Mark Studio India Private Limited Vs ITO (Madras High Court)
In a significant ruling, the Madras High Court addressed several procedural aspects of the Income Tax Act (IT Act) concerning the issuance of notices under Section 148. The court emphasized the jurisdictional clarity for the issuance of such notices, stating that only the Jurisdictional Assessing Officer (JAO) holds exclusive jurisdiction for issuing Section 148 notices. However, for the assessment, re-assessment, or re-computation under Section 147, both the JAO and the Faceless Assessment Officer (FAO) have concurrent jurisdiction.
The court further clarified the role of the Directorate of Income Tax (Systems), which now has the authority to allocate cases for the issuance of Section 148A/148 notices. These allocations will be based on a risk management strategy outlined in the Scheme dated March 29, 2022, and will be assigned to the JAO based on the PAN jurisdiction. The JAO is required to issue notices in a faceless manner through the ITBA Portal and digitally sign them, with no name reference, sending them to the registered email accounts of the assessees.
In the present case, notices were issued following the procedures of the Scheme, although a procedural error occurred where the JAO’s name was mentioned. The court ruled that such errors are curable and do not invalidate the initiation of proceedings under Section 148. Additionally, it was noted that under Section 151A, prior approval must be obtained from higher authorities before issuing these notices. After the JAO issues the notice, it is forwarded to NaFAC for further actions under Section 144B of the IT Act, which involves additional notices to the assessee for further information.
