SCN issued by JAO instead of FAO, Prima Facie Income Tax Reopening Time-Barred: Calcutta HC Stays Reassessment [Read Order]

In a recent ruling, the Calcutta High Court stayed the reassessment proceedings for AY 2015-16, noting prima facie that the reopening appears time‑barred under Section 149 of the Income Tax Act. The petitioner further stated that the show cause notice was wrongly issued by the jurisdictional Assessing Officer (JAO) instead of the Faceless Assessment Unit (FAO).

The writ petition challenged the order dated December 30, 2024, passed under Section 148A(d) of the Income Tax Act, 1961, along with the consequential notice under Section 148.

The petitioner, Babylon Trading & Investment Pvt. Ltd argued that the mandatory approval for reopening under section 148 was never supplied, amounting to a jurisdictional defect. To support this, they relied on two orders of the Coordinate Bench of this Court, Parveen Jhawar v. Union of India & Ors. and Asif Ahmed v. Union of India & Ors.

Also pointed out that the reopening for AY 2015-2016 should have been initiated by March 31, 2022. Notices issued in November and December 2024 were well beyond the statutory limit, and the impugned order and notice were issued by the Jurisdictional Assessing Officer, whereas the law requires such proceedings to be handled by the Faceless Assessment Unit.

On the other hand, the respondent sought time to file a detailed affidavit contending that the petitioner’s objections were not sustainable.

After hearing both sides, the high court observed that there was nothing on record to show that the approval order under section 151 had been served on the petitioner, and the reassessment for AY 2015-16 appeared to be hit by limitation, since it was initiated after March 31, 2022.

The bench of Justice Om Narayan Rai ruled that the petitioner had made out an arguable case, and the Court ordered that the notice dated December 30, 2024, under Section 148 shall remain stayed until the disposal of the writ petition.

The High Court said the respondent was to file its affidavit-in-opposition within four weeks, with the petitioner’s reply to follow within two weeks. The matter will be listed for hearing after the exchange of affidavits.

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