Faceless Procedure Mandatory for Central and International taxation Charges

Anup Kumar Aggarwal Vs ACIT (ITAT Chandigarh)

The appeal filed by the assessee for Assessment Year (AY) 2021-22 challenges the order of the Commissioner of Income Tax (Appeals)-3, Gurgaon (CIT(A)) dated 31-07-2025, which confirmed additions of Rs.10.95 lakh under Section 69 and Rs.16.21 lakh under Section 69A following a departmental search on 04-11-2022. The assessment was framed by the Assessing Officer (AO) under Section 147 on 12-03-2025 and a notice under Section 148 was issued on 29-12-2023 by G. Poojitha, DCIT/ACIT (Central), Shimla, the Jurisdictional Assessing Officer (JAO). The assessee filed a return declaring income of Rs.17.01 lakh on 30-01-2024. The assessee contended that the reopening of the assessment was illegal because, as per Section 151A read with CBDT Notification No.18/2022 dated 29-03-2022, the notice under Section 148 should have been issued by a Faceless Assessing Officer (FAO), not the JAO. This contention was supported by precedent, including the Punjab & Haryana High Court decision in Jatinder Singh Bhangu (165 Taxmann.com 115; 19-07-2024), which held that issuance of a Section 148 notice by a JAO instead of an FAO vitiates the assessment.

The assessee’s legal argument emphasized that statutory provisions under Sections 144B and 151A read with the notification mandate faceless issuance of notices, and departmental circulars or instructions cannot override these provisions. The CIT-DR argued that the faceless scheme does not apply to Central charges and international taxation matters, but this contention was rejected based on precedents including Hexaware Technologies Ltd. (464 ITR 430), Capital G LP, and the Division Bench of Telangana High Court in Sri Venkataramani Reddy Patloola v. DCIT, Hyderabad (2024 SCC OnLine TS 1792), which consistently held that the faceless mechanism applies to such charges.