Mamballi Sundar Vijayendra Vs ITO (Karnataka High Court)
Reassessment u/s 148A by Jurisdictional AO beyond scope of Sec 151A quashed by Karnataka HC- Faceless Assessment Regime prevails—Local AO notice u/s 148A held invalid- HC follows its own 2025 precedent in WP 28182/2024
Facts & Prayer
Assessee challenged multiple proceedings initiated by ITO Ward-1(1)/2(4) Mysuru & NFAC, including—
- Order u/s 148A(d) dated 17-03-2024,
- Notice u/s 148 & its corrigendum,
- Re-assessment order u/s 147 r.w.s 144/144B dated 30-01-2025, and
- Penalty orders u/s 271F, 272A(1)(d) & 271AAC(1) for A.Y. 2017-18.
The grievance was that the jurisdictional AO issued the Sec 148A notice instead of the Faceless AO, violating the CBDT’s faceless regime u/s 151A, rendering the entire reassessment void.
Held
- The Court noted that the issues raised were identical to those already decided in W.P. No. 28182/2024 & connected cases disposed of on 28-08-2025.
- Following that precedent, it held that any notice or show-cause issued by the jurisdictional AO outside the framework of Sec 151A stands obliterated, and all consequential proceedings—including reassessment & penalty orders—are quashed.
- However, the Revenue was granted liberty to revive proceedings if the Supreme Court later upholds the Department’s stand in the pending matter on this issue.
- Show-cause notice & all proceedings u/s 148A, 148, 147 r.w.s 144/144B & penalty orders were quashed.
- Liberty to Revenue to revive if Apex Court decides in its favour.
- Other contentions kept open.
- Writ petition allowed accordingly.
This judgment reinforces the Karnataka HC’s consistent stance that faceless reassessment jurisdiction u/s 151A overrides local AO action. Any reassessment initiated directly by the jurisdictional AO post-2021 is non est in law, unless the CBDT scheme is judicially upheld by the Supreme Court.
