Reassessment Quashed: JAO Lacks Jurisdiction to Issue Section 148A/148 Notices Under Faceless Scheme

Issue

Whether the reassessment proceedings initiated by a Jurisdictional Assessing Officer (JAO)—including notices under Section 148A(b) and Section 148—are valid in law, considering the mandate of Section 151A of the Income-tax Act which requires such proceedings to be conducted by a Faceless Assessing Officer (FAO).

Facts

Assessment Year: 2018-19.
The Proceedings: The assessee was subjected to reassessment proceedings. The Jurisdictional Assessing Officer (JAO) issued:
- Show Cause Notice under Section 148A(b).
- Order under Section 148A(d).
- Notice under Section 148.
- Final Assessment Order under Section 147 read with Section 144, along with demand and penalty notices.
The Challenge: The assessee filed a writ petition challenging the entire proceeding on the ground of lack of jurisdiction.
The Argument: The assessee contended that post the notification of the Faceless Assessment Scheme under Section 151A, the JAO had no authority to issue these notices. The power was exclusively vested in the Faceless Assessment Unit. The assessee relied on the binding precedent of the same High Court in Ramachandra Reddy Ravi Kumar v. Dy. CIT.

Decision

The Karnataka High Court ruled decisively in favour of the assessee.
Binding Precedent: The Court held that the issue was directly and squarely covered by the decision of its Co-ordinate Bench in Ramachandra Reddy Ravi Kumar.
JAO Jurisdiction Ousted: Following that judgment, the Court affirmed that show-cause notices issued by a JAO contrary to the mandate of Section 151A (Faceless Assessment) are legally invalid and stand “obliterated.”
Consequential Relief: Since the foundational notices were void, all consequential proceedings—including the Section 148A(d) order, the Section 148 notice, the assessment order, and the demand notices—were quashed.

Key Takeaways

Exclusive Jurisdiction of Faceless Unit: This judgment reinforces the principle that after the implementation of the Faceless Assessment Scheme (specifically Notification No. 18/2022), local Jurisdictional Assessing Officers have lost the power to issue reassessment notices under Section 148/148A.
Jurisdictional Error is Fatal: Issuing a notice through the wrong officer (JAO instead of FAO) is a fundamental jurisdictional defect that vitiates the entire assessment proceeding from the start.
Precedent Applied: The Court applied the ratio that procedural mandates for faceless assessment are non-negotiable safeguards for the taxpayer.

HIGH COURT OF KARNATAKA

Bunts Pakirappa Narayana Rai

Income-tax Officer

S.R.Krishna Kumar, J.

WRIT PETITION No. 15888 OF 2023 (T-IT)

OCTOBER 24, 2025

Shreehari Kutsa, Adv. for the Petitioner. Sushal Tiwari, Adv. for the Respondent.

ORDER

In this petition, petitioner seeks for the following reliefs:-

“a. Issue a Writ of Certiorari or direction in the nature of writ of certiorari quashing the notice under section 148A(b) of the Income Tax Act, 1961 dated 14.03.2022 issued by the Respondent No.1 which bears the DIN – ITBA/AST/F/148A(SCN)/2021-22/1040718207(1) and enclosed as Annexure A1.

b. Issue a Writ of Certiorari or direction in the nature of certiorari quashing the order under section 148A(d) of the Income Tax Act, 1961 dated 27.03.2022 issued by the Respondent No.1 which bears the DIN – ITBA/AST/F/148a/2021-22/1041754393(1) and enclosed as Annexure-B1.

c. Issue a Writ of Certiorari or direction in the nature of certiorari quashing the notice under section 148 of the Income Tax Act, 1961 dated 27.03.2022 issued by the Respondent No.1 which bears the DIN – ITBA/AST/S/148_1/2021-22/1041769577(1) and enclosed as Annexure-C1.

d. Invoking the extra-ordinary jurisdiction of this Hon’ble Court seeking quashing of the order of assessment under section 147 r.w.s. 144 of the Income Tax Act, 1961 dated 30.03.2023 issued by the Respondent No.1 for the Assessment Year 2018-19 which bears the DIN viz., ITBA/AST/S/147/2022-23/1051637333(1) and enclosed as Annexure-D1.

e. Invoking the extra-ordinary jurisdiction of this Hon’ble Court seeking quashing of the notice of demand under section 156 of the Income Tax Act, 1961 dated 30.03.2023 issued by the Respondent No.1 for the Assessment Year 2018-19 which bears the DIN viz., ITBA/AST/S/156/2022-23/1051637475(1) and enclosed as Annexure-D2.

f. Invoking the extra-ordinary jurisdiction of this Hon’ble Court seeking quashing of the notice under section 271AAC(1) of the Income Tax Act, 1961 dated 30.03.2023 issued by the Respondent No.1 for the Assessment Year 2018-19 which bears the DIN viz., ITBA/pNL/S/271AAC(1)/2022-23/1051647644(1) and enclosed as Annexure-D3.

g. Invoking the extra-ordinary jurisdiction of this Hon’ble Court seeking quashing of the notice under section272A(1)(d) of the Income Tax Act, 1961 dated 30.03.2023 issued by the Respondent No.1 for the Assessment Year 2018-19 which bears the DIN viz., ITBA/pNL/S/272A(1)(d)/2022-23/1051647854(1) and enclosed as Annexure-D4.

h. And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity.”

2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.

3. In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner invited my attention to the order of a Co-ordinate Bench of this Court in the case of Ramachandra Reddy Ravi Kumar v. Deputy Commissioner of Income-tax (Karnataka)/ W.P.No. 17352/2022 and connected matters -dated 28.08.2025, in order to contend that the present petition deserves to be allowed and disposed of in terms of the said order.

4. Per contra, learned counsel for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed.

5. As rightly contended by the learned counsel for the petitioner the present petition is directly and squarely covered by the decision of a Co-ordinate Bench of this Court in the case of Ramachandra Reddy Ravi Kumar (supra), the operative portion of which reads as under:

“13. I, therefore, pass the following:

ORDER

(i) The impugned show cause notices issued by the jurisdictional Assessing Officer outside the scope of Section 151-A of the Act stand obliterated. All further proceedings initiated thereto, challenged in these cases would stand quashed.

(ii) Liberty is reserved to the respondents – revenue to revive all these petitions in the event the Apex Court would hold in favour of the Revenue in the pending before it.

(iii) With the aforesaid liberty and to the aforesaid extent, the petitions are allowed.

(iv) Contentions of both the parties except the one noted hereinabove, shall remain open to be considered in the event revival of these petitions would become necessary.”

6. The aforesaid order is applicable to the facts and circumstances of the instant case and consequently, the present petition also deserves to be disposed of in terms of the judgment of co-ordinate Bench of this Court in Ramachandra Reddy’s case supra.

7. In the result, I pass the following:

order

(i) The petition is allowed and disposed of in terms of the decision of a Co-ordinate Bench of this Court in the case of Ramachandra Reddy Ravi Kumar (supra).

(ii) The impugned show cause notices and consequential orders, notices etc., at Annexures-A1, B1, C1, D1, D2, D3 and D4 dated 14.03.2022, 27.03.2022, 27.03.2022, 30.03.2023, 30.03.2023, 30.03.2023 and 30.03.2023 respectively are hereby quashed.

(iii) Liberty is reserved in favour of the respondents -Revenue to seek revival of this petition, subsequent to disposal of the matters pending before the Apex Court and all rival contentions between the parties in this regard are kept open and no opinion is expressed on the same.