention that the petitioner had availed of alternate statutory remedies. The Court held that once an appeal and a review application are pending, and the issues raised (regarding the validity of the notice and assessment order based on Section 151) can be adjudicated by the appellate and revisional authorities, the High Court should not entertain a writ petition under Article 226. The Court reasoned that the CIT(A) and the Principal Chief Commissioner, being bound by the jurisdictional High Court's decisions in Hexaware and Siemens, would consider the petitioner's contentions regarding the illegality of the proceedings under Section 151. Therefore, the Court did not entertain the writ petition. However, to protect the petitioner's interests pending the decision of the appellate and revisional authorities, the Court ordered that the impugned assessment order shall remain stayed until those proceedings are decided. All contentions of the petitioner on the pending proceedings were expressly kept open.
The High Court allowed the petitions and quashed the orders of issuance of process against the petitioners and the consequent orders of the Additional Sessions Court. The Court relied on the ratio laid down in the Supreme Court case of G.L. Didwania and another Vs. Income Tax Officer and another. The Court observed that in the present case, the prosecution was launched for delayed deposit of TDS, and it was an admitted fact that the TDS deducted by the company had already been deposited with interest. The Court noted that the Supreme Court in G.L. Didwania held that if a finding of concealment or false statement, which forms the crux of the prosecution, is set aside by the Income Tax Appellate Tribunal, then criminal proceedings cannot be sustained. Although the present case pertains to delayed TDS deposit and not concealment, the principle that a conclusive finding by the Tribunal can render subsequent prosecution unsustainable was applied. The Court found that the prosecution could not be sustained in light of the admitted fact of TDS deposit with interest, and the reasoning in G.L. Didwania was squarely applicable.
The High Court allowed the petitions and quashed the orders of issuance of process against the petitioners and the consequent orders of the Additional Sessions Court. The Court relied on the ratio laid down in the Supreme Court case of G.L. Didwania and another Vs. Income Tax Officer and another. The Court observed that in the present case, the prosecution was launched for delayed deposit of TDS, and it was an admitted fact that the TDS deducted by the company had already been deposited with interest. The Court noted that the Supreme Court in G.L. Didwania held that if a finding of concealment or false statement, which forms the crux of the prosecution, is set aside by the Income Tax Appellate Tribunal, then criminal proceedings cannot be sustained. Although the present case pertains to delayed TDS deposit and not concealment, the principle that a conclusive finding by the Tribunal can render subsequent prosecution unsustainable was applied. The Court found that the prosecution could not be sustained in light of the admitted fact of TDS deposit with interest, and the reasoning in G.L. Didwania was squarely applicable.
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 held that the impugned notice dated April 5, 2022, issued under Section 148 of the Income Tax Act, 1961, and the order dated April 5, 2022, passed under Section 148A(d) of the Act, were invalid. The Court found that these were issued by the Jurisdictional Assessing Officer (JAO) and not in compliance with the mandatory faceless mechanism prescribed by Section 151A of the Act and the scheme notified by the Central Government. Relying on the decision in Hexaware Technologies Limited, the Court stated that for a notice to be validly issued under Section 148, compliance with Section 151A and the faceless mechanism was mandatory. The Court also noted the petitioner's contention regarding the invalidity of the sanction for reassessment proceedings initiated beyond three years, referencing the ruling in Siemens Financial Services Pvt. Ltd. which held that sanction must be obtained from authorities specified in Section 151(ii) in such cases. The Court allowed the writ petition, quashing and setting aside the impugned order and notice. The Court explicitly stated that it had not expressed any opinion on other issues raised in the petition, leaving them open.
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 High Court held that the notice dated 25 July, 2022, issued under Section 148 of the Income-tax Act, 1961, for AY 2013-14, was indeed barred by limitation. The Court found that the six-year limitation period, as applicable prior to the amendment by the Finance Act, 2022, expired on 31 March, 2020, and was extended to 31 March, 2021. The notice issued in July 2022 was significantly beyond this period. The Assessing Officer erred by applying the amended provisions of Section 149 to a case where the limitation had already expired. The Court ruled that a notice issued without jurisdiction renders the subsequent assessment order illegal. The Court rejected the revenue's contention regarding delay and laches, stating that acquiescence to an illegal order cannot legitimize it. The petition was allowed, quashing the impugned notices and orders.
