JAO Not Empowered To Issue Section 148A(b) Notice Under Faceless Assessment: Bombay High Court

The Bombay High Court has held that it was not permissible for the Jurisdictional Assessing Officer (JAO) to issue a notice under Section 148A(b), as the same would amount to a breach of the provisions of Section 151A of the Income Tax Act.

The bench of Justice G. S. Kulkarni and Justice Somasekhar Sundaresan has observed that the notice was invalid and bad in law being issued by the JAO as the same was not in accordance with Section 151A of the Income Tax Act.

The petitioner/assessee has challenged the action as taken by the respondent department in respect of the re-opening of the petitioner's assessment by resorting to the procedure under Section 148A(a) and (d) of the Income Tax Act, 1961, culminating in a final notice being issued under Section 148 being quashed and set aside. The assessment year in question was 2019–20.

The assessee contended that the notice as issued by the JAO is in the teeth of the provisions of Section 151A of the Income Tax Act, 1961, as the scheme for faceless assessment as notified by the Central Government by notification dated March 29, 2022, as made applicable for taking an action under the provisions, has not been followed. The JAO had no authority to issue notice as the same was outside the mandatory faceless assessment provisions, which were implemented by the Central Government in introducing the faceless assessment scheme.

Section 151A relates to the faceless assessment of income escaping assessment. It states that the Central Government may make a scheme, by notification in the Official Gazette, for the purposes of assessment, reassessment, or recomputation under Section 147, issuance of notice under Section 148, or sanction for the issue of such notice under Section 151, so as to impart greater efficiency, transparency, and accountability by eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible.

The court, while allowing the petition, held that there is no question of concurrent jurisdiction between the FAO and the JAO with respect to the issuance of notice under Section 148 of the Act. The scheme clearly provides that the issuance of notice “shall be through automated allocation,” which means that the same is mandatory and is required to be followed by the department and does not give any discretion to the department to choose whether to follow it or not.

Counsel For Petitioner: Rahul Sarda

Counsel For Respondent: Mamta Omle

Case Title: Venus Jewel Versus ACIT

Case No.: Writ Petition No. 3711 Of 2023

Click Here To Read The Order