Reassessment Quashed: JAO Lacks Jurisdiction to Issue Section 148 Notice Post-Faceless Notification

By | November 20, 2025
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Reassessment Quashed: JAO Lacks Jurisdiction to Issue Section 148 Notice Post-Faceless Notification

Issue

Whether a notice under Section 148 issued by the Jurisdictional Assessing Officer (JAO) on or after 04.07.2022 is valid in law, considering the mandate of Section 151A read with Notification No. 18/2022 dated 29.03.2022, which prescribes that such proceedings be conducted by a Faceless Assessing Officer (FAO).

Facts

  • Assessment Year: 2018-19.

  • The Notice: The Jurisdictional Assessing Officer (JAO) issued a notice under Section 148 to the assessee on 04.07.2022.

  • The Order: The JAO proceeded to complete the reassessment under Section 147 and passed a final assessment order on 27.09.2023.

  • The Challenge: The assessee filed a writ petition challenging the validity of the notice and the order.

  • Legal Context: The Central Government had issued Notification No. 18/2022 on 29.03.2022, invoking powers under Section 151A to bring the issuance of notices under Section 148 within the ambit of the Faceless Assessment Scheme.

Decision

  • The High Court ruled decisively in favour of the assessee.

  • Reliance on Precedent: The court relied on the binding judgment of the Karnataka High Court in Ramachandra Reddy Ravi Kumar v. Dy. CIT [2025], which had settled this exact issue.

  • Lack of Jurisdiction: It was held that post the issuance of Notification No. 18/2022 on 29.03.2022, the Jurisdictional Assessing Officer (JAO) has been divested of the power to issue notices under Section 148.

  • Mandatory Faceless Procedure: The power to issue such notices is exclusively vested in the Faceless Authority.

  • Outcome: Since the impugned notice was issued by the JAO (who lacked jurisdiction), the notice and the subsequent assessment order were quashed and set aside.

Key Takeaways

  • The Cut-Off Date: March 29, 2022 is the critical date. Any reassessment notice issued under Section 148 by a local/jurisdictional officer after this date is legally unsustainable in jurisdictions following this rationale.

  • Jurisdictional Defect: Issuing a notice through the wrong authority (JAO instead of FAO) is a fundamental jurisdictional error that renders the entire proceeding void ab initio. It is not a curable procedural defect.

  • Supremacy of Section 151A: The Faceless Assessment Scheme notified under Section 151A overrides the general jurisdiction of the Assessing Officer, mandating automated, randomized allocation of cases.

