Kings Pride Infra Projects Pvt. Ltd. Vs DCIT (Telangana High Court)
Summary: The Telangana High Court, in Kings Pride Infra Projects Pvt. Ltd. Vs DCIT, considered a batch of writ petitions challenging notices issued under Section 148 of the Income Tax Act, 1961 (“the Act”). The petitioners primarily contended that the notices were invalid because they were issued by the Jurisdictional Assessing Officer (JAO) rather than through the faceless procedure mandated under the Finance Act, 2021 and Section 151A of the Act, as amended effective April 1, 2021. The petitions concerned cases assigned to “central charges,” and the core legal question was whether reassessment notices under Section 148 in such cases could be issued by a JAO or must be issued in a faceless manner.
The petitioners relied on prior rulings, notably Kankanala Ravindra Reddy vs. ITO and Sri Venkataramana Reddy Patloola vs. DCIT, where the Telangana High Court held that post-April 1, 2021, all notices under Section 148 must follow the faceless procedure. They also cited similar rulings by the Bombay High Court in Hexaware Technologies Ltd. vs. ACIT. The petitioners argued that the procedure adopted by the Revenue in issuing notices by the JAO contravened these principles.
The Income Tax Department, represented by the Additional Solicitor General, argued that the cases were exceptions because they arose from search and seizure proceedings under Section 132 of the Act. The Department contended that faceless procedures are designed for regular assessment proceedings and are not suitable for search and seizure cases. They maintained that issuing notices through the JAO was necessary to comply with Section 153D of the Act, which requires a JAO to evaluate material collected during searches and to secure prior approval for assessments. The Department also cited the Gujarat High Court in Talati and Talati LLP and the Delhi High Court in K.S. Builders Pvt. Ltd., which had upheld JAO-issued notices in search cases.
