Albert Sheela Vs ITO (ITAT Chennai)
Reopening Crashes on Faceless Rock: ITAT Chennai Quashes 148 Notice Issued by JAO Post 29-03-2022
Chennai ITAT ‘B’ Bench in Albert Sheela vs ITO, Ward-1, Vellore (ITA No.2831/Chny/2025, AY 2015-16, order dated 23-12-2025) held that reassessment proceedings initiated u/s 148 on 31-03-2022 by the Jurisdictional AO (JAO) are invalid and bad in law, having been issued after CBDT Notification dated 29-03-2022 introducing the e-Assessment of Income Escaping Assessment Scheme, 2022.
Assessee had not filed ROI originally; reassessment was triggered based on information regarding contract receipts of ₹21,600 & sale of immovable property for ₹72.50 lakh. AO completed assessment u/s 147 making capital-gains addition of ₹34.17 lakh (after allowing deduction u/s 54) along with contract receipts. CIT(A), NFAC confirmed the additions.
Before ITAT, Assessee raised a pure jurisdictional challenge, contending that post-29-03-2022, all notices u/s 148 & orders u/s 148A(d) must emanate only through Faceless Assessment Officer (FAO) in terms of section 151A read with the Faceless Scheme, & issuance by JAO vitiates the entire proceedings.
Tribunal accepted the plea, noting that both order u/s 148A(d) & notice u/s 148 were issued by ITO, Ward-1, Vellore, contrary to the mandatory faceless mechanism. ITAT relied heavily on Hexaware Technologies Ltd (Bom HC), Kankanala Ravindra Reddy (Telangana HC), TVS Credit Services Ltd (Madras HC – DB) & also took note of dismissal of Revenue SLP in Deepanjan Roy by Supreme Court, though clarifying doctrine of merger principles.
ITAT categorically held that non-following of faceless procedure goes to the root of jurisdiction, rendering reopening proceedings null in the eyes of law, and therefore quashed notice u/s 148 and all consequential orders, without examining merits of additions. Liberty was kept open for Revenue to revive proceedings if Apex Court reverses Hexaware.
For notices issued on or after 29-03-2022, JAO-issued 148 notices are fatal, irrespective of merits, reaffirming faceless reassessment as a jurisdictional mandate, not a procedural formality.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
