Smt. Gnanamani Thuraichi Vs ITO (ITAT Chennai)
Reassessment Notice Issued by Jurisdictional AO Invalid Post 29.03.2022: ITAT Chennai Quashes Section 148 Proceedings Following TVS Credit Services and Hexaware
The Chennai Bench of the ITAT allowed the assessee’s appeal for AY 2015-16 and quashed the notice issued under section 148 and all consequential proceedings, holding that the reassessment was void ab initio for want of jurisdiction. The Tribunal admitted and adjudicated the additional legal ground raised by the assessee challenging the very assumption of jurisdiction for issuance of notice under section 148.
The ITAT noted that the notice dated 07.04.2022 had been issued by the Jurisdictional Assessing Officer (JAO), i.e., the Income Tax Officer, Ward-1, Tirunelveli, whereas after the CBDT Notification dated 29.03.2022 introducing the e-Assessment of Income Escaping Assessment Scheme, 2022, issuance of notice under section 148 and reassessment under section 147 was required to be done only through faceless and automated allocation by NFAC, in accordance with section 144B. Since both the notice under section 148 and the order under section 148A(d) were issued after the said notification, the Scheme was held to be squarely applicable.
Relying on the jurisdictional Madras High Court decision in TVS Credit Services Ltd. v. DCIT, and following coordinate bench decisions as well as High Court rulings in Hexaware Technologies Ltd. (Bom HC) and Kankanala Ravindra Reddy (Telangana HC), the Tribunal held that issuance of reassessment notice by the JAO instead of the Faceless Assessing Officer is a fatal jurisdictional defect, rendering the entire proceedings non est in law. The Tribunal also took note of dismissal of the Revenue’s SLP in a connected Telangana High Court matter, though clarifying the doctrine of merger.
Accordingly, the ITAT set aside the notice under section 148 and all consequential orders, while keeping the rights and contentions of both parties open, with liberty to revive the matter in case the Revenue ultimately succeeds before the Supreme Court in the pending challenge to Hexaware Technologies. The appeal was allowed in favour of the assessee.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
