Narayanan Varalakshmi Vs ITO (ITAT Chennai)
148 Notice Issued by JAO After 29-03-2022 Held Invalid—Faceless Reassessment Mandatory; Entire 147 Proceedings Quashed
Assessee, who runs a small bus-transport service and had not filed return for AY 2018-19 as her income was below the taxable limit, received information regarding cash deposits of ₹92,28,000, time deposits of ₹10,12,572 and bank interest of ₹72,193. Based on this, the ITO, Non-Corp Ward 1(3), Madurai, issued notice u/s 148 on 30-03-2022 and passed an order u/s 148A(d) on 28-03-2022. The Assessment Unit, NFAC completed reassessment u/s 147 r.w.s. 144, making addition of ₹16,66,330 u/s 69A as unexplained cash deposits. CIT(A)/NFAC upheld the reassessment.
Before the Tribunal, the Assessee raised an additional legal ground challenging the jurisdiction of the JAO in issuing the notice on 30-03-2022, relying on the CBDT Notification dated 29-03-2022 which introduced the Faceless Reassessment Scheme, 2022 under section 151A. Under this scheme, all notices u/s 148 issued on or after 29-03-2022 must be issued only through the automated faceless mechanism and not by a Jurisdictional AO.
The Tribunal examined the record and found that although the 148A(d) order was passed on 28-03-2022, the crucial 148 notice was issued on 30-03-2022, i.e., after the CBDT Notification became effective, and was issued not by the Faceless Unit but by the Jurisdictional ITO, contrary to the mandatory statutory scheme. Relying extensively on the judgments of:
