Pooja Prabhakar Vs ITO (ITAT Chennai)
JAO Can’t Issue Reopening Notice Post-Faceless Scheme: ITAT Chennai Quashes 148 & Entire Reassessment for AY 2018-19
Chennai ITAT allowed the appeal of Ms. Pooja Prabhakar for AY 2018-19, condoned a delay of 259 days, and quashed the reassessment proceedings in entirety after holding that the notice u/s 148 issued by the Jurisdictional AO (JAO) on 31-03-2022 was invalid being contrary to section 151A and the Faceless Reassessment Scheme notified on 29-03-2022
The Assessee had not filed a return for AY 2018-19. Based on information regarding fixed deposits, purchase of a motor vehicle, cash deposits and interest income, the JAO issued notice u/s 148A(b), passed an order u/s 148A(d) and thereafter issued notice u/s 148 on 31-03-2022, followed by an ex-parte reassessment u/s 147 r.w.s. 144 making multiple additions u/s 69, 69A, 69C r.w.s. 115BBE.
At the threshold, the Tribunal held that the CIT(A) erred in dismissing the appeal on limitation and condoned the delay by applying the liberal principles laid down by the Supreme Court in Collector, Land Acquisition v. Mst. Katiji, Ram Nath Sao and Vidya Shankar Jaiswal.
On merits of jurisdiction, the Tribunal admitted the legal ground and held that after the CBDT notification dated 29-03-2022 issued u/s 151A, all actions under sections 148A(b), 148A(d) and issuance of notice u/s 148 must be through the faceless mechanism. Since the impugned notice and order were issued by the JAO and not by the NFAC/FAO, the entire reopening stood vitiated.
The Tribunal followed binding precedents including Hexaware Technologies Ltd. (Bom HC), Kankanala Ravindra Reddy (Telangana HC), TVS Credit Services Ltd. (Madras HC – DB) and noted that the Supreme Court has already dismissed the Revenue’s SLP in Deepanjan Roy, thereby reinforcing the legal position. It was held that non-compliance with the faceless mandate violates the rule of law and renders the reopening void ab initio.
Accordingly, the notice u/s 148 dated 31-03-2022 and the consequential reassessment order dated 03-03-2023 were quashed, and since the Assessee succeeded on the legal issue, the Tribunal did not examine the additions on merits.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal preferred by the assessee is directed against the order dated 25.08.2025 passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”). The said order emanates from the assessment framed by the National Faceless Assessment Centre (hereinafter referred to as the “AO”) u/s.147 r.w.s 144 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), vide assessment order dated 03.03.2023 (DIN: ITBA/AST/S/147/2022-23/1050394107(1)), for the Assessment Year 2018-19.
