Kumaresan Bhagavathiperumal Pillai Vs ITO (ITAT Chennai)
Faceless Regime Must Prevail – ITAT Chennai Quashes Reassessment Notice Issued by Jurisdictional Assessing Officer (JAO) Instead of Faceless Assessing Officer (FAO)
Chennai ITAT allowed the Assessee’s appeal by setting aside reassessment proceedings initiated in violation of the CBDT Notification dated 29.03.2022 which mandated faceless procedure.
The Assessee challenged the validity of notice u/s 148 dated 22.04.2022 & order under clause (d) of section 148A, both issued by Jurisdictional AO, Non-Corporate Ward-3, Coimbatore & later by ITO(IT), Tuticorin. It was contended that under the “E-Assessment of Income Scheme, 2022”, all notices & reassessments u/s 147/148 were required to be issued through automated allocation by NFAC in faceless manner, in line with section 144B. Hence, action of JAO was without jurisdiction.
Tribunal, relying on Hexaware Technologies Ltd v. ACIT (2024) 464 ITR 430 (Bom), Kankanala Ravindra Reddy v. ITO (2023) 156 taxmann.com 178 (Telangana) & subsequent Telangana HC rulings including Sri Venkatramana Reddy Patloola (2024) & Deepanjan Roy (2024), held that non-faceless notices u/s 148 were invalid & all consequent proceedings stood vitiated. It also noted that the Hon’ble Supreme Court dismissed Revenue’s SLP in ADIT v. Deepanjan Roy (SLP(C) 018753/2025), refusing to interfere with HC’s finding that mandatory faceless procedure was not followed.
Tribunal also considered the jurisdictional Madras High Court ruling in TVS Credit Services Ltd v. DCIT (2025), which affirmed that issuance of notice by JAO instead of Faceless AO renders such notice invalid. As there was no stay against the Hexaware ruling, the Tribunal held that the law laid down therein squarely applied.
On the doctrine of merger, Tribunal observed that mere dismissal of SLP at admission stage does not amount to declaration of law under Article 141 of the Constitution (Kunhayammed v. State of Kerala 245 ITR 360 (SC)). However, till reversal by Supreme Court, the binding effect of HC rulings & jurisdictional HC decision prevails.
Accordingly, ITAT quashed the notice u/s 148 & consequential orders, with liberty to Revenue to revive the proceedings if Supreme Court later upholds Revenue’s stand in pending SLP against Hexaware.
The Assessee’s appeal allowed; notice & reassessment proceedings annulled as invalid for not being issued under faceless regime mandated by CBDT Notification dated 29.03.2022.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