The High Court found substantial merit in the revenue's contention that the petitioner should pursue the alternate statutory remedies already availed. The Court held that once an assessee has filed a substantive appeal and initiated review proceedings, and these proceedings are pending, the High Court should not entertain a writ petition to adjudicate issues that can be decided by the appellate or revisional authorities. These authorities are bound by the jurisdictional High Court's decisions in Hexaware and Siemens and must consider the petitioner's contentions regarding the illegality of the notice and assessment order in light of those decisions. Therefore, the Court was not persuaded to entertain the writ petition. However, recognizing the petitioner's prima facie correctness that the impugned order and notice might be illegal as per the High Court's precedents, the Court ordered that the impugned assessment order shall remain stayed until the proceedings before the CIT(A) or the Revisionary Authority are decided. All contentions of the petitioner on the pending proceedings were expressly kept open. The petition was disposed of in these terms.
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 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 held that the notice dated March 20, 2024, issued under Section 148 of the Income Tax Act, 1961, and the order passed under Section 148A(d) dated March 20, 2024, 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 Court relied on the explicit declaration of law in the case of Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., which clearly stated that for a notice to be validly issued for reassessment under Section 148, the Revenue must be compliant with Section 151A. The Division Bench in Hexaware had held that the JAO and FAO have exclusive jurisdictions and that the Scheme mandates automated allocation of cases, meaning only the randomly allocated officer (FAO) has jurisdiction to issue the notice. The Court further noted that an act done by an authority contrary to the provisions of the statute is invalid and causes prejudice to the assessee. Therefore, the grievance of the Petitioner-Assessee regarding the invalid issuance of the notice was sustainable, and the proceedings initiated were vitiated. The Writ Petition was allowed, quashing the impugned order under Section 148A(d) and the impugned 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 July 23, 2022, 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) lacked the jurisdiction to issue these notices, as Section 151A of the Act, read with the Notification dated March 29, 2022, mandates that such proceedings must be conducted through a Faceless Assessing Officer (FAO) via an automated allocation mechanism. The Court relied on its previous decision in Hexaware Technologies Limited, which clearly established that there is no concurrent jurisdiction between the JAO and FAO in this regard, and adherence to the faceless scheme is mandatory. The Court reasoned that any action taken contrary to the statutory provisions causes prejudice to the assessee, and therefore, the Petitioner was not required to prove further prejudice. Consequently, the Writ Petition was allowed, quashing the notice under Section 148, the order under Section 148A(d), and the notices 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 challenge posed by the four applicants (including Smt. Samiksha Chandrakar and Shri Pandurang Kulkarni) against the impugned seniority list dated December 31, 2020, was unsustainable. Consequently, their applications before the MAT deserved to be dismissed. The Court found that the MAT, after concluding that the applications were unsustainable, should not have proceeded to issue suggestions and directions regarding promotions and seniority, as this was unwarranted and affected parties not present before it. The High Court quashed the suggestions and directions issued by the MAT in paragraphs 87 and 88 of its order. The Court noted that it had not issued any prohibitory orders or stayed the MAT's judgment, and the State was not obligated to refrain from issuing promotion orders. The Court upheld the MAT's verdict dismissing the original applications. Writ Petitions filed by the State (WP 11692/2022 and WP 11762/2022) were allowed, and the Transfer Applications were dismissed. Other petitions were either dismissed or disposed of.
The High Court held that the Maharashtra Administrative Tribunal (MAT) had erred in issuing suggestions and directions in paragraphs 87 and 88 of its order. The Tribunal's conclusion that the applications before it, including those challenging the seniority list dated 31.12.2020, deserved rejection meant it should not have ventured further. The Court reasoned that once the grievance of the applicants was found unsustainable, the Tribunal should not have issued guidelines affecting parties not present before it. Citing case law, the Court emphasized that courts should decide issues with a cause of action and avoid purely academic matters. Therefore, the suggestions and consequential directions issued by the MAT were quashed and set aside. The Court found the challenge to the seniority list by the four applicants unsustainable and dismissed their Transfer Applications. Consequently, the State's writ petitions were allowed, and the MAT's suggestions/directions were quashed. The petitions filed by individuals challenging the seniority list were dismissed.
