Thilak Babu Boppana Vs ITO (ITAT Hyderabad)
Reassessment Quashed for Want of Faceless Jurisdiction — ITAT Hyderabad Applies Kankanala Ravindra Reddy
The Hyderabad Bench of the ITAT quashed the reassessment for AY 2020-21, holding that the entire proceedings were without jurisdiction as the notice under section 148 and order under section 148A(d) were issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO), in violation of the faceless regime mandated under sections 144B and 151A read with the E-Assessment of Income Escaping Assessment Scheme, 2022.
Key findings:
- Mandatory faceless mechanism ignored: After introduction of the 2022 Schemes, issuance of notice u/s 148 and reassessment proceedings must be carried out only through automated, faceless allocation. Action by the JAO outside this framework is per se illegal.
- Covered by binding High Court precedent: The Tribunal followed the Telangana High Court ruling in Kankanala Ravindra Reddy v. ITO, which categorically held that notices and orders issued by jurisdictional officers (and not FAOs) after the faceless scheme came into force are invalid.
- Revenue’s concession: The Department fairly conceded that the issue was squarely covered against it.
- Consequential orders fall: Since initiation itself was void, the assessment framed u/s 147 r.w.s. 144 & 144B dated 28-02-2025 was also quashed.
- Merits left open: As the reassessment failed on jurisdiction, issues relating to cash deposits, GST turnover estimation, rental income and best-judgment assessment were not examined.
- Liberty to Revenue preserved: Following the High Court’s observations, liberty was kept open for the Revenue to proceed afresh, if permissible, subject to the outcome of the SLP pending before the Supreme Court on the Kankanala issue.
Accordingly, the assessee’s appeal was allowed, and the reassessment was quashed in entirety for lack of valid jurisdiction.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
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