Notice U/s 148 has to be issued through automated allocation. If issued by JAO, it is invalid
The decision rendered by the Hon’ble Bombay High Court in the case of Hexaware Technologies Limited v. ACIT (WP No. 1778 of 2023 dt. 3rd May, 2024 for AY. 2015-16) sheds light on a crucial aspect regarding the jurisdictional issue of notices under Section 148 of the Income Tax Act.
Here’s a breakdown of the key points from the court’s observations and ruling:
Invalidity of Notice by Jurisdictional Assessing Officer (JAO): The court held that the notice issued by the JAO instead of the Faceless Assessing Officer (FAO) is invalid and against the provisions of Section 151A of the Act.
E-Assessment Scheme, 2022: The court analyzed the e-Assessment of Income Escaping Assessment Scheme, 2022, which mandates automated allocation and faceless proceedings. The Scheme, framed under Section 151A, provides for random allocation of cases to Assessing Officers and emphasizes faceless assessment and issuance of notices under Section 148.
Jurisdictional Issue: The court clarified that the Scheme is clear on the issuance of notices through automated allocation and in a faceless manner. It emphasized that the Scheme is mandatory and requires compliance from all Assessing Officers.
Contradictory Arguments by Revenue: The court scrutinized the arguments presented by the Revenue, highlighting contradictions in their interpretation of the Scheme and Section 148. It emphasized that the Scheme’s provisions cannot be disregarded or modified arbitrarily by the Revenue.
Precedential Value of Other Court Decisions: The court addressed the relevance of other court decisions, such as the one from the Hon’ble Calcutta High Court, and emphasized that such decisions must consider the provisions of the Scheme and Section 151A.
Conclusion: Ultimately, the court ruled that the notice issued by the JAO was invalid and against the provisions of Section 151A and the e-Assessment Scheme, 2022.
This case serves as a significant precedent in clarifying the jurisdictional aspect of notices under Section 148 and underscores the importance of adhering to the provisions of the Income Tax Act and relevant schemes framed by the CBDT.
The copy of the circular is as under:
