The Himachal Pradesh High Court, stayed an Income Tax notice issued under Section 148 of the Income Tax Act, 1961, on the grounds of lack of jurisdiction by the Jurisdictional Officer.
In this case, the notice was issued by a local Jurisdictional Officer, which did not comply with the mandatory faceless procedure.
The High Court observed that similar rulings by other High Courts, including the Telangana and Bombay High Courts, emphasised that reassessment notices must be issued through a faceless system under the Scheme, with random allocation of cases, rather than by individual officers not allocated by the system.
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Relevant Portions of the decision were reproduced by the High Court, which stated that, “After the introduction of the above two schemes, it becomes mandatory for the Revenue to conduct/initiate proceedings pertaining to reassessment under Section 147, 148 & 148A of the Act in a faceless manner. Proceedings under Section 147 and Section 148 of the Act would now have to be taken as per the procedure legislated by the Parliament in respect of reopening/re-assessment i.e., proceedings under Section 148A of the Act.”
The Himachal Pradesh High Court Bench of Chief Justice M S Ramachandra Rao and Justice Satyen Vaidya observed that as per Section 151A of the Income Tax Act, introduced on November 1, 2020, and the notification issued on March 28, 2022, the reassessment process under Section 148 must adhere to the faceless regime with automated case allocation as per the Central Board of Direct Taxes’ risk management strategy.
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The Himachal Pradesh High Court thus issued an interim stay on further proceedings related to the notice, citing that it was issued without jurisdiction, in violation of Section 151A and the related Scheme.
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