The High Court held that the Maharashtra Administrative Tribunal (MAT) had erred in issuing suggestions and directions concerning promotions after concluding that the applications before it were unsustainable. The Court reasoned that once the MAT determined the grievance of the four applicants was baseless, it should not have travelled beyond their prayers and issued guidelines, particularly when all potentially affected parties were not present before the Tribunal. The Court cited legal precedents like Kusum Ingots and Alloys Limited, Jotun India Private Limited, and United Forum to emphasize that courts should decide issues with a cause of action and refrain from purely academic matters. Consequently, the Court found the challenge posed by the four applicants against the impugned seniority list dated 31.12.2020 to be unsustainable. The suggestions and directions issued by the MAT in paragraphs 87 and 88 of its order were quashed and set aside. The Court dismissed the transfer applications that were the subject of the MAT's decision. The Court also noted that it had not issued any prohibitory orders or stayed the MAT's judgment, and that any further promotions could be made subject to the outcome of these petitions.
The High Court held that the Maharashtra Administrative Tribunal (MAT) erred in making suggestions and issuing directions concerning promotions and seniority when it had already concluded that the applications before it were unsustainable and deserved rejection. The Court reasoned that once the MAT found the grievance of the applicants to be unsustainable, it should not have proceeded further to issue guidelines affecting other officers not impleaded before it, citing principles of natural justice and the need for a cause of action. The Court also found that the challenge posed by the four applicants against the impugned seniority list dated December 31, 2020, was unsustainable. Consequently, the Court quashed the suggestions and directions issued by the MAT. The writ petitions filed by the State (WP Nos. 11692/2022 and 11762/2022) were allowed, and the corresponding Transfer Applications before the MAT were dismissed. Other writ petitions challenging the MAT's order were dismissed as they were rendered infructuous or did not deserve consideration in light of the Court's findings. The Court noted that it had not issued any order staying the MAT's judgment or injuncting the State from issuing promotion orders, and any promotions made were subject to the outcome of these petitions.
The High Court held that the Maharashtra Administrative Tribunal (MAT) erred in issuing suggestions and directions concerning promotions after concluding that the applications before it deserved rejection. The Court found that once the MAT determined the grievance of the applicants was unsustainable, it should not have travelled further to issue guidelines affecting parties not present before it. The Court cited case law emphasizing that courts should decide issues with a cause of action and avoid purely academic matters. Consequently, the suggestions and directions issued by the MAT in paragraphs 87 and 88 were quashed and set aside. The Court found the challenge posed by the four applicants to the impugned seniority list unsustainable and dismissed their transfer applications. The State's writ petitions were allowed, and the transfer applications were dismissed. Other petitions were either dismissed or disposed of.
The High Court held that the Maharashtra Administrative Tribunal (MAT) erred in issuing suggestions and directions after concluding that the Transfer Applications of the four applicants deserved rejection. The Tribunal should not have travelled beyond the prayers made by the applicants once their grievance was found unsustainable. The Court cited Kusum Ingots and Alloys Limited, Jotun India Private Limited, and United Forum and others to support the principle that courts should decide issues with a cause of action and refrain from purely academic matters. Consequently, the suggestions and directions issued by the MAT in paragraphs 87 and 88 were quashed and set aside. The High Court found that the challenge posed by the four applicants against the impugned seniority list dated December 31, 2020, was unsustainable, and their Transfer Applications deserved to be dismissed. The State's writ petitions (WP Nos. 11692/2022 and 11762/2022) were allowed, dismissing the Transfer Applications and quashing the MAT's directions. Writ Petition No. 12699/2022 was disposed of as it did not deserve consideration. The remaining writ petitions (WP Nos. 9163/2022, 9631/2022, 9632/2022, and 12675/2022) were dismissed. The Court noted that it had not issued any prohibitory or injunctory orders, and had merely upheld the Tribunal's verdict dismissing the proceedings before it.
The High Court allowed the Writ Petition in terms of prayer clause-C, quashing and setting aside the impugned notice dated March 16, 2024, for having been issued to a dead person. The Court reasoned that it is the Department's duty to ensure notices are issued and served on the intended recipient. If knowledge of the assessee's death is acquired after issuing a notice, there must be a mechanism to recall it, as attempting to serve a dead person is a wasteful exercise. The Court noted that legal heirs are not authorized to respond unless served with a notice. While acknowledging the revenue's argument about the absence of a specific withdrawal provision, the Court advised the Central Board of Direct Taxes (CBDT) to issue appropriate instructions under Section 119 of the Income Tax Act to recall or withdraw notices issued to deceased individuals once their death is known. The Department was granted liberty to issue a fresh notice to the appropriate legal representative. Contentions regarding the notice were kept open, considering the Department's lack of knowledge and the widow's non-intimidation of the death.
