Jurisdiction of Section 148 Notices in the Faceless Era
1. The Core Dispute: Physical vs. Faceless Reopening
The central issue is whether a Jurisdictional Assessing Officer (JAO)—the traditional local officer—retains the power to issue a reassessment notice under Section 148 after the introduction of the Faceless Assessment Scheme.
Taxpayer’s Stand: Argued that once the “e-Assessment of Income Escaping Assessment Scheme, 2022” was notified on March 29, 2022, all notices under Section 148 must be issued through automated allocation in a faceless manner. A notice issued by a JAO violates Section 151A and is, therefore, void.
Revenue’s Stand: Claimed that the JAO and the Faceless Assessing Officer (FAO) hold concurrent jurisdiction. They argued that the faceless scheme is merely procedural and does not divest the local officer of their statutory powers.
2. Legal Analysis: The Mandatory Nature of Section 151A
The courts favoring the assessee (notably the Bombay and Punjab & Haryana High Courts) have highlighted the following:
I. Statutory Overhaul
Section 151A was specifically inserted to allow the government to notify a scheme for “assessment, reassessment, or recomputation” and “issuance of notice under Section 148” in a faceless manner.
The Ruling: The use of the word “shall” in the 2022 Scheme implies that the faceless procedure is not optional. Once a specific authority and method (automated allocation) are designated, all other authorities (JAOs) are effectively divested of that specific power.
II. Elimination of Personal Interface
The primary objective of Section 144B and the faceless regime is to eliminate the physical interface between the taxpayer and the tax department to ensure transparency and efficiency.
Jurisdictional Error: If a JAO issues a notice directly, it defeats the “faceless” requirement of the law. This is considered a fundamental jurisdictional defect that cannot be cured under Section 292B (which only covers minor technical errors).
3. Final Verdict: Notice Quashed
The courts in these jurisdictions have consistently held that reassessment proceedings initiated by a JAO post-March 2022 are null and void ab initio.
Result: The Section 148 notice and all consequential proceedings (including final assessment orders) are liable to be set aside.
Divergence: It is important to note that the Delhi High Court has taken a contrary view (T.K.S. Builders), holding that JAOs still possess concurrent jurisdiction. This conflict is currently pending before the Supreme Court.
Key Takeaways for Taxpayers
Check the Source: If your reopening notice (Section 148) or the preliminary order (Section 148A(d)) originates from a local Ward/Circle officer rather than the “Assessment Unit” or “National Faceless Assessment Centre,” it may be jurisdictionally flawed.
Vigilance in Litigation: Taxpayers in the Bombay, Punjab & Haryana, and Telangana jurisdictions have a strong precedent to challenge such notices through Writ Petitions in the High Court.
The 2026 Retrospective Amendment: Be aware that recent legislative updates (Budget 2026) have attempted to retrospectively validate JAO-issued notices from April 1, 2021. However, the validity of such retrospective “cures” for jurisdictional defects is often subject to further judicial scrutiny.