Section 151A Notice issued by JAOs instead of FAOs are invalid: Bombay HC

Hitesh Ramniklal Shah Vs ACIT (Bombay High Court)

In the recent judgment of Hitesh Ramniklal Shah Vs ACIT delivered by the Bombay High Court, the court addressed crucial issues related to the validity of notices issued under Section 148 of the Income Tax Act, 1961. This case has significant implications for how jurisdictional assessing officers (JAOs) and faceless assessing officers (FAOs) issue notices, especially in light of the procedural requirements laid down under Section 151A of the Act. The court’s decision follows its earlier ruling in the Hexaware Technologies Limited case, thereby setting a precedent for similar cases.

1. Background of the CaseThe petitions under consideration were filed challenging the validity of notices issued by JAOs. The petitioners contended that these notices were invalid as they did not comply with the procedural norms established under Section 151A of the Income Tax Act. Section 151A stipulates that notices under Section 148 must be issued by an FAO, not a JAO, to ensure adherence to the faceless assessment scheme introduced to curb discrepancies and enhance transparency in tax assessments.
2. Legal Framework and Relevant JudgmentThe crux of the petitioners’ argument was that the notices in question were issued improperly. They cited the judgment in Hexaware Technologies Limited v. Assistant Commissioner of Income Tax (Writ Petition No. 1778 of 2023) as a pivotal reference. In this judgment, the Bombay High Court had already determined that notices not issued in accordance with Section 151A are invalid. This ruling was instrumental in shaping the current case.

   Please become a Premium member. If you are already a Premium member, login here to access the full content.