The High Court held that the appeals did not give rise to a substantial question of law and dismissed them. The Court noted that the AO's approach of making additions based on general information from the Sales Tax Department, without specific verification of the assessee's transactions or providing the assessee with such specific information, was questionable. The Court emphasized that a full addition could only be made with proper proof of bogus purchases. In situations like this, the AO should consult the Sales Tax Department for a coordinated approach and thorough inquiry into specific transactions. The ITAT's direction to estimate income at 12.5% on the disputed purchases was considered a partial interference in favor of the revenue, but the Court ultimately found no substantial question of law to interfere with the ITAT's order, particularly in light of the decision in CIT v/s. Mohammad Haji Adam & Company, where similar appeals were dismissed. The operative direction was the dismissal of the appeals.
The High Court held that the appeals did not give rise to a substantial question of law and dismissed them. The Court noted that the AO's approach of making additions based on general information from the Sales Tax Department, without specific verification of the assessee's transactions or providing the assessee with such specific information, was questionable. The Court emphasized that a full addition could only be made with proper proof of bogus purchases. In situations like this, the AO should consult the Sales Tax Department for a coordinated approach and thorough inquiry into specific transactions. The ITAT's direction to estimate income at 12.5% on the disputed purchases was considered a partial interference in favor of the revenue, but the Court ultimately found no substantial question of law to interfere with the ITAT's order, particularly in light of the decision in CIT v/s. Mohammad Haji Adam & Company, where similar appeals were dismissed. The operative direction was the dismissal of the appeals.
The High Court has not decided the validity of Section 147-A of the Income Tax Act, 1961, in this excerpt. Instead, the court has issued procedural directions. It has mandated that all Writ Petitions challenging the validity of Section 147-A be identified and transferred to the Principal Seat of the High Court. Petitioners are permitted to amend their petitions to include challenges to this section within a specified timeframe. The court has also allowed petitioners to opt out of transferring certain matters to the Principal Seat by filing a Pursis. The judgment's primary focus is on the administrative transfer of cases to facilitate a consolidated hearing on the constitutional validity of Section 147-A at the Principal Seat.
The High Court held that the notice dated March 21, 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 and bad in law. The Court relied on the Division Bench judgment in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., which clearly stated that for proceedings under Section 148, the issuance of notice must be through an automated allocation to a Faceless Assessing Officer as per the scheme notified under Section 151A. The Court found that the Respondent-Revenue had not complied with this scheme. The Court also referred to its decisions in Nainraj Enterprises Pvt. Ltd. and Kairos Properties Pvt. Ltd. to support its view. The reasoning was that an act done 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 the impugned notice, order, 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 High Court allowed the Writ Petition. The Court held that the notice dated July 29, 2022, issued under Section 148, and the underlying prior notice and order under Sections 148A(b) and 148A(d) were invalid. This invalidity stemmed from the fact that these were issued by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), as mandated by Section 151A of the Income Tax Act, 1961, and the notification dated March 29, 2022, which introduced a faceless mechanism. The Court relied on the Division Bench judgment in Hexaware Technologies Limited, which clearly held that the issuance of notice under Section 148 must be through an automated allocation to a FAO and not by the JAO. The Court also noted that the judgment in Kairos Properties Pvt. Ltd. further affirmed that the scheme notified under Section 151A covers steps taken in issuing notices under Section 148A. Consequently, the entire proceedings initiated under Section 148 were vitiated. The Court explicitly stated that it had not expressed any opinion on the other issues raised, including the one concerning the sanction for proceedings initiated beyond three years, as it was not necessary to do so. The operative direction was to quash and set aside the impugned notices, order, and consequential assessment order.
