Manoranjani Vs ITO (ITAT Chennai)
Faceless Reassessment Is Mandatory: Chennai ITAT Sets Aside 69A Addition Despite Cash Deposits
Chennai ITAT ‘B’ Bench in Manoranjani vs ITO, Non-Corp Ward-8(1), Chennai (ITA No.2920/Chny/2025, AY 2017-18, order dated 23-12-2025) held that reassessment proceedings initiated by the Jurisdictional Assessing Officer (JAO) after 29-03-2022 are void ab initio, being in violation of the mandatory faceless reassessment scheme u/s 151A read with CBDT Notification dated 29-03-2022.
Assessee, an individual running a petrol bunk, had filed ROI declaring income of ₹6.31 lakh. Based on information relating to cash deposits of ₹93.44 lakh during demonetisation, assessment was reopened and notice u/s 148 dated 28-07-2022 along with order u/s 148A(d) were issued by ITO, Non-Corp Ward-8(1), Chennai. Assessment was completed u/s 147 r.w.s. 144B making addition of ₹10.50 lakh u/s 69A towards unexplained cash deposits. CIT(A), NFAC confirmed the addition.
Before ITAT, Assessee raised a pure legal ground on jurisdiction, contending that after 29-03-2022, all notices u/s 148 and orders u/s 148A must necessarily be issued only through the Faceless Assessment Officer (FAO) and not by the JAO. Any deviation, it was argued, strikes at the root of jurisdiction and vitiates the entire proceedings.
ITAT accepted the contention, holding that though merits related to demonetisation cash deposits were examined by AO, the very foundation of reopening was illegal, as notice u/s 148 dated 28-07-2022 was admittedly issued by JAO, contrary to section 151A and the faceless scheme. Tribunal followed Hexaware Technologies Ltd (Bom HC), Kankanala Ravindra Reddy (Telangana HC) and the jurisdictional Madras HC Division Bench ruling in TVS Credit Services Ltd, also noting dismissal of Revenue SLP in Deepanjan Roy, while clarifying doctrine of merger principles.
Accordingly, ITAT quashed notice u/s 148 and all consequential reassessment orders, without going into merits of the addition u/s 69A, while keeping liberty open to Revenue to revive proceedings if the Apex Court takes a contrary view in Hexaware.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
