The Bombay High Court, in the case of Abhin Anilkumar Shah vs. Income-tax Officer, International Tax Ward Circle 4(2)(1), Mumbai & Ors., quashed the notices and orders issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, as these were issued without adhering to the mandatory faceless mechanism outlined by the Central Government.

1. Background:

The petitioner, Abhin Anilkumar Shah, challenged the issuance of a notice dated 31 March 2021, and subsequent orders under Sections 148A(b) and 148A(d) of the Income Tax Act. The contention was that the notices were issued outside the faceless mechanism mandated by the Central Government’s notification dated 29 March 2022, which outlines the "E-Assessment of Income Escaping Assessment Scheme 2022."

2. Legal Framework:

The petition focused on the mandatory faceless mechanism under Section 151A of the Income Tax Act, which requires that all actions under Sections 148A and 148 must be conducted through an automated, faceless procedure. The Court referred to its previous judgments in Hexaware Technologies Ltd. vs. Assistant Commissioner of Income Tax and CapitalG LP vs. Assistant Commissioner of Income Tax to reinforce that the jurisdiction to issue notices under Section 148 lies exclusively with the Faceless Assessment Officer (FAO) and not the JAO.

3. Court's Analysis:

The Court rejected the Revenue's argument that international taxation cases are exempt from the faceless mechanism. The Bench emphasized that the faceless mechanism is mandatory and applicable to all assessments under Section 148, including those related to international taxation. The Court clarified that the notifications from 31 March 2021 and 6 September 2021, cited by the Revenue, pertain only to assessment orders and not to the issuance of notices under Sections 148A and 148.

4. Conclusion:

The Court ruled in favor of the petitioner, quashing the impugned notices and orders as being illegal and without jurisdiction. The decision reaffirms the mandatory nature of the faceless assessment scheme and invalidates any contrary actions by the tax authorities.

5. Implications:

This judgment underscores the importance of adhering to the procedural mandates of faceless assessments, ensuring transparency, efficiency, and legal compliance in the assessment process. The decision also sets a precedent for other similar cases involving the applicability of the faceless mechanism in tax assessments.