The High Court held that the impugned notice dated April 29, 2022, issued under Section 148 of the Act, and the order of the same date under Section 148A(d) of the Act, were invalid. The Court found that these were issued by the Jurisdictional Assessing Officer (JAO) and not under the mandatory faceless mechanism as required by Section 151A of the Act. The Court relied on its prior decision in Hexaware Technologies Limited vs. Assistant Commissioner of Income Tax, which held that for a notice to be validly issued under Section 148, compliance with Section 151A and the faceless mechanism notified by the Central Government is mandatory. The Court also noted the petitioner's contention that the proceedings were initiated well after the expiry of three years from the end of the relevant assessment year, which, according to the decision in Siemens Financial Services Pvt. Ltd. vs. Deputy Commissioner of Income Tax, requires sanction from authorities of the rank specified in Section 151(ii) of the Act, not Section 151(i). The Court found that the sanction obtained was not in compliance with the law. Consequently, the Court allowed the writ petition, quashing and setting aside the show cause notice, the order under Section 148A(d), the notice under Section 148, and the consequential assessment order. The Court explicitly stated that it had not expressed any opinion on other issues raised in the writ petition, which were expressly kept open.
The High Court held that the notice dated April 12, 2022, issued under Section 148 of the Income Tax Act, 1961, and the preceding proceedings under Section 148A were invalid. The Court relied on its previous decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income-tax & 4 Ors., which clarified that Section 151A of the Act, read with the notification dated March 29, 2022, mandates that notices under Section 148 must be issued by a Faceless Assessing Officer (FAO) through an automated allocation process. The Court found that the Jurisdictional Assessing Officer (JAO) had no jurisdiction to issue the impugned notice, as the revenue had not complied with the faceless scheme. The Court also referred to its decisions in Nainraj Enterprises Pvt. Ltd. Vs. The Deputy Commissioner of Income-tax, Circle-4(3)(1), Mumbai & Ors. and Kairos Properties Pvt. Ltd. vs. Assistant Commissioner of Income-tax and Ors., which supported this view. Consequently, the writ petition was allowed, and the notice was declared invalid. The Court explicitly stated that it had not expressed any opinion on other issues raised in the petition.
The High Court allowed the writ petition. The Court held that the impugned notice dated July 29, 2022, issued under Section 148 of the Act, and the order of the same date under Section 148A(d) of the Act, were issued by the Jurisdictional Assessing Officer (JAO) and not under the mandatory faceless mechanism as required by Section 151A of the Act. Citing the decision in Hexaware Technologies Limited vs. Assistant Commissioner of Income Tax, the Court found that the Scheme notified under Section 151A, which governs proceedings under Sections 148A and 148, mandates a faceless mechanism, and issuance by the JAO is contrary to law. The Court also noted the petitioner's contention regarding the invalid sanction for reassessment proceedings initiated beyond three years, referencing Siemens Financial Services Pvt. Ltd. vs. Deputy Commissioner of Income Tax, where it was held that sanction under Section 151(ii) is mandatory in such cases. Since the JAO had no jurisdiction to issue the impugned order and notices, the writ petition was allowed, quashing the show cause notice, the order under Section 148A(d), the notice under Section 148, and the assessment order. The Court explicitly stated that no opinion was expressed on other issues raised in the writ petition, which were kept open.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, and the preceding proceedings under Section 148A 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 judgment in Hexaware Technologies Limited Vs. Assistant Commissioner of Income-tax & 4 Ors., the Court reiterated that Section 151A mandates a faceless mechanism for issuance of notice under Section 148 and for assessment/reassessment proceedings. The Court reasoned that Section 148A is inextricably linked to Section 148 and the faceless scheme, as notified, covers both aspects. The argument that the scheme only applied to the extent of Section 144B and excluded Section 148A was rejected, as it would render parts of the scheme otiose and contravene the objectives of Section 151A. The Court concluded that the JAO had no jurisdiction to issue the impugned notice. Consequently, the Writ Petition was allowed, and the impugned notice, order, and notice under Section 148 were quashed and set aside. 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) in accordance with the scheme framed under Section 151(A). The Court relied on its previous decision in Hexaware Technologies Limited Vs. the Assistant Commissioner of Income Tax and Others, which had quashed and set aside a similar notice. Consequently, the notice issued to the petitioner was quashed and set aside. Any further demand notice or penalty notice arising from this unsustainable notice was also set aside. The Court left open all contentions of both sides that were not covered by the Hexaware Technologies judgment and were available in proceedings that could be initiated by the FAO under the Section 151(A) scheme.
