The Bombay High Court held that reassessment notice under Section 148 of the Income Act and it is only the Faceless Assessing Officer (FAO) which can issue the notice under Section 148 of the Act and not the Jurisdictional Assessing Officer (JAO).
Section 151A of the Income Tax Act itself contemplates formulation of Scheme for both assessment, reassessment or recomputation under Section 147 as well as for issuance of notice under Section 148 of the Act. Therefore, the Scheme framed by the CBDT, which covers both the aforesaid aspect of the provisions of Section 151A of the Act cannot be said to be applicable only for one aspect, i.e., proceedings post the issue of notice under Section 148 of the Income Tax Act being assessment, reassessment or recomputation under Section 147 and inapplicable to the issuance of notice under Section 148 of the Income Tax Act. The Scheme is clearly applicable for issuance of notice under Section 148 of the Act and accordingly, it is only the FAO which can issue the notice under Section 148 of the Income Tax Act and not the JAO.
The court ruled that the scope of the Scheme would exclude the applicability of Section 148A and if steps are taken by the JAO under Section 148A culminating into issuance of a notice under Section 148 of the Income Tax Act, the entire exercise being undertaken outside the faceless mechanism would be required to be quashed and set aside.
Facts
The Writ Petition was filed to challenge a notice issued to the Petitioner under Section 148 of the Income Tax Act, 1961, and also the underlying prior notice and order under Section 148A(b) and Section 148A(d), respectively. The notice under Section 148 of the Act has been issued to the Petitioner in respect of returns filed by the Petitioner-Assessee for the Assessment Year 2017-18.
The notice and the order were issued by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO), as required by the provisions of Section 151A of the Income Tax Act.
Conclusion
The court disposed of the writ petition on the ground of non-compliance with Section 151A and held that a procedure inextricably linked to Section 148 which would apply to all cases of reassessment with a proviso stipulating exceptions to the rule. In other words, Section 148A in its object, intent and purpose is inextricably connected with the assessment, re-assessment or re-computation, for which a notice under Section 148 may be issued. Any other view would mean that the requirement to adopt the faceless procedure under the Scheme.
Case Details
Case Title: Kairos Properties Private Limited V/S Assistant Commissioner of Income-tax
Citation: WRIT PETITION (LODG.) NO. 22686 OF 2024
Judges: Justice G. S. Kulkarni & Justice Somasekhar Sundaresan
Court: Bombay High Court
Date of Order / Judgment: 05/08/2024
