Jurisdictional Assessing Officer Lacks Jurisdiction To Issue Reassessment Notices U/S 148 Of Income Tax Act: Rajasthan High Court

The Bench of Justice Pushpendra Singh Bhati and Munnuri Laxman observed that “the JAO shall not have the jurisdiction to issue notices under Section 148 of the Act of 1961, as it would not only render Section 151A weak, but may also lead to its diminishing activation.”

Section 147 of the Income Tax Act, 1961 gives discretion to the Assessing Officer (AO) to reopen the assessment proceedings when he/she has reason to believe that some of the income has escaped assessment.

Section 148 of the Income Tax Act, 1961 provides that the Income Tax Department can send a notice to the taxpayer under section 148 if the person deems that the taxpayer's income has not been assessed properly.

The assessee/petitioner's filed their Income- Tax Returns. The department issued notices under Section 133(6) of the Income Tax Act, 1961. The CBDT framed a Scheme, namely, e-Assessment of Income Escaping Assessment Scheme 2022, vide Notification No.18 of 2022/S.O. 1466(E) dated 29.03.2022.

In the said notification, the procedure for assessment, reassessment, & re-computation of income under Sections 147 & 148 of the Act of 1961 has been notified.

The notices which were issued under Sections 147 & 148 of the Act of 1961 were required to comply with the Scheme of 2022 and thus, ought to have been Faceless as enshrined in the CBDT Notification.

The assessee contended that the Scheme of 2022 as notified was adhering to all the parameters of Section 151A (3). Also, department had not followed the procedure, and once the CBDT Notification dated 29.03.2022 read with the legislative intention of Section 151A of the Act of 1961, it was out of the jurisdiction that the JAO has been given the power to issue the notices.

It was further contended by the assessee that any kind of power to a fixed person well identified by the department would render the whole Scheme redundant. Also, once the authority itself did not have the jurisdiction to issue notices, then all proceedings became illegal and ineffective.

Whereas the department contended that that the Faceless authorities themselves have concurrent jurisdictions and therefore, the JAO cannot be deprived of his power to conduct the assessment and reassessment of the returns. Also, the object of conferring jurisdiction upon the JAO was to have a human supervisory element, which could overcome any kind of deficiencies that would arise out of the faceless assessment.

The bench pointed out that Section 151A of the Act of 1961 deals with the assessment, reassessment and re computation provided in Sections 147 & 148 of the Act of 1961, and therefore, the same has to be faceless and the Faceless Assessing Officer (FAO) has to have an exclusive jurisdiction to issue the notices.

The bench further that the FAO has been assigned specific jurisdiction, and the Scheme also clearly indicates that the FAO has to be the jurisdictional authority. Also, the concurrent jurisdiction of FAO and the JAO, if accepted, would defeat the very purpose of statutory provisions i.e. Sections 151A & 144B of the Act of 1961.

“It is only the FAO which can issue the notice under Section 148 of the Act and not the JAO. Accepting an argument against the above position of law would render Clause 3(b) of the Scheme otiose and to be ignored or contravened; and, implicitly would thereby make the whole Scheme otiose.” added the bench.

In view of the above, the bench allowed this petition.

Case Title: Sharda Devi Chhajer v. Union of India and others

Citation: 2025 LiveLaw (Raj) 123

Case Number: D.B. Civil Writ Petition No. 11787/2024

Counsel for Petitioner/ Assessee: Vikas Balia

Counsel for Respondent/ Department: K.K. Bissa

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