Reassessment Notice Issued by Jurisdictional Assessing Officer Under Faceless Regime Quashed for Lacking Jurisdiction
Issue
Whether, under the faceless assessment regime governed by Sections 147, 148, 144B, 151A, and 132 of the Income-tax Act, 1961, a notice issued under Section 148 by a Jurisdictional Assessing Officer (JAO)—even if based on search and seizure information and approved by the specified authority—is legally sustainable.
Facts
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The tax authority initiated reassessment proceedings against the assessee following a search and seizure operation under Section 132.
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The Jurisdictional Assessing Officer (JAO) issued a reassessment notice under Section 148 to the assessee after obtaining prior approval from the specified authority.
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The notice was issued directly by the JAO rather than through the automated, centralized faceless allocation mechanism established under the faceless assessment regime (Section 151A read with Section 144B).
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The assessee challenged the validity of the notice on the ground that the JAO lacked territorial jurisdiction to issue Section 148 notices directly under the statutory faceless scheme.
Decision
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Lack of Jurisdiction: In favour of Assessee. Under the faceless assessment regime, the power of a Jurisdictional Assessing Officer to directly issue reassessment notices under Section 148 stands excluded, even in cases originating from search and seizure operations. [Para 2]
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Quashing of Notice: In favour of Assessee. The impugned notice issued under Section 148 by the JAO was declared legally unsustainable and accordingly quashed. [Para 2]
Key Takeaways
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Exclusivity of Faceless Scheme: Post-implementation of Section 151A, statutory notices under Section 148 must be issued strictly through the automated faceless system rather than by individual Jurisdictional Assessing Officers.
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Search Cases Not Exempted from Faceless Mechanics: The presence of search and seizure information or approval from specified authorities does not override or bypass the statutory requirement to route Section 148 notices through the faceless mechanism.
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Fatal Jurisdictional Defect: Reassessment notices issued by a JAO in violation of the faceless framework suffer from an incurable jurisdictional defect, rendering the entire reassessment proceeding void ab initio.
HIGH COURT OF PUNJAB & HARYANA
Principal Commissioner of Income-tax
v.
Surender Singh Deswal*
Deepak Sibal and Sunish Bindlish, JJ.
IT Appeal No. 210 of 2026 (O & M)
SEPTEMBER 18, 2026
Saurabh Kapoor, Sr. Standing Counsel, Rana Gurtej Singh, Jr. Standing counsel and Ms. Muskaan Gupta, Adv. for the Appellant.
JUDGMENT
Deepak Sibal, J.- Through this appeal, the revenue raises the following substantial questions of law:-
| “A. | Whether the Ld. ITAT is legally justified in quashing the notice issued u/s 148 in the case of the assessee by relying on the judgment by Hon’ble High Court in the case of Jatinder Singh Bhangu v. Union of India in CWP No 15745 of 2024 dated 19.07.2024 without adjudicating the question of law raised by the assessee petitioner and specifically in view of facts that question of law raised by the assessee on the issue of jurisdiction for issuance of aforesaid notice and question of law adjudicated by the Hon’ble High court is altogether different? |
| B. | Whether the Hon’ble ITAT failed to exercise jurisdiction lawfully by adjudicating the issue as if the legal position had attained finality, despite the admitted pendency of multiple Special Petitions before the Hon’ble Supreme Court, including Union of India v. Jasjit Singh (SLP (C) No.7399 of 2025) and Union of India v. Jatinder Singh Bhangu (SLP (C) No. 15252 of 2025), thereby rendering the impugned order legally unsustainable? |
| C. | Whether on a correct interpretation of Sections 147, 148, 144B and 151A of the Income Tax Act 1961, the Honble ITAT erred in law in concluding that the issuance of notice under Section 148 by the Jurisdictional Assessing Officer is invalid, despite the absence of any statutory provision expressly divesting the JAO of such jurisdiction, and in disregard of the ratio laid down by the Hon’ble Delhi High Court in T.K.S. Builders (P.) Ltd. holding that Section 144B governs the procedure of faceless assessment and not the assumption of jurisdiction under Section 148? |
| D. | Whether the Hon’ble ITAT erred in law in not applying the settled principle that where two statutory authorities are conferred jurisdiction under the Act, such jurisdiction is concurrent unless expressly excluded, and in overlooking the authoritative pronouncement of the Hon’ble Delhi High Court that the faceless regime is supplementary and not exclusionary of the Jurisdictional Assessing Officer’s powers under Section 148? |
| F. | Whether on the facts and in the circumstances of the case, the Hon’ble ITAT was justified in law in holding that the notice issued under Section 148 of the Income Tax Act, 1961 by the Jurisdictional Assessing Officer was invalid, ignoring the fact that the Jurisdictional Assessing Officer is competent to issue such notice after obtaining the prior approval of the specified authority?” |
2. It is not disputed that through a recent judgment of this Court dated 10.09.2026 in CWP No.15791 of 2024 – Jyoti Sareen v. Union of India and others, all the afore questions have been answered against the revenue.
3. In the light of the above consensus, this appeal is dismissed in the light of the law laid down in Jyoti Sareen’s case (supra).