DCIT Vs Seth Industrial Corporation (ITAT Chandigarh)
Seth Industrial Corporation, engaged in manufacturing of bicycles, filed its return on 03.09.2018. A search u/s 132 was conducted on 21.10.2021. Based on search findings, Jurisdictional AO (JAO) issued notice u/s 148A(b) on 24.03.2022 & after passing order u/s 148A(d), issued notice u/s 148 on 06.04.2022. Reassessment u/s 147 was completed on 24.08.2023 with additions of ₹130 lakhs & ₹21.58 lakhs u/s 69 r.w.s. 115BBE. CIT(A) deleted ₹21.58 lakhs but sustained ₹45.25 lakhs out of ₹130 lakhs. Both Assessee & Revenue filed appeals.
At the outset, Assessee raised an additional legal ground that the reopening itself is void as the notice u/s 148 was issued by Jurisdictional AO instead of Faceless AO, in violation of Sec.151A r.w. CBDT Notification No.18/2022 dated 29.03.2022. It was argued that the law mandates that notices u/s 148 & 148A must be issued only by Faceless AO, & any notice issued by JAO is without jurisdiction & vitiates the entire proceedings. Assessee relied upon the landmark judgment of the Punjab & Haryana High Court in Jatinder Singh Bhangu (165 Taxmann.com 115; 19.07.2024) wherein it was held that faceless regime applies from the stage of notice u/s 148, & any notice issued by Jurisdictional AO is illegal. The High Court categorically held that CBDT circulars or office memoranda cannot override statutory provisions. The same view was subsequently reiterated in Om Satya Overseas (178 Taxmann.com 137; 29.08.2025). The Departmental Representative could not dispute that the impugned notice was in fact issued by JAO.
