ESI Hospital Employees Cooperative Thrift & Credit Society Limited Vs ITO (ITAT Chennai)
Reassessment Notice Issued by Jurisdictional AO Post-29-03-2022 Is Void: ITAT Chennai Quashes 148 Proceedings Under Faceless Regime
In ESI Hospital Employees Co-operative Thrift & Credit Society Ltd. vs. ITO, (ITA No.3030/Chny/2025, AY 2016-17), the Chennai ITAT “D” Bench allowed the Assessee’s appeal and quashed the reassessment proceedings in entirety by holding that the notice u/s 148 issued by the Jurisdictional Assessing Officer (JAO) after 29-03-2022 is invalid, being contrary to the Faceless Reassessment Scheme notified u/s 151A.
The Tribunal admitted an additional pure legal ground on jurisdiction, relying on NTPC v. CIT (SC), and noted that the notice u/s 148 and the order u/s 148A(d), both dated 17-03-2023, were issued by the JAO instead of the Faceless Assessment Officer (FAO), despite the CBDT Notification dated 29-03-2022 mandating faceless issuance of reassessment notices.
Following the Division Bench judgment of the Madras HC in TVS Credit Services Ltd., and consistent with rulings of the Bombay HC (Hexaware Technologies Ltd.) and Telangana HC (Kankanala Ravindra Reddy, Sri Venkataramana Reddy Patloola), the Tribunal held that non-compliance with the faceless mechanism is a jurisdictional defect that vitiates the entire reassessment. The Tribunal also took note of the dismissal of Revenue’s SLP by the Supreme Court in Deepanjan Roy, reinforcing the legal position.
Accordingly, the notice u/s 148 and all consequential proceedings were set aside as void ab initio, while keeping liberty open to the Revenue to seek revival if the Apex Court subsequently reverses the law. The appeal was allowed in full, without entering into the merits of additions.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
