Notice u/s 148 issued by JAO instead of FAO Invalidates Reassessment: ITAT Quashes Proceedings [Read Order]
The tribunal held that the failure to follow the mandatory faceless procedure made reassessment notices issued by a Jurisdictional Assessing Officer (JAO) invalid.
![Notice u/s 148 issued by JAO instead of FAO Invalidates Reassessment: ITAT Quashes Proceedings [Read Order]](https://images.taxscan.in/h-upload/2025/12/30/2116007-notice-us-148-issued-jao-instead-fao-invalidates-reassessment-itat-quashes-proceedings-taxscan.webp "Notice u/s 148 issued by JAO instead of FAO Invalidates Reassessment: ITAT Quashes Proceedings [Read Order]")
The Chennai Bench of the Income Tax AppellateTribunal (ITAT) quashed a reassessment order and ruled that the issuance of a notice under Section 148 by the JAO, rather than the National FacelessAssessment Centre (NFAC), was invalid. CPT Elecy System Employees Coop T&C Society (assessee) filed an appeal against the order of the Commissioner of Income Tax (Appeals) for Assessment...
The Chennai Bench of the Income Tax AppellateTribunal (ITAT) quashed a reassessment order and ruled that the issuance of a notice under Section 148 by the JAO, rather than the National FacelessAssessment Centre (NFAC), was invalid.
CPT Elecy System Employees Coop T&C Society (assessee) filed an appeal against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2020-21. The primary challenge was directed at the jurisdiction of the Income Tax Officer, Ward 1 Kancheepuram (JAO), who issued a notice under Section 148 on March 30, 2024.
The assessee argued that as of March 29, 2022, the Central Board of Direct Taxes (CBDT) had notified a scheme requiring such notices to be issued in a faceless manner through automated allocation.
The assessee contended that the CBDT Notification dated March 29, 2022, made it mandatory for Section 148 notices to be issued by the NFAC in a faceless manner. Since the notice in this case was issued by the JAO in 2024, it was in direct violation of the statutory scheme.
The two-member bench comprising Manu Kumar Giri (Judicial Member) and S.R. Raghunatha (Accountant Member) observed that the 2022 Scheme covers assessment, reassessment, and the issuance of notices under Section 148 of the Income Tax Act.
The tribunal noted that the impugned notice was issued on March 30, 2024, well after the 2022 Scheme came into effect. It relied on the Madras High Court, in the case of TVS Credit Services Ltd., which followed the landmark Hexaware Technologies judgment, affirming that faceless issuance was mandatory.
The bench concluded that since notices under Section 148 of the Act were not issued in a faceless manner, the entire further proceedings proceeded with assessment orders were unsustainable.
Following the jurisdictional High Court's precedent, the tribunal set aside the Section 148 notice and all consequential assessment orders. The tribunal allowed the assessee's appeal but reserved liberty for the Revenue to revive the matter should the Supreme Court eventually rule in favor of the Department in pending litigation. The appeal of the assessee was allowed.
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