JAO vs FAO: Section 147A Faceless Reassessment Case-Law Timeline

Summary: The JAO-FAO controversy concerns whether a Jurisdictional Assessing Officer (“JAO”) can validly issue reassessment notices after the introduction of the faceless reassessment regime. The Finance Act, 2021 substituted Sections 147 and 148 and introduced Section 148A, while Section 151A enabled schemes for faceless reassessment. The CBDT thereafter notified the e-Assessment of Income Escaping Assessment Scheme, 2022, requiring automated allocation and a faceless mechanism. High Courts subsequently divided over whether JAOs retained jurisdiction. The Bombay, Rajasthan, Karnataka and Telangana High Courts favoured the taxpayer view, while Delhi, Madras and Calcutta supported JAO authority. The Supreme Court’s dismissal of the Revenue’s SLP in Deepanjan Roy did not finally resolve the conflicting positions. Parliament then inserted Section 147A through the Finance Act, 2026 with retrospective effect from 1 April 2021, declaring that the Assessing Officer for Sections 148 and 148A excludes the NFAC and assessment units. The Supreme Court remanded pending cases to the High Courts to consider the amended law. In September 2026, the Punjab & Haryana High Court declared Section 147A unconstitutional, holding that the amendment did not remove the statutory basis underlying earlier decisions. The Centre has challenged that ruling before the Supreme Court, leaving both the jurisdictional dispute and constitutional validity of Section 147A unresolved.

JAO vs FAO: The Section 147A Battle Over Faceless Reassessment – A Complete Case-Law Timeline

Introduction

Few controversies in Indian direct tax litigation have travelled as far, or divided as many High Courts, as the question of whether a Jurisdictional Assessing Officer (“JAO”) can validly issue a reassessment notice once the faceless assessment regime came into force. What began as a technical jurisdictional dispute in 2022 has, over four years, grown into a genuine constitutional confrontation between Parliament and the judiciary — and as of September 2026, it sits once again before the Supreme Court, unresolved. This article sets out the complete, verified timeline of the JAO-FAO controversy, culminating in the retrospective insertion of Section 147A and its recent invalidation by the Punjab & Haryana High Court.

The Statutory Background

The Finance Act, 2021 overhauled reassessment procedure, substituting Sections 147 and 148 and introducing Section 148A with effect from 1 April 2021. Section 151A empowered the Central Government to notify a scheme for faceless issuance of notices, conduct of enquiries, and passing of orders under Section 148A, so as to impart greater efficiency, transparency and accountability. Pursuant to this, the CBDT notified the e-Assessment of Income Escaping Assessment Scheme, 2022 and the Faceless Jurisdiction of Income-tax Authorities Scheme, both dated 29 March 2022 (Notification No. 18/2022 and connected notifications).

The question these schemes left unresolved was simple to state but hard to answer: did the JAO retain any independent authority to issue notices under Sections 148 and 148A, or did that power now vest exclusively in the National Faceless Assessment Centre (“NFAC”)?

Genesis: The Ashish Agarwal Judgment (2022)

The controversy’s roots lie in the Supreme Court’s judgment in Union of India v. Ashish Agarwal, which dealt with reassessment notices issued under the old law after the new procedure had already come into effect from 1 April 2021. The Court held that although those notices were technically invalid under the amended law, they would be deemed show-cause notices under the new Section 148A(b), and the reassessment process would proceed afresh, using its powers under Article 142 to balance taxpayer rights against revenue interests. Ashish Agarwal resolved the transitional-notices problem but did not settle whether JAOs could act outside the faceless mechanism going forward — and that question soon flooded the High Courts.

The High Court Split (2024–25)

Bombay High Court — Hexaware Technologies: JAO Divested of Power

In Hexaware Technologies Ltd. v. Assistant Commissioner of Income-tax, Writ Petition No. 1778 of 2023, [2024] 162 taxmann.com 225 / 464 ITR 430 / 338 CTR 536 (Bom.), the Bombay High Court quashed a Section 148 notice dated 27 August 2022 issued by the JAO for AY 2015-16 on multiple grounds, including limitation, absence of a Document Identification Number, and lack of jurisdiction. On the JAO question specifically, the Court held that there is no concurrent jurisdiction between the JAO and the FAO for issuance of a Section 148 notice or for passing an assessment/reassessment order — where the March 2022 scheme assigns specific jurisdiction to either the JAO or the FAO, it is to the exclusion of the other. This became the anchor judgment for taxpayers challenging JAO-issued notices, and it was followed in later Bombay High Court rulings, including Royal Bitumen (P.) Ltd. v. ACIT [2024] 164 taxmann.com 606, Sundaram Multi Pap Ltd. v. ACIT [2024] 164 taxmann.com 608, Venus Jewel v. ACIT [2024] 164 taxmann.com 414, and Everest Kanto Cylinder Ltd. v. DCIT/ACIT [2024] 165 taxmann.com 192.

