Reassessment Notice Issued by Jurisdictional Officer

Reassessment Notice Issued by Jurisdictional Officer Non-Facelessly Is Invalid and Lacks Statutory Jurisdiction

Issue

Whether a notice issued under Section 148 by a Jurisdictional Assessing Officer without following the automated allocation mechanism and faceless procedure mandated under Section 151A and the e-Assessment scheme is legally valid.

Facts

Reassessment Proceedings: Reassessment proceedings under Section 148 of the Income-tax Act, 1961 were initiated against the assessee.
Issuance by JAO: The reassessment notice under Section 148 was directly issued by the Jurisdictional Assessing Officer (JAO).
Non-Faceless Manner: The notice was issued manually/locally without utilizing the randomized automated allocation mechanism prescribed under Section 151A and the statutory faceless assessment regime.
Assessee’s Challenge: The assessee challenged the validity of the notice for violating the mandatory faceless scheme governed by Section 151A.

Decision

Lack of Jurisdiction: In favour of Assessee. Issuance of a Section 148 notice by the Jurisdictional Assessing Officer outside the automated, randomized allocation mechanism violates the statutory mandate of Section 151A and the e-Assessment scheme. [Para 2]
Notice Quashed: In favour of Assessee. Following the binding precedent in Jyoti Sareen v. Union of India (Punjab & Haryana), the impugned notice was held to be invalid and without jurisdiction. [Paras 2 and 3]

Key Takeaways

Mandatory Faceless Procedure: After the introduction of Section 151A and the e-Assessment scheme, all notices under Section 148 must be issued through automated, randomized allocation rather than by individual Jurisdictional Assessing Officers.
Jurisdictional Defect: Reassessment notices issued directly by a JAO in deviation from the faceless scheme suffer from a fundamental lack of jurisdiction and are void ab initio.
Precedential Binding: Lower tax authorities are bound to follow established High Court precedents establishing that non-faceless Section 148 notices cannot be sustained.

HIGH COURT OF PUNJAB & HARYANA

Principal Commissioner of Income-tax

Tayal Sons (P.) Ltd.

Deepak Sibal and Sunish Bindlish, JJ.

IT Appeal No. 224 of 2026 (O & M)

SEPTEMBER 18, 2026

Ms. Gauri Neo Rampal, Sr. Standing counsel for the Appellant.

JUDGMENT

Deepak Sibal, J.- Through this appeal, the revenue raises the followingsubstantial questions of law:-

“(a) Whether the Hon’ble ITAT has misinterpreted the term ‘Faceless Manner’ in Assessment of Income Escaping Assessment Scheme, 2022 with ‘Faceless Assessment’ procedure whose application is advent upon filing of return of income upon notice under Section 148 as provided in sub-section (1)(iii) (b) of Section144B w.r.t issuance of notice of Section 148 by Faceless Assessing Officer(FAO)?

(b) Whether the Hon’ble ITAT has misinterpreted the term ‘Faceless Manner in E-Assessment of Income Escaping Assessment Scheme, 2022 solely without considering to the extent provided in Section 144B of the Act in relation to the Explanation of Section 144B of the Act?

(c) Whether the Hon’ble ITAT has wrong interpretated the intention of the legislature w.r.t. the term ‘Faceless Manner’ in EAssessment of Income Escaping Assessment Scheme, 2022 vis-avis ‘Faceless Assessment’ procedure whose application is advent upon filing of return of income upon notice under Section 148 as provided in sub-section (1)(iii)(b) of Section 144B w.r.t. issuance of notice of Section 148 by Faceless Assessing Officer (FAO)?

(d) Whether the Hon’ble ITAT has taken into the consideration the automatic allocation of Assessee to the Jurisdictional Assessing Officers in accordance with and to the extent provided of the schemes as defined in Faceless Jurisdiction of Income tax Authorities Scheme, 2022, which confers jurisdiction to the Jurisdictional Assessing Officer and hence the Jurisdictional Assessing Officer issued notice in the case as per E-Assessment of Income Assessment Scheme, 2022?

(e) Whether on the facts and circumstances of the case and in law the Hon’ble ITAT is justified in setting aside set aside notice under Section148 dated 27.03.2023 issued/ passed by the Jurisdictional Officer (JAO), given that the Finance Act, 2021 introduced provisions for faceless assessment and the automated allocation of cases, and does not explicitly prohibit the JAO from issuing such notices?

(f) Whether the Hon’ble ITAT, while quashing the notice issued under Section 148 by the Jurisdictional Assessing Officer JAO), failed to appreciate that the same is consistent with the legislative intent. when the powers to issue the notice under Section 148 remained intact with the JAO even after bringing the ‘Faceless Assessment Scheme?

(g) Whether on the facts and circumstances of the case and in law, the Hon’ble ITAT is correct in holding that JAO cannot issue notice under Section 148 of the Act, when both the JAO as well as units under NaFAC have concurrent jurisdiction under the Income Tax Act as has been held by the Hon’ble Kolkata High Court in its order in W.P. No. WPO/ 1566/2023 dated 13.09.2023 in the case of Triton Overseas Pvt. Ltd.?

(h) Whether the Hon’ble ITAT’s decision to quash the notice issued under Section 148 by the Jurisdictional Assessing Officer (JAO) is in alignment with the provisions of Section 144B which comes into picture only after the process of issuance of notice under Section 148 of the Act has been completed?

(i) Whether on the facts and circumstances of the case and in law, the Hon’ble ITAT is justified in quashing the notice issued under Section 148 by the JAO as per automated management allocation and risk strategies as per provisions of Section 151A read with Section 144B of the Income Tax Act?

(j) Whether the Hon’ble ITAT is correct in law in holding that the Section 144B, 151A of the Income Act, r/w CBDT Notification No.18/2022 dated 29.03.2022 mandate that the notice under Section 148 shall only by Faceless, when the provisions of 148 of the Act require issue of notices by Assessing Officers?”

2. It is not disputed that through a recent judgment of this Court dated 10.09.2026 in Jyoti Sareen v. Union of India (Punjab & Haryana)/CWP No.15791 of 2024, 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).