HIGH COURT OF KARNATAKA
Shankaranarayana Constructions (P.) Ltd.
v.
Assistant Commissioner of Income-tax, Bengaluru *
S.R.Krishna Kumar, J.
WRIT PETITION NO. 31662 OF 2025 (T-IT)
OCTOBER  23, 2025
A. Shankar, Sr. Counsel and Venkatesh, Adv. for the Petitioner. M. Dilip, Adv. for the Respondent.
ORDER
1. In this Petition, petitioner seeks the following reliefs:
” Wherefore it is prayed that this Hon’ble Court be pleased to:
(a)Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the assessment order dated 27.09.2023 passed under section 147 of the Income Tax Act, 1961 for the Assessment Year 2018-19 by the Respondent No.1 bearing DIN & Order No. ITBA/AST/S/147/2023-24/1056652389(1) herein marked as Annexure – A1.
(b)Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the computation sheet dated 27.09.2023 for the Assessment Year 2018-19 issued by the Respondent No.1 bearing DIN & Document No. ITBA/AST/5/186/2023-24/1056652443(1) herein marked as Annexure – A2.
(c)Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice of demand dated 27.09.2023 issued under section 156 of the Income Tax Act, 1961 for the Assessment Year 2018-19 by the Respondent No.1 bearing DIN & Notice No. 1764/A51/5/156/2023-24/1056652450(1) herein marked as Annexure A3.
(d)Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the penalty notice dated 29.09.2023 issued under section 274 r.w.s. 270A of the Income Tax Act, 1961 for the Assessment Year 2018-19 by the Respondent No.1 bearing 1056654019(1) herein marked as Annexure – A4. DIN NO. ITBA/pNL/5/270H/1423-24/
(e)Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice dated 04.07.2022 issued under section 148 of the Income Tax Act, 1961 for the assessment year 2018-19 by the Respondent No.1 bearing DIN & Notice No. ITBA/AST/S/148_1/2022-23/1043723408(1) marked as Annexure – B. herein
(f)Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the appellate order dated 28.02.2025 passed under section 250 of the Income Tax Act, 1961 for the assessment year 2018-19 by the Respondent No.3 bearing DIN No. ITBA/APL/M/250/2024-25/1073648516(1) herein marked as Annexure – C.
(g)Issuing appropriate directions to the Income Tax Appellate Tribunal, Bangalore Bench, Bengaluru in relation to the appeal pending before it in ITA No. 1272/Bang/2025 for the A.Y. 2018-19.
(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 Senior 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 Senior Counsel for the petitioner submitted that pursuant to the impugned notice under section 148 of the Income Tax Act, 1961 at Annexure – B dated 04.07.2022, the respondent No.1 completed the assessment proceedings and passed the Assessment Order dated 27.09.2023 determining the total income of the petitioner as Rs.155,05,33,950/-.
4. Aggrieved by the said Assessment Order, the petitioner has preferred an appeal before the third respondent – appellate authority which dismissed the appeal vide final order dated 28.02.2025. Aggrieved by the same, the petitioner has approached the Income Tax Appellate Tribunal, Bengaluru Bench, Shankaranarayana Constructions (P.) Ltd. v. ACIT, Central [IT Appeal No.1272/BANG/2025], which is pending adjudication.
5. Meanwhile, decision of a Co-ordinate Bench of this Court in the case of Ramachandra Reddy Ravi Kumar v. Dy. CIT   (Karnataka)/W.P. No. 17352/2022 and connected matters – dated 28.08.2025, has disposed of the petitions quashing the show cause notice on the ground that the Assessing Officer did not have jurisdiction to issue the notice under section 148 of the Act in the light of Section 151A of the Income Tax Act, 1961 and the Notification pursuant thereto which provided for issuance of notice only by the faceless authority of the respondent. It is therefore submitted that the impugned notice under section 148 of the Act and assessment orders, etc., may be set aside and the present petition be disposed of in terms of the said order. It is also submitted that the necessary directions may be issued to the ITAT to dispose of the Appeal in ITA No.1272/BANG/2025, as having become academic/infructuous reserving liberty in favour of the petitioner to seek revival/restoration of the appeal if the occasion so arises.
6. Per contra, learned counsel for the respondent -Revenue submits that there is no merit in the petition and the same is liable to be dismissed.
