Talati And Talati LLP Vs ACIT (Gujarat High Court)
The Gujarat High Court considered the challenge to the issuance of a notice under Section 148 of the Income Tax Act, 1961, dated 22 March 2024, for Assessment Year (AY) 2021-22, filed by Talati and Talati LLP, a Limited Liability Partnership engaged in professional services, including chartered accountancy. The LLP had filed its original return under Section 139 on 14 March 2022 and further return on 30 May 2024 in response to the notice under Section 148. The petitioner contended that the notice was legally invalid, alleging that the Jurisdictional Assessing Officer (JAO) had issued the notice in physical mode in violation of Section 151A, inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, which mandates faceless assessments via automated allocation under the “E-Assessment of Income Escaping Assessment Scheme, 2022” notified on 29 March 2022.
The petitioner argued that Section 151A requires mandatory issuance of Section 148 notices through automated allocation to ensure efficiency, transparency, and accountability, leaving no discretion for physical issuance by the JAO. Further, the petitioner claimed that the notice lacked the necessary reasons or satisfaction note, as required under Section 151, and did not specify any escapement of income, rendering it procedurally flawed. The writ petition emphasized that the notice failed to comply with the statutory scheme and that the JAO acted beyond the permissible procedure, citing reliance on a Division Bench decision of the Bombay High Court in Hexaware Technologies Ltd. v. ACIT (2024), which held that notices under Section 148 must strictly follow the faceless assessment scheme unless expressly exempted.