Delhi High Court — Concurrent Jurisdiction

The Delhi High Court took a contrary view. In T.K.S. Builders (P.) Ltd. v. ITO, [2024] 167 taxmann.com 759 (Delhi), it held that the faceless system does not nullify the JAO’s role in conducting assessments and that the JAO could not be stripped of authority merely because Section 144B and the faceless scheme had been introduced — expressly distinguishing Hexaware on the ground that the Bombay High Court had not considered an August 2020 notification granting NFAC officers concurrent powers with the Assessing Officer. Delhi’s position hardened into a settled line: both the JAO and FAO possess concurrent jurisdiction to initiate reassessment under Section 148. This was reaffirmed as recently as Yukti Export v. Income-tax Officer, [2025] 179 taxmann.com 619 (Delhi), and again in Inder Dev Gupta v. Assistant Commissioner of Income-tax (Delhi HC, 21 November 2025), where the Revenue argued — and the Court accepted the point was arguable — that a later Supreme Court dismissal in the Deepanjan Roy matter (discussed below) was an unreasoned dismissal in limine and did not conclusively settle the law, particularly since the Revenue’s own appeals against Hexaware and T.K.S. Builders remained pending before the Supreme Court at that time.

Madras High Court — JAO’s Exclusive Authority

In Mark Studio India Private Limited v. Income Tax Officer, W.P. Nos. 25223 & 25227 of 2024, decided 20 December 2024, the Madras High Court held that no provision of the Act divests the JAO of authority to issue notices under Sections 148 and 148A where no separate post-2022 scheme explicitly hands that power to NFAC/FAO alone. The Court held the JAO retains exclusive authority to issue such notices, with NFAC’s role confined to completing the faceless assessment once the notice has been issued. This line continued in later Madras rulings, including TVS Credit Services Ltd. v. DCIT (24 June 2025) and Dadha Pharma LLP v. DCIT, W.P. No. 35385 of 2024 (which, notably, later followed the Hexaware ratio instead).

Calcutta High Court — Notice by JAO Not Invalid

The Calcutta High Court, in Triton Overseas Private Limited v. Union of India and Sanghi Steel Udyog (P.) Ltd. v. Union of India & Ors., similarly held that a Section 148 notice issued by the JAO rather than the NFAC is not, for that reason alone, invalid.

Telangana High Court — Faceless Procedure Mandatory

The Telangana High Court took the taxpayer-favourable view in Sri Venkataramana Reddy Patloola v. Deputy Commissioner of Income Tax, Circle 1(1), Hyderabad & Others, Writ Petition Nos. 13353, 16141 & 16877 of 2024, judgment dated 24 July 2024, holding that issuance of a notice under Section 148 must mandatorily follow the faceless, automated procedure under the e-Assessment of Income Escaping Assessment Scheme, 2022. This reasoning was applied in a connected matter, Deepanjan Roy v. ADIT (International Taxation)-2, W.P. No. 23573 of 2024.

Rajasthan and Karnataka High Courts

The Rajasthan High Court, beginning with Shree Cement Limited and Sharda Devi Chhajer, and followed in a long line of subsequent rulings (including Darshan Dhankani v. PCIT, Sumit Agarwal v. ACIT, Bharat Kumar v. DCIT, and Krishan Gopal Gupta v. PCIT), consistently held that the JAO lacks authority to issue reassessment notices under Section 148 once the e-Assessment Scheme of 2022 applies. The Karnataka High Court reached a similar conclusion in Ramachandra Reddy Ravi Kumar v. Deputy CIT (2025), holding that the JAO stood divested of the power to issue Section 148 notices from the date of Notification No. 18/2022.

By mid-2025, the position across India was genuinely irreconcilable — Bombay, Rajasthan, Karnataka and Telangana favoured the taxpayer view; Delhi, Madras and Calcutta favoured the Revenue.