The High Court held that the notice dated April 5, 2024, issued under Section 148 of the Income Tax Act, 1961, and the underlying order under Section 148A(d) of the Act 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, the Court reiterated that Section 151A contemplates a Scheme for both assessment/reassessment and the issuance of notice under Section 148, and this Scheme mandates that such notices must be issued by the FAO, not the JAO. The Court found that the JAO had no jurisdiction to issue the impugned notice. Consequently, the Writ Petition was allowed, and the impugned notice and order, along with any consequential demand or penalty notices, were quashed and set aside. 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 has not decided the merits of the challenge to Section 147-A of the Income Tax Act, 1961. Instead, it has issued procedural directions. The court has ordered that all Writ Petitions where the validity of Section 147-A is challenged should be identified and transferred to the Principal Seat of the High Court. Petitioners are granted permission to amend their petitions to include a challenge to Section 147-A within one week. If amendments are necessary and not carried out before transfer, they can be done within one week after the transfer to the Principal Seat. Petitioners are also given the liberty to file a Pursis if they do not wish for their matters to be transferred to the Principal Seat. The matters are being transferred for final hearing on a similar group scheduled for 31.08.2026.
The High Court held that the disallowance made by the Assessing Officer under Section 40A(9) was unjustified. The Tribunal and CIT(A) had concurrently found that the payments had a commercial linkage to the business and resulted in benefits to the assessee's operations. The Court relied on the Supreme Court's decision in Sri Venkata Sathyanarayana Rice Mill Contractors Co. Vs. Commissioner of Income Tax, which held that contributions to a public welfare fund, if directly connected or related to the carrying on of the assessee's business or resulting in benefits to the assessee's business, are allowable deductions under Section 37(1). The Court found that the social welfare and community expenses generated local harmony and goodwill, benefiting the assessee's business. The fact that these expenses were mentioned in the Memorandum of Settlement did not alter their nature as revenue expenditure under Section 37(1) nor attract Section 40A(9). The Court concluded that Section 40A(9) was not applicable. Regarding the second question, the Court noted that the payments were not required by the Industrial Disputes Act or any other law, but this was irrelevant as Section 40A(9) was not attracted. The disallowance was deleted, and the appeals were dismissed.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, is unsustainable and quashed and set it aside. The Court relied on its previous judgment in the case of Hexaware Technologies Limited Vs. the Assistant Commissioner of Income Tax and Others, which ruled that a notice under Section 148, if not issued by the Faceless Assessing Officer (FAO) in accordance with the scheme framed under Section 151(A), is unsustainable. Consequently, any further demand notice or penalty notice issued in furtherance of the impugned notice also stands set aside. The Court clarified that all contentions available to the parties in a proceeding that can be initiated by the FAO under Section 151(A) are left open, except for those covered by the Hexaware Technologies judgment. The ratio decidendi is that notices issued under Section 148 must adhere to the faceless assessment scheme, and non-compliance renders them invalid.
The Bombay High Court at Aurangabad Bench held that the notice issued under Section 148 of the Income Tax Act, 1961, dated 30/07/2022, for assessment year 2017-2018, was unsustainable. Following the precedent set in Hexaware Technologies Limited (supra), the Court ruled that such a notice could only be issued by the Faceless Assessing Officer (FAO) and not by the Jurisdictional Assessing Officer (JAO). The Court reasoned that the scheme framed under Section 151(A) of the Act mandates issuance by the FAO. Consequently, the notice was quashed and set aside. Any further demand or penalty notices issued in furtherance of this unsustainable notice were also set aside. The Court left open all contentions of both sides that could be raised in a proceeding initiated by the FAO under the scheme, except those covered by the Hexaware Technologies judgment.
The High Court held that the disallowance made by the Assessing Officer under Section 40A(9) was unjustified. The Tribunal and CIT(A) had concurrently found that the payments had a commercial linkage to the business and resulted in benefits to the assessee's operations. The Court relied on the Supreme Court's decision in Sri Venkata Sathyanarayana Rice Mill Contractors Co. Vs. Commissioner of Income Tax, which held that contributions to a public welfare fund, if directly connected or related to the carrying on of the assessee's business or resulting in benefits to the assessee's business, are allowable deductions under Section 37(1). The Court found that the social welfare and community expenses generated local harmony and goodwill, benefiting the assessee's business. The fact that these expenses were mentioned in the Memorandum of Settlement did not alter their nature as revenue expenditure under Section 37(1) nor attract Section 40A(9). The Court concluded that Section 40A(9) was not applicable. Regarding the second question, the Court noted that the payments were not required by the Industrial Disputes Act or any other law, but this was irrelevant as Section 40A(9) was not attracted. The disallowance was deleted, and the appeals were dismissed.
