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2025 Supreme(Online)(ITAT) 21324
INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH)
M. Balaganesh, Accountant Member, Vimal Kumar, Judicial Member
Chirag Kirpal – Appellant
Versus
ACIT – Respondent
ITA No. 656/Del/2025
Important Points
Subject
Taxation Law - Income Tax - Reassessment
Act Referred
Headnote
Facts of the case:
The assessee, an individual, was issued a notice under Section 148 of the Act by the Jurisdictional Assessing Officer regarding an undisclosed transaction involving the purchase of property. Subsequently, a reassessment order was passed, resulting in an addition to the income. The assessee contested the validity of the jurisdictional assumption, arguing that the notice should have been issued under the faceless assessment regime as mandated by the relevant statutes and notifications.
Findings of Court:
The court held that Section 151A read with Section 144B and the notification dated 29.03.2022 mandates that reassessment notices must be issued in a faceless manner. The issuance of such notice by the Jurisdictional Assessing Officer is contrary to the statutory framework and renders the entire proceeding invalid. Internal office memoranda or instructions cannot supersede mandatory legislative provisions.
Issues: Whether the issuance of a notice under Section 148 of the Act by the Jurisdictional Assessing Officer, instead of the Faceless Assessing Officer, is valid under the current faceless assessment regime.
Ratio Decidendi: The court concluded that the faceless regime aims to eliminate person-to-person interface. Since Section 151A and the 2022 Scheme designate the faceless authority as the sole body for issuing reassessment notices, the Jurisdictional Assessing Officer lacks the legal competence to initiate such proceedings. This procedural breach is fundamental and vitiates the entire assessment.
Result: Appeal allowed; reassessment proceedings quashed.
For the Appellants/Petitioners: S. K. Gupta
For the Respondents: M. S. Nethrapal
| Table of Content |
|---|
| 1. procedural history and facts of assessment. (Para 1 , 3) |
| 2. jurisdictional notice issuance validly belongs to faceless assessing officer. (Para 2 , 4) |
| 3. precedential requirement to follow jurisdictional high court ruling. (Para 5 , 6 , 7 , 8) |
| 4. reassessment order quashed due to invalid notice issuance. (Para 9 , 10 , 11) |
O R D E R
PER M. BALAGANESH, A. M.:
1. The Assessee Chirag Kirpal (hereinafter referred to as ‗assessee) by filing the present appeal sought to set aside the impugned order dated 29.03.2023 passed by the Assessing Officer (AO) under section 148A of the Income Tax Act, 1961 (for short ‗the Act‘) inconsonance with the order passed by the Dispute Resolution Panel (DRP-1) dated 04.12.2024 u/s 144C(5).
2. The preliminary issue to be decided in this appeal is as to whether the assumption of jurisdiction by the Learned AO could be construed as valid when the notice under section 148 of the Act was issued by the Learned Jurisdictional Assessing Officer (JAO) in the facts and circumstances of the instant case.
3. We have heard the rival submissions and perused the materials available on record. The Assessee is a Non-Resident Indian and has not filed his return of income under section 139 of the Act for the assessment year 2016-17. Information in this case was flagged as per risk management strategy formulated by the CBDT. As per the information, the Assessee had purchased immovable property for Rs. 65 lakhs during the year under consideration. Since the said transaction is more than the maximum amount not chargeable to tax and Assessee being a non-filer of income tax return, notice under section 148 of the Act stood issued to the Assessee on 29-03-2023 by ITO (International Tax), Gurgoan. In response to the said notice, the Assessee filed his return of income on 14-04-2023 declaring total income of Rs 2,482/- and thereafter, notice under section 143(2) and 142(1) of the Act stood issued to the assessee. The reassessment ultimately stood completed under section by passing a draft assessment order under section 144C(1) of the Act on 17-03-2024 determining total income of the Assessee at Rs. 65,02,482/- after making an addition of Rs. 65 lakhs by disbelieving the gift received by the Assessee from his father in the sum of Rs. 65 lakhs. The Assessee filed objections before the Learned DRP. The Learned DRP gave directions under section 144C(5) of the Act on 4-12-2024 confirming the action of the Learned AO. Accordingly, final assessment order stood passed by the DCIT (International Taxation), Gurgoan under section 147 read with section 144C(13) of the Act on 21-02-2025 determining total income of the Assessee at Rs. 65,02,482/-. Aggrieved, the Assessee is in appeal before us.
4. It is not in dispute that the notice under section 148 of the Act dated 29-3-2023 has been issued by ITO (International Taxn), Gurgoan to the assessee for the assessment year 2016-17 who is the Jurisdictional Assessing Officer (JAO). Now, the short point that arises for our consideration is under the faceless regime, whether the reassessment notice under section 148 of the Act which enables the assessing officer to assume jurisdiction could be issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer (FAO) and whether the non-issuance of the statutory notice by the FAO would vitiate the entire reassessment proceedings. The provisions of section 151 A of the Act mandates that the notice under section 148 of the Act could be issued by the faceless authority only and not by the Learned JAO. The plain reading of section 151 A read with section 144B of the Act makes it very clear in this regard. Hence, the Learned JAO was divested of any authority to issue the notice under section 148 of the Act. This was also endorsed by the CBDT vide Notification dated 29-3-2022. The assessee herein falls under the jurisdiction of Hon‘ble Punjab and Haryana High Court. The issuance of notice by the JAO instead of FAO was