Round One at the Supreme Court: The Deepanjan Roy Dismissal (July 2025)

The Revenue carried its challenge against the Telangana High Court’s ruling in Deepanjan Roy to the Supreme Court by way of a Special Leave Petition — ADIT (International Taxation)-2, Hyderabad & Anr. v. Deepanjan Roy, SLP (Civil) Diary No. 33956/2025. On 16 July 2025, a Bench of Justices J.B. Pardiwala and R. Mahadevan dismissed the Revenue’s SLP, recording simply that, having heard counsel for the Revenue and gone through the record, the Court found “no good reason to interfere with the impugned order passed by the High Court.”

This dismissal was widely reported as having settled the JAO-FAO question in the taxpayer’s favour, and several High Courts and Tribunals thereafter treated it as binding. However, being an unreasoned dismissal in limine, it did not, strictly speaking, constitute a declaration of law under Article 141 — it bound the parties before the Court and the Telangana High Court, but did not, by itself, overrule the contrary view taken by the Delhi, Madras and Calcutta High Courts, whose own appeals remained separately pending. The Revenue subsequently filed a Miscellaneous Application seeking restoration of the dismissed SLP for being heard together with a larger batch of over 700 connected matters raising the identical question.

Parliament Intervenes: Section 147A (Finance Act, 2026)

While the larger batch of Revenue appeals remained pending, Parliament inserted a new Section 147A into the Income-tax Act, 1961 through the Finance Act, 2026, with retrospective effect from 1 April 2021 — the very date on which the faceless regime commenced. The provision declares that, for the purposes of Sections 148 and 148A, the expression “Assessing Officer” means, and shall always be deemed to have meant, an Assessing Officer other than the National Faceless Assessment Centre or an assessment unit referred to in Section 144B(3). In effect, Parliament sought to legislatively establish that JAOs could validly conduct reassessment proceedings all along, overriding the line of High Court rulings that had held otherwise.

The Supreme Court Remands: ITO v. Tej Partap Singh (April 2026)

Against this changed statutory backdrop, a large batch of Revenue appeals — led by Income Tax Officer, Ward 2(1), Chandigarh & Ors. v. Tej Partap Singh, arising from a Punjab & Haryana High Court judgment that had quashed Section 148A(d) orders and consequential Section 148 notices on the ground that they were issued by JAOs outside the faceless mechanism — came up before the Supreme Court. By its order dated 10 April 2026, the Supreme Court disposed of the batch with deliberate restraint. It expressly declined to rule on the correctness of the conflicting High Court decisions or on the validity, scope, effect or retrospectivity of the newly inserted Section 147A, leaving all these questions open to be decided afresh by the respective High Courts in light of the amendment. A connected order to the same effect followed in ITO v. Sai Kumar Mateti on 4 May 2026, and further batches of pending appeals — including in Rudra Alloys (P.) Ltd. — were disposed of in identical terms by the Bench of Chief Justice Surya Kant and Justice V. Mohana, all remitted to the jurisdictional High Courts. Critically, the Court’s order kept open the taxpayers’ liberty to challenge the constitutional validity of Section 147A itself before the High Courts — an invitation the Punjab & Haryana High Court was the first to take up.

Punjab & Haryana High Court Strikes Down Section 147A (September 2026)

On remand, a Division Bench of Justice Deepak Sibal and Justice Rupinderjit Chahal heard a batch of nearly 700 connected writ petitions — including Jyoti Sareen v. Union of India & Ors. — and, by an order pronounced on 10 September 2026 (detailed order dated 11 September 2026), declared Section 147A unconstitutional.

The Bench applied the settled doctrine governing “validating legislation”: a legislature may retrospectively cure a defective law only by removing the actual basis on which a court found it defective — it cannot simply declare, after the event, that the earlier judicial interpretation no longer holds while leaving the underlying defect untouched. Applying this test, the Court found that the earlier rulings quashing JAO-issued notices rested on Section 151A and the faceless e-Assessment Scheme of 29 March 2022, which mandate randomised, automated, faceless allocation of notices. Section 147A, the Court held, left that foundation completely intact — it merely redefined who counts as an “Assessing Officer” without altering the requirement that reassessment proceed through the faceless mechanism. Since the basis of the earlier judgments survived, the redefinition could not retrospectively validate notices issued in breach of it. The Bench went further, observing that a validating law enacted solely to override a judicial pronouncement — without curing the defect the pronouncement identified — amounts to legislative overreach, and consequently set aside the Section 148 notices before it.