7. A perusal of the material on record will indicate that in Ramachandra Reddy Ravi Kumar’s case supra, a Coordinate Bench of this Court has held 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.”
The aforesaid order passed by a Coordinate Bench of this Court is applicable to the facts of the present case which also deserves to be disposed of in terms of the said judgment.
8. In addition thereto, Hon’ble High Court of Telanagana in the case of Mpr Projects Ltd. v. Assessment Unit [W.P. No. 23491/2025] and connected matters dated 16.10.2025 has held as under:
“COMMON ORDER:
Sri Dundu Manmohan, Sri P. Soma Shekar Reddy, Sri A.V. Raghu Ram, Sri P. Soma Shekar Reddy, learned counsel representing Sri P. Srikanth Rao and Sri P. Pavan Kumar Rao, Sri V.V.S. Ankith, learned counsel representing Sri A.V.K.Suryavara Prasad, Sri Gajanand Chakravarthi, learned counsel representing Sri Upadhyay Raghavender, Sri A.V.S. Siva Kartikeya, Sri Karan Talwar, Sri D.V. Pushpa Vardhan, learned counsel representing Sri T. Chaitanya Kumar, Ms. Syeda Sajida Samreen Fathima, learned counsel representing Sri Akshay Mantri, Sri P. Venkata Prasad, learned counsel representing Ms. V. Gayatri Priya, Ms. Pragathi Mandapalle, learned counsel representing Ms. Sneha Asthana, Ms. N. Arthi, Ms. P. Praneetha Sri, learned counsel representing Ms. Sheetal Srikanth, Sri Yash Jain, learned counsel representing Sri M. Pranav, Sri S.P. Chidambaram, learned counsel representing Sri. Naga Deepak, Ms. Hema Jaiswal, Ms. P.K. Kalyani, learned counsel representing Sri Amancharla V Gopala Rao, Ms. Akruti Agarwal, Sri. Kirath Singh, learned counsel representing Ms. K. Kruthi, Sri T. Pradyoth, Sri Shriraj Manyam, learned counsel representing M/s. R.S. Associates, and Sri P.S.S. Kailash Nath, learned counsel for the petitioners.
Ms. B. Sapna Reddy, Ms. J. Sunitha, Sri A. Sudhakar Reddy and Sri N. Praveen Reddy, learned Senior Standing Counsel appears for the Income Tax Department.
2. In all these writ petitions the challenge is to the initiation of proceedings under Sections 148(A) and 148 of the Income Tax Act, 1961 (for short, “the Act”) by the Jurisdictional Assessing Officer (JAO).
3. Petitioners though have taken other pleas in most of these writ petitions, but they submit that the issues involved in the present batch of writ petitions have been considered and settled by the judgment rendered by the learned coordinate Bench of this Court in W.P.No.26304 of 2024 vide order dated 28.04.2025 following the decision rendered in the case of Kankanala Ravindra Reddy v. Income Tax Officer1. It is submitted that the present writ petitions may be disposed of on same lines after setting aside the impugned proceedings under Sections 148(A) and 148 of the Act and on similar terms as are set out in the case of Kankanala Ravindra Reddy (supra) and also in W.P.No.26304 of 2024, dated 28.04.2025.
4. In support of the submissions made by the learned counsel for the petitioners, they relied on the judgments of the Bombay High Court in Hexaware Technologies Ltd., v. Assistant Commissioner of Income Tax and others2, Abhin Anilkumar Sah v. Income Tax Officer (International Taxation) and others3, Bank of India v. Assistant Commissioner of Income Tax and others; judgment of Gauhati High Court in Ram Narayan Sah v. Union of India and others, judgment of Punjab and Haryana High Court in Jatinder Singh Bhangu v. Union of India and others, judgments of Telangana High Court in Venkataramana Reddy Patloola v. Deputy Commissioner of Income Tax and others, Shaik Sajid v. Assessment Unit, Income Tax Department and others, Kings Pride Infra Projects (P) Ltd., v. Deputy Commissioner of Income Tax, Satyaprakash Chigurupati v. The Assistant Commissioner of Income Tax, Ward 6(1), Hyderabad 10 and Deloitte Consulting India (P) Ltd., v. Assessment Unit, Income Tax Department, judgment of Himachal Pradesh High Court in Govind Singh v. Income Tax Officer, judgment of Gujarat High Court in Mansukhbhai Dahyabhai Radadiya v. Income Tax Officer, Ward 3(3)(5)13, judgment of Jharkhand High Court in ShyamSunder Saw v. Union of India and others, judgment of Calcutta High Court in Giridhar Gopal Dalmis v. Union of India and others’, judgments of Madras High Court in TVS Credit Services Ltd., v. Deputy Commissioner of Income Taxis and Mark Studio India Pvt., Ltd., v. Income Tax Officer and another, judgments of Rajasthan High Court in Sharda Devi Chhajer v. Income Tax Officer and another and Shree Cement Ltd., v. Assistant Commissioner of Income Taxes, and judgment of Karnataka High Court in Ramchandra Reddy Ravi Kumar v. Deputy Commissioner of Income Tax.
