Case Note & Summary
The petitioner, Abhin Anilkumar Shah, challenged a notice dated 31 March 2021 issued under Section 148A(b), an order dated 19 April 2024 under Section 148A(d), and a notice dated 19 April 2024 under Section 148 of the Income Tax Act, 1961, by the Jurisdictional Assessing Officer (JAO) of the International Tax Ward, Mumbai. The primary contention was that these actions violated the faceless assessment scheme under Section 151A read with Section 144B, as notified by the Central Government on 29 March 2022. The petitioner relied on the co-ordinate Bench decision in Hexaware Technologies Ltd., which held that the JAO lacks jurisdiction to issue notices under Section 148 outside the faceless mechanism. The revenue argued that international tax cases were excluded from the faceless scheme based on a CBDT order dated 6 September 2021 under Section 119. However, the court, after hearing the parties and amicus curiae, reaffirmed its earlier observations in CapitalG LP, holding that the CBDT order under Section 144B(2) does not override the mandatory scheme under Section 151A. The court found that the JAO's actions were without jurisdiction and quashed the impugned notices and order. The court emphasized that violation of statutory procedure itself causes prejudice, and the assessee need not prove further prejudice. The petition was allowed, and the rule was made absolute.
Headnote
A) Income Tax - Reassessment - Faceless Assessment Scheme - Sections 148, 148A, 151A, 144B of the Income Tax Act, 1961 - The court considered whether the Jurisdictional Assessing Officer (JAO) could issue notice under Section 148 outside the faceless mechanism. Following Hexaware Technologies Ltd., the court held that the scheme under Section 151A is mandatory and the JAO lacks jurisdiction to issue such notice. The court also rejected the revenue's argument that international tax cases are excluded, noting that the CBDT order under Section 144B(2) does not override Section 151A. (Paras 3-7, 10-11) B) Income Tax - Prejudice - Violation of Statutory Procedure - Sections 148, 151A of the Income Tax Act, 1961 - The court held that when an authority acts contrary to law, the assessee need not prove further prejudice; the violation itself causes prejudice. (Para 3, quoting Hexaware) C) Income Tax - Jurisdiction - Concurrent Jurisdiction - Sections 148, 151A of the Income Tax Act, 1961 - The court held that there is no concurrent jurisdiction between the JAO and the Faceless Assessing Officer (FAO) for issuance of notice under Section 148; the scheme provides for exclusive jurisdiction through automated allocation. (Para 3, quoting Hexaware)
Issue of Consideration
Whether the Jurisdictional Assessing Officer can issue notice under Section 148 of the Income Tax Act, 1961 outside the faceless mechanism under Section 151A read with Section 144B, particularly in cases involving international taxation.
Final Decision
The court allowed the petition, quashing the notice dated 31 March 2021 under Section 148A(b), the order dated 19 April 2024 under Section 148A(d), and the notice dated 19 April 2024 under Section 148. Rule made absolute.
Law Points
- Faceless assessment scheme under Section 151A is mandatory
- Jurisdictional Assessing Officer cannot issue notice under Section 148 outside faceless mechanism
- No concurrent jurisdiction between JAO and FAO
- Prejudice presumed from violation of statutory procedure