The High Court held that the impugned notice dated March 31, 2024, issued under Section 148 of the Income Tax Act, 1961, and the underlying prior notice and order under Section 148A(b) and Section 148A(d) respectively, 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 and the Notification dated 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 established that the Scheme mandates automated allocation and that only the FAO has the jurisdiction to issue notices under Section 148. The Court stated 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. The Writ Petition was allowed, quashing the impugned order and notice. 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 Tribunal held that the Writ Petition is allowed. The Court found that the impugned notice dated March 27, 2023, 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 issued by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO). This contravenes the mandate of Section 151A of the Act and the scheme notified by the Central Government, which requires such proceedings to be conducted in a faceless manner through automated allocation. The Court relied on its previous decision in Hexaware Technologies Limited, which clearly held that the JAO has no jurisdiction to issue such notices when a faceless mechanism is prescribed. The Court stated that an act done contrary to the provisions of the statute itself causes prejudice to the assessee, and therefore, the Petitioner was not required to prove further prejudice. Consequently, the entire proceedings initiated under Section 148A and Section 148 were vitiated. The Court explicitly stated that it has not expressed any opinion on other issues raised in the Writ Petition, as it was disposed of solely on the ground of non-compliance with Section 151A.
The High Court held that the impugned notice dated April 25, 2023, issued under Section 148 of the Income Tax Act, 1961, and the order dated April 25, 2023, passed under Section 148A(d) of the Act, were invalid. The Court relied on its previous decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax, which held that Section 151A of the Act mandates the adherence to the faceless mechanism for the issuance of notices under Section 148 and for assessment/reassessment proceedings. The Scheme notified on March 29, 2022, which is a form of subordinate legislation, clearly provides for automated allocation of cases and specifies that only the Faceless Assessing Officer (FAO) can issue such notices, not the JAO. The Court found that the issuance by the JAO was contrary to law and the prescribed procedure, rendering the action invalid and causing prejudice to the assessee. Therefore, the writ petition was allowed, quashing the impugned order and notices. 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 CBDT's Order dated September 28, 2021, to the extent it imposed additional eligibility conditions, specifically in paragraphs 2 and 4(i), was beyond the scope of the CBDT's powers under Section 119 of the Income Tax Act, 1961. The Court reasoned that while the CBDT had the power to extend the time limit for filing applications to September 30, 2021, it could not impose a cut-off date for an assessee's eligibility to make an application under Section 245C. The Act only prescribes a cut-off date for the filing of the application itself (February 1, 2021), not for the assessee's eligibility. The Court found that the condition requiring eligibility as of January 31, 2021, was invalid and bad in law. Furthermore, the Court noted that the Petitioner's eligibility was dependent on the revenue issuing a notice under Section 153A, and the revenue's delay in issuing this notice should not prejudice the Petitioner's right to seek settlement. Consequently, the impugned order of the Interim Board of Settlement rejecting the Petitioner's application on the basis of these invalid conditions was quashed and set aside. The Petitioner's settlement application was held to be eligible for consideration by the Interim Board.
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 under Section 148A(d) of the Act 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 and the Scheme notified thereunder. The Court relied on its previous decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., which clearly established that for reassessment proceedings under Section 148, the notice must be issued by the FAO, and there is no concurrent jurisdiction of the JAO and FAO in this regard. The Court stated that an act done contrary to the provisions of the statute causes prejudice to the assessee, and the assessee is not required to prove further prejudice. Therefore, the impugned notice and order were quashed and set aside. The Court explicitly stated that it had not expressed any opinion on other issues raised in the Writ Petition, as it was disposed of solely on the ground of non-compliance with Section 151A.
The Bombay High Court held that the notice dated April 29, 2024, issued under Section 148 of the Income Tax Act, 1961, and the underlying order under Section 148A(d) of the Act 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 and the Scheme notified thereunder. 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 is applicable for the issuance of notice under Section 148, and only the FAO can issue such a notice. The Court stated that an act done contrary to the provisions of the statute itself causes prejudice to the assessee, and therefore, the Petitioner was not required to prove further prejudice. Consequently, the Writ Petition was allowed, and the impugned notice and order, along with any consequential demand or penalty notices, were quashed and set aside. 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 issued under Section 148 and the order under Section 148A(d) were invalid and bad in law because they were issued by the Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO). This violated the mandate of Section 151A of the Income Tax Act, 1961, and the Scheme dated March 29, 2022, notified thereunder. The Court relied on its previous decisions in *Hexaware Technologies Limited* and *Vikram Developers Private Limited*, which established that the Scheme mandates automated allocation and issuance of notices by FAO, and that any reassessment order passed pursuant to a foundationally defective notice under Section 148 would also stand quashed. The Court found that an act done contrary to the provisions of the statute itself causes prejudice, and therefore, the Petitioner was not required to prove further prejudice. Consequently, the impugned notice, the reassessment order, and any consequential demand or penalty notices 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.
