Reassessment Notice Not Issued In Terms Of Procedure Prescribed Under Faceless Assessment; Karnataka High Court Grants Interim Stay

The Karnataka High Court has granted an interim stay on a reassessment notice issued under Section 148 of the Income Tax Act, 1961 which was not issued in terms of the procedure prescribed under Faceless Assessment.

The bench of Justice Sunil Dutt Yadav has stayed the reassessment notice issued by the jurisdictional assessing officer under Section 148 of the Income Tax Act, 1961 since the notice could not have been issued by the jurisdictional assessing officer but ought to have been issued in terms of the procedure prescribed under Faceless Assessment.

The petitioner/assessee is an individual who is running his proprietorship firm by the name of Shrinivasa Traders. The petitioner was issued the notice under Section 148 of the Income Tax Act, 1961, by the jurisdictional assessing officer.

The petitioner challenged the notice issued by the jurisdictional assessing officer under Section 148 of the Income Tax Act, 1961.

The petitioner contended that since the introduction of the E-assessment of Income Escaping Assessment Scheme, 2022, under Section 151A of the Income Tax Act, 1961, the proceedings pertaining to Section 148 of the Income Tax Act, 1961, can only be conducted in a faceless manner by the National Faceless Assessment Centre, and the jurisdiction officer shall not have authority to proceed in that regard.

Section 148 of the Income Tax Act gives the Assessing Officer the power to reassess tax returns if income is inaccurately reported. A notice is sent under Section 148 or 148A for reassessment. The taxpayer has the right to explain before reassessment. The procedure under Section 148A must be strictly followed.

Section 151A of the Income Tax Act grants powers to the Central Government to make a scheme for assessment, reassessment, or re-computation under Section 147 of the Income Tax Act, issue notice under Section 148 of the Income Tax Act, or sanction the issue of such notice under Section 151 of the Income Tax Act.

The court granted the interim stay on the reassessment notice issued by the jurisdictional assessing officer.

Counsel For Petitioner: Sameer Gupta

Counsel For Respondent: Swatipanduranga

Case Title: Suresh Chatrabhoj Bhanushali Versus UOI

Case No.: Writ Petition No. 13664/2024

Click Here To Read The Order