5. These matters have been clubbed together for the reason that all of them assail the proceedings initiated under Section 148(A) followed by notice under Section 148 of the Act for reopening the assessment by the JAO. The dates of the impugned notices and proceedings have been referred to in the individual writ petitions, which are post 29.03.2022 i.e., the date on which the Central Government in exercise of the powers conferred under Section 151A of the Act has made the e-Assessment of Income Escaping Assessment Scheme, 2002 vide Notification No. 18 of 2022.
6 The respondent Department was asked to obtain instructions and file counter affidavit, if necessary, on facts and legal issues raised herein. Counter affidavit 7. Learned counsel for the respondent Department has obtained instructions in all these matters. has also been filed in more than 70 matters. Based upon the instructions received from the Department, learned counsel for the respondents do not dispute that the initiation of impugned proceedings under Section 148(A) of the Act has been done by the JAO after coming into force of the faceless scheme with effect from 29.03.2022.
8. Learned counsel for the respondents have also not been able to dispute that the legal issue as regards the jurisdiction of the JAO to initiate proceedings instead of Faceless Assessing Officer (FAO) have been well settled by the coordinate Bench of this Court in W.P.No.26304 of 2024 followed in several other judgments.
9. Learned counsel for the respondents also do not dispute that a number of other jurisdictional High Courts have also taken the same view. However, they submit that a contrary view has been taken in the following decisions as well. in support of their submissions, they relied upon the judgment of the Bombay High Court in Caishen Enterprise LLP v. Assistant Commissioner, judgments of Madras High Court in Mark Studio India (P) Ltd., v. Income Tax Officer and Perur Builders (P) Ltd., v. Income Tax Officers, judgment of Gujarat High Court in Talati and Talati LLP v. Assistant Commissioner of Income Tax and judgment of Delhi High Court in T.K.S. Builders (P) Ltd., v. Income Tax Officer.
10. Learned counsel for the respondents submit that SLP(C).No.027736 of 2023 and batch challenging the orders passed by this Court and other jurisdictional High Courts are pending before the Hon’ble Supreme Court, but no stay of the impugned judgments has been granted in favour of the revenue.
11. We have considered the submissions of the learned counsel for the parties and also the relevant factual assertion made by the petitioners that the impugned proceedings have been initiated by the JAO after coming into force of the Faceless Scheme with effect from 29.03.2022. The relevant details concerning individual petitioners are appended to this order and shall be treated as part of the order. They indicate the relevant assessment year, the date of notice issued under Section 148A of the Act, the date of the order under Section 148 of the Act, the date of sanction under Section 151 of the Act. intimation to proceed with assessment under Section 144B of the Act in some cases, the date of assessment order in some of the cases as against the individual writ petitions referred to in Column No. 1.
12. From a perusal of the tabulation chart it is apparent that the impugned proceedings in all these cases have been initiated by JAO after coming into force of the Faceless Scheme with effect from 29.03.2022.
13. The legal issue as regards the lack of jurisdiction on the part of JAO to initiate the proceedings post implementation of the Faceless Scheme is no longer res integra as it has been held in the case of Kankanala Ravindra Reddy (supra) and by other jurisdictional High Courts.
14. As a matter of fact, several orders following the ratio rendered in the above cases have been passed one after the other. Therefore, we are of the considered view that the present batch of writ petitions also stand covered by the decision rendered by this Court in the case of Kankanala Ravindra Reddy (supra). The relevant extract of the order dated 28.04.2025 passed in W.P.No.26304 of 2024 is reproduced hereunder:

“15. What is worrying this Bench more is the fact that an endeavour is being made whole heartedly to ensure not to generate further litigation on issues which have been laid to rest by a large number of High Courts all of whom have taken a consistent stand that the action of the Income Tax Department being violative of the Finance Act, 2020 and Finance Act, 2021. Now, in order to protect the interest of the Revenue as also that of the assessee, it would be trite at this juncture, if we dispose of the writ petition with an observation/direction that the disposal of the instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanala Ravindra Reddy v. Income Tax Officer (Telangana)) shall however be subject to the outcome of the SLPs which were filed by the Income Tax Department and which is pending consideration before the Hon’ble Supreme Court.

17. So far as the interest of the Revenue is concerned, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs reference, is reproduced hereunder: been considered and protected, as has been observed in 36, 37 and 38 of the order which, for ready reference, is reproduced hereunder:

36. For all the aforesaid reasons, the the impugned notices issued and the proceedings drawn by the neither tenable nor For all the aforesaid reason the respondent-Department is cable. The notices issued and the procedure depend being per se illegal, deserves to be and are accordingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under Sections 147 and 148 would also get quashed and it is ordered accordingly. The mason we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically

37. The preliminary objection raised by the petitioner is sustained and all these writ petitions stands allowed in this very jurisdictional issue. Since the impugned notices and orders are getting quashed on the point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings.

38. Since the Hon’ble Supreme Court had, in the case of Ashish Agarwal, supra, [Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC)], as a one-time measure exercising the powers under Article 142 of the Constitution of India, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra.

18. We would only further like to make observations that since we are inclined to dispose of the instant writ petition, conscious of the fact that the earlier order of this High Court in the case of Kanakala Ravindra Reddy (1 supra) is subjected to challenge before the Hon’ble Supreme Court in SLP No.3574 of 2024, preferred by the Income Tax Department, we make it clear that allowing of the instant writ petition is subject to outcome of the aforesaid SLP preferred by the Revenue against the decision of this High Court in the case of Kanakala Ravindra Reddy (1 supra). This, in other words, would mean that either of the parties, if they so want, may move an appropriate petition seeking revival of this writ petition in the light of the decision ofthe Hon’ble Supreme Court in the pending SLP on the very same issue.

19 Accordingly, the instant writ perition stands allowed in favour of the assensee so far as the issue of jurisdiction is concerned. As a consequence, the impugned notice under challenge under Sections 148-A 148-A and 148 stands set anide/quashed. The consequential orders, if any, also stand set aside/quashed in similar terme as have been passed by this High Court in the case of Kankanala Ravindra Reddy (1 supra). There shall be no order as to costs.”

15. The impugned proceedings under Sections 148A and 148 of the Act assailed in these writ petitions are set aside. The consequential orders, if any, also stand set aside on similar terms as held in the case of Kankanala Ravindra Reddy (supra). The revenue is also granted liberty in the same terms as at para 18 of the above quoted orders.
16. Accordingly, the writ petitions are disposed of. No order as to costs. Miscellaneous applications pending, if any, shall stand closed.”
9. In view of the aforesaid facts and circumstances, the present petition deserves to be allowed and disposed of in terms of Ramachandra Reddy Ravi Kumar (supra) and connected matters – dated 28.08.2025 and also by issuing necessary directions to the ITAT to close the appeal by reserving liberty in favour of the both the parties to seek revival/restoration of the said appeal if the occasion so arises.
10. 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 notices and consequential orders, notices etc., at Annexures- A1, A2, A3, A4, B and C dated 27.09.2023, 27.09.2023, 27.09.2023, 29.09.2023, 04.07.2022 and 28.02.2025, respectively are hereby quashed.
iii.The Income Tax Appellate Tribunal is directed to disposed of ITA No.1272/BANG/2025 as having rendered academic/infructuous by reserving liberty in favour of both petitioner and respondents to seek revival/restoration if the occasion so arises.
iv.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.
v.It is needless to state that in the event the present petition stands revived as stated supra, after disposal of the petition before the Apex Court, all contentions urged by both the sides are kept open including the contention of the petitioner as regards validity of the search, seizure and inspection proceedings conducted by the respondents.