The Tribunal held that the notice dated April 5, 2024, issued under Section 148 of the Act and the order under Section 148A(d) of the Act were invalid. The reasoning was based on the clear mandate of Section 151A of the Act and the Scheme notified by the CBDT, which requires reassessment proceedings, including the issuance of notices under Section 148, to be conducted in a faceless manner through automated allocation. The Tribunal relied on the Division Bench judgment in Hexaware Technologies Limited, which unequivocally held that only the FAO can issue notices under Section 148 and that there is no concurrent jurisdiction of the JAO and FAO in this regard. The Court found that the JAO had no jurisdiction to issue the impugned notice. The ratio decidendi is that an act done by an authority contrary to the provisions of the statute, such as issuing a notice without following the prescribed faceless procedure, is bad in law and causes prejudice to the assessee. Consequently, the Writ Petition was allowed, and the impugned notice and order, along with any consequential demand or penalty notices, were quashed and set aside. 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 dated March 31, 2023, issued under Section 148 of the Income Tax Act, 1961, was invalid because it was 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 dated March 29, 2022, which mandates faceless issuance of such notices, renders the entire reassessment proceedings void. The Court relied on its previous decisions in *Hexaware Technologies Limited* and *Vikram Developers Private Limited*, which established that a reassessment order passed pursuant to a foundationally defective notice under Section 148 would also stand quashed. Consequently, any consequential demand or penalty notices would also be set aside. The Court emphasized that an act done contrary to the statute causes prejudice to the assessee, and the assessee is not required to prove further prejudice. The Writ Petition was allowed, quashing the impugned notice and the reassessment order. The Court explicitly stated that it was not expressing any opinion on other issues raised in the petition, as they were not necessary to decide the case.
The High Court held that the notice dated 27 July, 2022, issued under Section 148 of the Income Tax Act, 1961, and the underlying order under Section 148A(d) of the Act, 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 and the Scheme notified thereunder. Relying on its own prior decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., the Court reiterated that the Scheme clearly mandates that notices under Section 148 must be issued in a faceless manner by the FAO. The Court rejected the Revenue's argument that the Scheme was not applicable to Section 148 notices, stating that such an interpretation would render parts of the Scheme otiose. The Court emphasized that an authority acting contrary to the statute causes prejudice to the assessee. Consequently, the Writ Petition was allowed, and the impugned notice and order were quashed and set aside. Any consequential demand or penalty notices were also quashed. 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 notice dated March 18, 2024, issued under Section 148 of the Income Tax Act, 1961, and the underlying order under Section 148A(d) of the Act 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 and the Scheme notified thereunder. The Court relied on its previous decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., which clearly established that for reassessment proceedings under Section 148, jurisdiction lies exclusively with the FAO, and there is no concurrent jurisdiction of the JAO. The Court reasoned that the Scheme explicitly covers the issuance of notice under Section 148 in a faceless manner, and any deviation renders the proceedings void. The Court also noted that an act done contrary to the statute causes prejudice to the assessee, and thus, prejudice need not be separately proven. Consequently, the Writ Petition was allowed, and the impugned notice and order 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.
The High Court held that the notice dated August 26, 2022, issued under Section 148 of the Income Tax Act, 1961, and the order under Section 148A(d) of the Act 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. The Court relied on its previous decision in Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors., which clearly established that for reassessment proceedings under Section 148, the Scheme notified under Section 151A must be followed, and only the FAO has the jurisdiction to issue such notices. The Court emphasized that the Scheme, being subordinate legislation tabled in Parliament, cannot be partially ignored or contravened by subordinate authorities. The Court also noted a similar decision in Nainraj Enterprises Pvt. Ltd. Vs. The Deputy Commissioner of Income Tax, Circle-4(3)(1), Mumbai & Ors. Consequently, the Writ Petition was allowed, and the impugned notice and order, along with any consequential demand or penalty notices, 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.