ITAT Chandigarh Quashed Reassessment Due to JAO Issuing Notice Post-Faceless Mandate
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Biru Sharma Vs ITO (ITAT Chandigarh)
The appeal before the Income Tax Appellate Tribunal, Chandigarh Bench arose from an order of the Commissioner of Income Tax (Appeals) dated 28.02.2025 for Assessment Year 2017–18. At the outset, the assessee challenged the sustainability of the reassessment proceedings on jurisdictional grounds. It was submitted that the notice under Section 148 of the Income Tax Act, 1961 had been issued on 30.03.2022 by the jurisdictional Assessing Officer, whereas, in terms of the notification issued by the Ministry of Finance dated 29.03.2022, such notice was required to be issued only through the faceless assessment mechanism. On this basis, it was argued that the reassessment order was invalid. Reliance was placed on an earlier decision of the Tribunal rendered on 13.05.2025 in a similar matter.
The Departmental Representative was unable to controvert the submissions advanced on behalf of the assessee. The Tribunal noted that an identical issue had already been examined and decided by the same Bench in ITA No.1040/CHD/2024 with Cross Objection No.41/CHD/2024 dated 13.05.2025. In that case, the Tribunal had considered reassessment notices issued after the Ministry of Finance notification dated 29.03.2022 and had followed binding judgments of the jurisdictional High Court. The High Court had held that, after the said notification, notices under Section 148 could be issued only through faceless assessment and that notices issued by jurisdictional Assessing Officers were without authority. Such notices were therefore quashed, with liberty to the authorities to proceed in accordance with law.
The Tribunal reproduced the relevant portion of the High Court judgment, which had accepted that the issue was covered by earlier decisions of coordinate Benches of the same High Court. The High Court had observed that the Department itself did not dispute that the matter was governed by those precedents and, accordingly, had quashed the impugned notices on the ground of lack of jurisdiction. Following those judgments, the Tribunal in the earlier case had held that the notice issued under Section 148 was bad in law and that the reassessment order could not be sustained.
Applying the same reasoning to the present appeal, the Tribunal observed that the notice under Section 148A(1) had been issued on 30.03.2022, as recorded in the assessment order itself, after the faceless assessment notification had come into force. Respectfully following the judgments of the jurisdictional High Court and the earlier order of the Tribunal on the identical issue, the Tribunal held that the reassessment notice was without jurisdiction. Consequently, the reassessment order passed pursuant to such notice was quashed.
Accordingly, the plea raised by the assessee was accepted, the reassessment order was set aside, and the appeal was allowed in full. The order was pronounced on 21.01.2026.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
The assessee is in appeal before the Tribunal against the order passed by the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 28.02.2025 passed for assessment year 2017-18.
2. At the very outset, the ld. counsel for the assessee submitted that since notice u/s 148 of the Income Tax Act, 1961 was issued on 30.03.2022 by jurisdictional AO instead of Faceless AO, as contemplated in the Notification issued by the Finance Ministry dated 29.03.2022, thus, according to him, the impugned assessment order is not sustainable. In support of his contention, he relied upon order of the ITAT in the case of ‘Shri Bagga Singh Vs DCIT Intl. Taxation (ITA No.231/CHD/2024) dated 13.05.2025.
3. The ld. Ld. CIT DR was unable to controvert this submission of the ld. counsel for the assessee.
4. I find that an identical issue was decided by this Bench in ITA No.1040/CHD/2024 with C.O. No.41/CHD/2024 dated 13.05.2025. The finding of the Tribunal reads as under:
“6. We have duly considered the rival contentions and gone through the record carefully. Admittedly, notice under Section 148 was issued after the Notification issued by the Ministry of Finance, Government of India on 29.03.2022. The notice under Section 148 has been issued on 29.03.2023 i.e. almost one year from the Notification. Thus, facts of other year are squarely applicable. The issue in dispute is covered by the judgement of Hon’ble jurisdictional High Court which read as under :
“DEEPAK SIBAL, J. (Oral)
1. Challenge made through the instant petition is to the notice dated 01.03.2025 (Annexure P-l) issued to the petitioner by the respondents tinder Section 148 of the Income Tax Act, 1961. The primary ground of challenge raised by the petitioner is that the impugned notice has been issued by the Jurisdictional Assessing Officer which could not have been done because in terms of the notification dated 29.03.2022 (Annexure P-2), issued by the Ministry of Finance. Government of India, the impugned notice could have been issued only by way of faceless assessment.
2. In support of his afore submission, learned counsel for the petitioner places reliance on the following two judgments of this Court:-
i. CWP-15745-2024, titled Jatinder Singh Bhangu Vs. Union of India and others, decided on 07.2024; and
ii. CWP-21509-2023, titled Jasjit Singh Union of India and others, decided on 29.07.2024.
3. Learned counsel for the respondents does not dispute the fact that the case of the petitioner is covered in his favour by the law laid down through the aforesaid two judgments rendered by two different co-ordinate Benches of this Court in Jatinder Singh Bhangu and Jasjit Singh’s case (supra).
4. In the light of the above, in terms of the law laid down in Jatinder Singh Bhangu‘s and Jasjit Singh‘s cases (supra) the impugned notice dated 01.03.2025 (Annexure P-1) issued by the Jurisdictional Assessing Officer, is hereby quashed with liberty to the respondents to proceed against the petitioner in accordance with law.
5. The petition is allowed in the above terms.
[DEEPAK SIBAL]
JUDGE
[ LAPITA BANERJI]
JUDGE
30.04.2025
7. Respectfully following the judgement of the Hon’ble High Court, we allow the ground of appeal of Cross Objection and hold that notice issued under Section 148 of the Income Tax Act in assessment year 2019-20 is bad in the eyes of law. It was without jurisdiction. Accordingly, re-assessment order is quashed.”
5. Apart from this order, there are large number of judgements at the end of the Jurisdictional High Court on this issue.
6. Respectfully following the judgement, I quash the reassessment order because notice u/s 148A(1) was issued on 30.03.2022 as observed by the AO in the assessment order. Accordingly, this plea of the assessee is allowed and re-assessment order is quashed. The appeal of the assessee is allowed.
7. In the result, appeal of the assessee is allowed.
Order pronounced on 21.01.2026.
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