A Comma That Changed the Law: Gujarat HC’s Sharp Turn in the JAO–FAO Controversy
Just when we thought the debate on Jurisdictional Assessing Officer (JAO) vs. Faceless Assessing Officer (FAO) was leaning one way, the Hon’ble Gujarat High Court has delivered a significant judgment that changes the landscape.
In the recent case of Snehdham Trust vs. ACIT, the Gujarat High Court has upheld the validity of Section 148 notices issued by JAOs after April 1, 2022.
Here is the breakdown of this divergent view:
1. The Core Dispute:
The central issue was whether notices issued by JAOs were invalid because the “E-Assessment of Income Escaping Assessment Scheme, 2022” allegedly mandated such notices be issued only by FAOs. Petitioners relied heavily on the Bombay HC’s Hexaware ruling, arguing that the JAO lacked jurisdiction.
2. The “Comma” that Changed the Interpretation
The Gujarat HC took a fascinating grammatical approach to the Scheme, 2022. They analyzed Paragraph 3, noting it is divided by commas:
– Clause (a) mandates “faceless manner” for assessments.
– Clause (b) mandates “automated allocation” for notice issuance.
The Court ruled that the “faceless manner” requirement is separated by a comma and applies only to the assessment stage (Section 144B), not the notice issuance stage.
3. The Logic on Section 148A:
The Court observed that Section 148A (inquiry/order) is not part of the 2022 Scheme. Since the JAO passes the 148A(d) order, it would be an “absurdity” or “empty formality” to require a Faceless Officer to issue the consequent Section 148 notice.
4. The Verdict
The Court explicitly disagreed with the Bombay and Telangana High Courts. It held that notices issued by JAOs after 01.04.2022 are valid and legal.
This judgment creates a clear split in judicial opinion. While assessees in Maharashtra and Telangana have relief, those in Gujarat face a different reality. All eyes are now on the Supreme Court to settle this interpretive battle.
The copy of the order is as under:
