Reassessment Order Quashed as the Initiating Notice Under Section 148 Lacked a Mandatory DIN

I. On Reassessment Notice Lacking a DIN

Reassessment Order Quashed as the Initiating Notice Under Section 148 Lacked a Mandatory DIN.

Issue

Is a reassessment notice issued under section 148 of the Income-tax Act, 1961, legally valid if it does not contain a Document Identification Number (DIN), and can a subsequent assessment order based on such a notice be sustained?

Facts

The Assessing Officer (AO) issued a notice under section 148 to reopen the assessment for the Assessment Year 2017-18.
Critically, this notice did not have a DIN mentioned on it, which is a mandatory requirement.
Based on this notice, the AO passed a reassessment order under section 147, making an addition for unexplained moneys under section 69A.
The assessee challenged the validity of the entire proceeding, arguing that the foundational notice was invalid due to the missing DIN.
The revenue department’s attempt to later suggest that the notice should be deemed to have a DIN was rejected by the court.

Decision

The court ruled in favour of the assessee.

It held that any communication issued by the revenue department without a DIN is invalid and non-est (void from the beginning and to be treated as if it never existed).
The court clarified that a subsequent communication cannot retroactively cure this fundamental defect.
Since the foundational notice under section 148 was invalid, the entire reassessment order resting upon it was also quashed.

Key Takeaways

DIN is Mandatory: The requirement of quoting a DIN on official communications is a crucial procedural safeguard, not a mere formality. Its absence is a fatal flaw.
Defect is Incurable: A notice that is born invalid due to a missing DIN cannot be revived or validated by a subsequent communication.
The Foundation Must Be Valid: The legality of an entire assessment proceeding hinges on the validity of its initiating notice. If the notice (the foundation) is invalid, the entire proceeding (the structure) collapses.
Enhances Transparency: This rule is designed to enhance transparency and accountability, preventing the potential issuance of unauthorized or back-dated notices.

II. On Notice Issued by Jurisdictional AO under Faceless Scheme

Notice Issued by Jurisdictional AO Held Invalid; Reassessment Quashed as it Violated Faceless Scheme Notification.

Issue

Is a notice under section 148 of the Income-tax Act, 1961, valid if it is issued by a jurisdictional Assessing Officer after the date on which a CBDT notification mandated that such notices must be issued by a faceless Assessing Officer?

Facts

The Central Board of Direct Taxes (CBDT), using its powers under section 151A, issued a notification on March 29, 2022. This notification directed that all reassessment notices under section 148 must be issued through the faceless assessment mechanism.
Despite this clear mandate, a jurisdictional Assessing Officer (JAO) issued a notice under section 148 to the assessee on March 31, 2022.
The assessee challenged the notice’s validity, arguing it was issued by an officer who no longer had the legal authority or jurisdiction to do so.

Decision

The court ruled in favour of the assessee.

It held that following the CBDT notification dated March 29, 2022, only a faceless Assessing Officer had the authority to issue notices under section 148.
Therefore, the notice issued by the jurisdictional Assessing Officer on March 31, 2022, was invalid and without jurisdiction.
As a result, the assessment order, which was based entirely on this invalid notice, was also quashed.

Key Takeaways

Jurisdiction is Non-Negotiable: A notice or order passed by an officer who lacks proper jurisdiction is void ab initio (invalid from the very beginning).
CBDT Notifications are Law: Notifications issued by the CBDT under statutory authority have the force of law and are binding on all income tax authorities.
Faceless Regime is Mandatory: Once a process is officially moved to the faceless scheme from a specific date, the old system becomes obsolete for that process. Any action taken under the old system is legally invalid.
Timing is Everything: The notice was issued just two days after the new rule came into effect, but this was sufficient to render it and all subsequent proceedings invalid.

IN THE ITAT CHENNAI BENCH ‘D’

Ekambaram Elumalai

Income-tax Officer

Manu Kumar Giri, Judicial Member
and AMITABH SHUKLA, Accountant Member

IT Appeal No.1799 (Chny) of 2025
[Assessment year 2017-18]

SEPTEMBER 3, 2025

S.Sridhar, Adv. for the Appellant. Veeramany K., IRS for the Respondent.

ORDER

Amitabh Shukla, Accountant Member. – This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA / NFAC / S / 250 / 2025-26 / 1076947602(1) dated 12.06.2025 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment year 2017-18. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time.

2.0. At the outset, the Ld.Counsel for the assessee submitted that both the Ld.AO and the Ld.CIT(A) have passed ex-parte orders in its case. It was stated that order u/s. 147 r.w.s. 144B dated 21.03.2023 was passed by the Ld.AO whereby an addition of Rs.8,37,34,295/- was made in its case, inter-alia, invoking prescription of section 69A of the Act. The Ld. Counsel argued that it is assailing the order of Ld.CIT(A) both, on two legal grounds as well as on the merits of the case. The legal grounds have been raised through additional grounds filed under Rule-11 of the ITAT rules. As the legal grounds of the appellant assessee strikes at the very root of the reassessment order u/s. 147 r.w.s. 144B dated 21.03.2023, we deem it appropriate to adjudicate the legal grounds first.

3.0. The first legal ground taken by the assessee is regarding the unavailability of DIN No. on the notice u/s 148 dated 30.07.2022 issued by the Revenue. It was submitted that there was no DIN No. mentioned on the impugned notice u/s 148 dated 30.07.2022. The Ld.Counsel for the assessee has submitted that it is trite law that quoting of DIN No. is mandatory by the Revenue authority and that its non-availability in any notice or order shall make the same invalid, illegal and infructuous. Reference was invited to CBDT Circular No.19 / 2019 dated 14.08.2019 stipulating that quoting of DIN No. is compulsory and that non-availability thereof would make the communication invalid and non est. In support of its contentions, the Ld.Counsel for the assessee invited our attention to the impugned notice u/s 148 which has been placed in the voluminous paper book filed by the assessee.

3.1. The Ld.DR contested the arguments of the assessee stating that the same are not correct. It was argued that notice u/s 148 dated 30.07.2022 was followed by a letter of even date where it was stated that notice u/s 148 dated 30.07.2022 is deemed to be having DIN No.ITBA / AST / M / 148_1 / 2022-23 / 1044351961(1). Thus, compliance to mandate in circular supra was stated to have been made.

3.2. We have heard rival submissions in the light of material available on records. It is an admitted fact on records that the notice u/s. 148 dated 30.07.2022, upon which the assessment order u/s 147 r.w.s. 144 dated 21.03.2023 is resting, was issued without quoting any DIN number. It is also undisputed fact on records that w.r.t CBDT Circular No.19 / 2019 dated 14.08.2019, any communication issued by Revenue without DIN number shall be invalid and non-est. The argument of Revenue regarding the additional communication dated 30/7/22 suggesting that the notice u/s 148 shall be deemed to have DIN No.ITBA / AST / M / 148_1 / 2022-23 / 1044351961(1) is inconsequential. Law mandates quoting of DIN number on document per se. Subsequent, clarificatory communications cannot rescue the Revenue. Accordingly, we are of the considered view that in the absence of a DIN number upon notice u/s 148 dated 30/07/2022, the same becomes invalid, non est and hence infructuous. It is also trite law that when the foundation (in this case notice u/s 148) goes, the super structure (in this case assessment order u/s 147 dated 21.03.2023) would also collapses. Thus, the legal ground raised by the assessee qua non-availability of DIN number upon notice u/s 148 dated 30/07/2022 stands allowed.

4.0. Another legal ground raised by the assessee, through its additional ground is regarding the insufficiency of jurisdiction with the Ld. Jurisdictional Assessing Officer to have issued the notice u/s 148 dated 30.07.2022 which forms the basis for the reassessment order u/s. 147 r.w.s. 144B dated 21.03.2023. It is the case of the Ld.Counsel for the assessee that as per section 151A of the Act r.w. notification dated 29.03.2022 of Central Board of Direct Taxes, reassessment notice u/s 148 was to be issued by the faceless assessing officer and that issuance of the same by the jurisdictional assessing officer u/s 148 dated 30.07.2022 was unwarranted and not in conformity with statutory conditions governing the matter. It was urged that consequent to notification dated 29^th March 2022 issued by the Central Board of Direct Taxes, reassessment u/s 148 can be issued by a faceless assessing officer only. It was urged that in the present case as the notice u/s 148 dated 30.07.2022 was issued by the jurisdictional assessing officer the same was invalid and consequently the assessment order u/s 147 r.w.s. 144B dated 21.03.2023 also became an order to be deemed as void ab initio. In support of its contentions, the Ld.Counsel for the assessee placed heavy reliance upon the decision of the Hon’ble Madras High Court dated 24.06.2025 in the batch of writ petitions bearing no.22402 of 2024.

5.0. Per contra, the Ld.DR relied upon the order of lower authorities. It was argued that the decision of Hon’ble Bombay High Court in the case of Hexaware Technologies Limited which is the basis of impugned decision of the Hon’ble Madras High Court dated 24.06.2025 (supra) has been contested by the Revenue before the Hon’ble Apex Court and hence no reliance can be placed.

6.0. We have heard rival submissions in the light of material available on records. It is an admitted fact on records that the notice u/s. 148 dated 30.07.2022, upon which the assessment order u/s 147 r.w.s. 144B dated 21.03.2022 is resting, was issued by the jurisdictional assessing officer and not the faceless assessing officer. We have noted the following provisions of section 151A of the Act:-

“…[Faceless assessment of income escaping assessment. ⁹⁷

151A. (1) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of assessment, reassessment or re-computation under section 147 or issuance of notice under section 148⁹⁸[or conducting of enquiries or issuance of show-cause notice or passing of order under section 148A] or sanction for issue of such notice under section 151, so as to impart greater efficiency, transparency and accountability by-

(a)

eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible;

(b)

optimising utilisation of the resources through economies of scale and functional specialisation;

(c)

introducing a team-based assessment, reassessment, re-computation or issuance or sanction of notice with dynamic jurisdiction.

(2) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:

Provided that no direction shall be issued after the 31st day of March, 2022.

(3) Every notification issued under sub-section (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.].”

The legal prescription thus mandated is that post issuance of notification by the central government, notices u/s. 148 shall be issued by faceless assessing officers.

7.0. We have noted that the Central Board of Direct Taxes has passed a notification dated 29.03.2022 stipulating as under:-

“. NOTIFICATION

New Delhi, the 29th March, 2022

S.O. 1466(E).—In exercise of the powers conferred by sub-sections (1) and (2) of section 151A of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme, namely:-

1. Short title and commencement.—(1) This Scheme may be called the e-Assessment of Income Escaping Assessment Scheme, 2022.

(2) It shall come into force with effect from the date of its publication in the Official Gazette.

2. Definitions.—(1) In this Scheme, unless the context otherwise requires, —

(a) —Act\ means the Income-tax Act, 1961 (43 of 1961);

(b) —automated allocation means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources.

(2) Words and expressions used herein and not defined, but defined in the Act, shall have the meaning respectively assigned to them in the Act.

3. Scope of the Scheme.—For the purpose of this Scheme,—

(a) assessment, reassessment or recomputation under section 147 of the Act,

(b) issuance of notice under section 148 of the Act, shall be through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in section 148 of the Act for issuance of notice, and in a faceless manner, to the extent provided in section 144B of the Act with reference to making assessment or reassessment of total income or loss of assessee.

[Notification No. 18/2022/F. No. 370142/16/2022-TPL(Part1]

SHEFALI SINGH, Under Secy.”

Thus through the above notification the Central Government has mandated that w.e.f. 29^th March 2022 all the notices u/s 148 of the Act shall be through automated allocation and in a faceless manner for initiating any reassessment of income. It thus alludes that notice u/s 148 shall be issued by a faceless assessing officer.

8.0. We have also noted the decision of Hon’ble Bombay High court in the case of Hexaware Technologies Limited dated 03.05.2024 in Hexaware Technologies Ltd. v. Assistant Commissioner of Income-tax 464 ITR 430 (Bombay)/WP No.1778 of 2023. The Hon’ble court’s decision was, inter alia, based on the newly introduced faceless assessment scheme, established under Section 151A of the Act which mandated that reassessment notices be issued through automated allocation and in a faceless manner, thereby eliminating direct interaction between the taxpayer and the tax authorities. The court interpreted this to mean that the authority to issue reassessment notices under the faceless assessment scheme rests solely with the FAO, not the JAO. The Hon’ble Bombay High Court held the view that allowing concurrent jurisdiction would lead to chaos and undermine the purpose of the faceless assessment scheme. It clarified that the scheme’s automated allocation process randomly assigns cases to assessing officers, and in this case, the JAO was not the designated officer. Therefore, the reassessment notice issued by the JAO was deemed invalid and quashed. The Revenue had argued that both the Jurisdictional Assessing Officer (JAO) and the Faceless Assessing Officer (FAO) had concurrent jurisdiction in issuing such notices. However, the Hon’ble Bombay High Court disagreed, ruling that the JAO lacked the authority to issue the reassessment notice in this specific instance. While doing so the Hon’ble High Court had distinguished the order of the Hon’ble Calcutta High Court.

9.0. We have also noted with reverence the decision of Hon’ble Madras High Court dated 24.06.2025 in WP No.22402. In the impugned decision the Hon’ble High Court has held as under:-

“…..2. Learned Single Judge in order dated 20.12.2024 in WP Nos.25223 of 2024 held that it does not matter if the Jurisdictional Assessing Officer (JAO) issues the notice and it is not mandatory that it should be issued by the Faceless Assessment Officer (FAO). Another learned Single Judge in order dated 21.04.2025 in WP No.22402 of 2024 and batch cases, followed what was held by the Bombay High Court in Hexaware Technologies Ltd v. Assistant Commissioner of Income Taxi; and opined that it was mandatory for the FAO to issue notice and issuance of notice by JAO would make the notice invalid.

3. Learned Single Judge thereafter directed the matter to be placed before the Chief Justice for constituting a Division Bench to consider the divergent views. It is, therefore, all these matters were listed before us today.

4. We follow the law as laid down in Hexaware Technologies Ltd (supra), the said judgment was authored by one of us (Chief Justice), that it is mandatory for the FAO to issue the concerned notices and issuance thereof by the JAO would make the notice invalid.

5. Counsels for assessees are ad idem that the law as laid down in Hexaware Technologies Ltd (supra) will apply. Learned Additional SolicitorGeneral, however, submits that the Revenue does not accept the law as laid down in Hexaware Technologies Ltd (supra); and that there is a special leave petition filed against the order and judgment in Hexaware Technologies Ltd (supra) and the same is expected to be taken up after the Supreme Court reopens.

6. Admittedly, learned Additional Solicitor-General, in fairness, states that there is no stay. Therefore, the law as laid down by Hexaware Technologies Ltd (supra) applies.

7. It is clarified that if the Apex Court reverses the judgment of Hexaware Technologies Ltd (supra), parties will be governed by the decision of the Apex Court.

8. Keeping open all rights and contentions of parties, including liberty to apply to this Court, in case the Revenue succeeds before the Apex Court, for revival of these petitions, the notices issued in these petitions are quashed and set aside.”

10.0. It is seen that the Hon’ble Madras High Court has through its aforesaid order reaffirmed the decision of Hon’ble Bombay High Court in the case of Hexaware Technologies Limited ruling that post 29.03.2022 i.e after issuance of CBDT notification, notices u/s 148 deserved to be issued by faceless assessing officer only. It goes on to indicate that any notices issued by any jurisdictional assessing officer shall be invalid. Consequently, any assessment order which is resting on any such notice shall also be invalid and void ab initio. We have noted that in the present case the notice u/s 148 was issued on 31.03.2022 by the jurisdictional assessing officer and that the assessment order u/s 147 dated 27.03.2022 is resting upon the same. In respectful compliance to the decision of the Hon’ble Madras High Court (supra) it is held that notice u/s 148 issued on 31.03.2022 by the jurisdictional assessing officer is an invalid notice and same is therefore quashed. It is trite law that once foundation goes the superstructure is bound to collapse. Accordingly, in the present case the assessment order u/s 147 dated 21.03.2022 shall also not survive. We therefore set aside the order of the lower authorities. The second legal ground of appeal raised by the assessee through additional ground regarding insufficiency of jurisdiction of the assessing officer to have issued notice u/s 148 is also therefore allowed.

11.0. We have however also noted that the Hon’ble Madras High Court in their impugned decision, in para 7 ruled that “.It is clarified that if the Apex Court reverses the judgment of Hexaware Technologies Ltd (supra), parties will be governed by the decision of the Apex Court.” and therefore this order is also subject to the decision of Hon’ble Apex court in response to revenue’s appeal in the case of Hexaware Technologies (supra).

12.0. As the assessee has succeeded in terms of its twin legal grounds of appeal, all other grounds of appeal contesting the merits of the addition have become academic in nature and hence kept open.

13.0. In the result, the appeal of the assessee is allowed.