Where Matters Stand Today

The Centre has not let this rest. On or around 16 September 2026, the Union Government moved the Supreme Court against the Punjab & Haryana High Court’s ruling. Additional Solicitor General N. Venkataraman mentioned the Special Leave Petition before Chief Justice of India Surya Kant for urgent listing, submitting that the overwhelming majority of assessees and officers had proceeded on the footing that JAO-issued notices were valid both before and after the amendment, and that the High Court’s ruling had created what he described as a “huge vacuum” in law. The CJI agreed to list the matter urgently.

As things stand, no final view has been taken by the Supreme Court either on the original JAO-versus-FAO jurisdictional question or on the constitutional validity of Section 147A. The Punjab & Haryana ruling binds within that State for now, but other High Courts remain free to reach a different conclusion on Section 147A when the question comes before them, and the underlying conflict between High Courts on the primary jurisdictional issue remains formally unresolved outside that one ruling.

Practical Implications for Taxpayers and Practitioners

Notices issued by JAOs remain contestable, particularly in jurisdictions that have followed the Hexaware/Rajasthan/Karnataka/Telangana line of reasoning.

Section 147A cannot presently be relied upon with certainty to validate JAO-issued notices, given the Punjab & Haryana ruling and the Centre’s pending challenge to it before the Supreme Court.

Taxpayers with live reassessment proceedings initiated by a JAO should evaluate, on facts, whether a writ challenge is worth pursuing — bearing in mind that the final word rests with the Supreme Court and that Delhi, Madras and Calcutta High Courts continue to uphold JAO authority.

This is a fast-moving area. Given the Centre’s plea for urgency and the CJI’s agreement to list the matter, a substantive Supreme Court ruling — potentially settling both the JAO-FAO question and the validity of Section 147A together — may not be far off.

Conclusion

The JAO-FAO controversy illustrates how a seemingly procedural question — who may issue a notice — can escalate into a full-blown debate about the limits of retrospective validating legislation and the separation of powers. Practitioners would do well to track the Supreme Court’s forthcoming hearing closely, as its outcome will determine the fate of a very large number of reassessment proceedings initiated since April 2021.

Cases Discussed

1. Union of India v. Ashish Agarwal (Supreme Court)
2. Hexaware Technologies Ltd. v. Assistant Commissioner of Income-tax [2024] 162 taxmann.com 225 / 464 ITR 430 / 338 CTR 536 (Bom.)
3. Royal Bitumen (P.) Ltd. v. ACIT [2024] 164 taxmann.com 606 (Bom.)
4. Sundaram Multi Pap Ltd. v. ACIT [2024] 164 taxmann.com 608 (Bom.)
5. Venus Jewel v. ACIT [2024] 164 taxmann.com 414 (Bom.)
6. Everest Kanto Cylinder Ltd. v. DCIT/ACIT [2024] 165 taxmann.com 192 (Bom.)
7. T.K.S. Builders (P.) Ltd. v. ITO [2024] 167 taxmann.com 759 (Delhi)
8. Yukti Export v. Income-tax Officer [2025] 179 taxmann.com 619 (Delhi)
9. Inder Dev Gupta v. Assistant Commissioner of Income-tax (Delhi High Court, 21 November 2025)
10. Mark Studio India Private Limited v. Income Tax Officer, W.P. Nos. 25223 & 25227 of 2024 (Mad.)
11. TVS Credit Services Ltd. v. DCIT (Madras High Court, 24 June 2025)
12. Dadha Pharma LLP v. DCIT, W.P. No. 35385 of 2024 (Mad.)
13. Sri Venkataramana Reddy Patloola v. Deputy Commissioner of Income Tax, Circle 1(1), Hyderabad & Others, W.P. Nos. 13353, 16141 & 16877 of 2024 (Telangana High Court)
14. Deepanjan Roy v. ADIT (International Taxation)-2, W.P. No. 23573 of 2024 (Telangana High Court)
15. Ramachandra Reddy Ravi Kumar v. Deputy CIT (Karnataka High Court, 2025)
16. ADIT (International Taxation)-2, Hyderabad & Anr. v. Deepanjan Roy, SLP (Civil) Diary No. 33956/2025 (Supreme Court)
17. Income Tax Officer, Ward 2(1), Chandigarh & Ors. v. Tej Partap Singh (Supreme Court, 10 April 2026)
18. ITO v. Sai Kumar Mateti (Supreme Court, 4 May 2026)

******

(The author, CA Ayush Mittal, is a Partner at M/s Jay Pee Associates, Chartered Accountants, Agra. This article is for general informational purposes and reflects the reported legal position as of 20 September 2026; readers are advised to verify the current status before relying on it, as the Supreme Court’s ruling on the pending Special Leave Petition may alter the position stated herein.)