Issuance of notice under section 148 in faceless manner is mandatory: SLP filed by Income Tax Department dismissed by SC
The JAO-FAO controversy is ongoing, with a recent development being the dismissal of an SLP by a bench led by Justice J.B. Pardiwala. Recent one is – Hon’ble Supreme Court of India has held that issuance of notice under section 148 in faceless manner is mandatory.
The Hon’ble Supreme Court of India dismissed the Revenue’s SLP (Diary No. 33956/2025 – Deepanjan Roy v. ADIT (Int Taxation), WP No. 23573/2024, Telangana HC) on 16.07.2025, thereby upholding the Hon’ble High Court’s interpretation of Section 151A and the binding nature of the faceless scheme for issuance of notices under Section 148 in Sri Venkataramana Reddy Patloola V. Deputy Commissioner of Income Tax, Circle 1(1), Hyderabad and Others (Writ Petition Nos.13353, 16141 AND 16877 OF 2024)
Earlier Hon’ble High Court for the State of Telangana at Hyderabad in Sri Venkataramana Reddy Patloola v. DCIT, Circle 1(1), Hyderabad & Others (Writ Petition Nos.: 13353, 16141 & 16877 of 2024 – Date of Judgment: 24.07.2024) has held that issuance of notice under Section 148 of the Income-tax Act, 1961 must mandatorily follow the faceless and automated procedure as laid out under the e-Assessment of Income Escaping Assessment Scheme, 2022, notified under Section 151A.
It was specifically ruled that international taxation cases are not exempt from this requirement for issuance of notice, and CBDT’s exemption under Section 144B relates only to final assessment orders—not to the issuance of notice.
Accordingly, the impugned Section 148 notices and consequential assessment orders were quashed, with liberty to the Revenue to initiate fresh proceedings strictly in accordance with law.The Supreme Court of India has upheld the Telangana High Court’s ruling that notices under Section 148 of the Income-tax Act, 1961, must be issued in a faceless manner as per the e-Assessment of Income Escaping Assessment Scheme, 2022, notified under Section 151A. This ruling applies to all cases, including international taxation cases. The CBDT’s exemption under Section 144B only applies to final assessment orders, not to the issuance of notices. As a result, the impugned notices and assessment orders were quashed, allowing the Revenue to initiate fresh proceedings in accordance with the law.
However, this dismissal was not a speaking order, meaning it didn’t provide detailed reasoning. The controversy is expected to be resolved when a batch of 700 cases pending before Justice B.V. Nagarathna’s bench is finally heard and judged. These cases, including the Suryalakshmi Cotton Mills/Hexaware batch, are crucial in determining the outcome of the JAO-FAO controversy. Until then, the issue remains unresolved.
The copy of the order is as under:
