S. 151A Makes Faceless Assessment Applicable from SCN Stage u/s S. 148 & S. 148A: P&H HC Affirms NFAC’s Exclusive Authority [Read Order]

The Court reiterated that once the Central Board of Direct Taxes (CBDT) notified the National Faceless Assessment Centre (NFAC) as the exclusive authority for issuing notices under Section 148.

The petitioner, Lakhvinder Singh Gill, had challenged a notice issued under Section 148 dated 9 April 2024 and the consequential proceedings for Assessment Year 2017-18, contending that the issuance of such notice by the jurisdictional Income Tax Officer was illegal.

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He relied on the CBDT’s notification dated 29 March 2022, which clearly provides that reassessment proceedings must be conducted through the NFAC as part of the faceless assessment regime mentioned under Section 151A.

The Revenue did not dispute the legal position, and the Division Bench, comprising Justice Lisa Gill and Justice Meenakshi I. Mehta, noted that the issue was squarely covered by its earlier decisions in Jatinder Singh Bhangu v. Union of India and Jasjit Singh v. Union of India.

In those cases, the Court had held that faceless assessment must start from the stage of the show cause notice itself under Section 148 or 148A. The Bench also reiterated that statutory provisions under Section 151A and the related notifications cannot be diluted by contrary instructions or office memoranda issued by departmental authorities.

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The court in the case of Jatinder Singh Bhangu observed that “The respondents are heavily placing reliance upon office memorandum and letter issued by departmental authorities. It is axiomatic in tax jurisprudence that circulars, instructions and letters issued by Board or any other authority cannot override statutory provisions. The circulars are binding upon authorities and Courts are not bound by circulars. The mandate of Section 144B, 151A read with notification dated 29.03.2022 issued thereunder is quite lucid. There is no ambiguity in the language of statutory provisions, thus, office memorandum or any other instruction issued by Board or any other authority cannot be relied upon.”

Accordingly, the writ petition was disposed of in terms of the binding ratio laid down in the Bhangu and Jasjit Singh cases.

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