Issuance of Section 148 Notice by Local AO Lacks Jurisdiction in View of CBDT Notification Mandating NFAC

By | August 29, 2026
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Issuance of Section 148 Notice by Local AO Lacks Jurisdiction in View of CBDT Notification Mandating NFAC
Issue
Whether a notice issued under section 148 of the Income-tax Act, 1961 by a local Assessing Officer (AO) is legally sustainable when exclusive power to issue such notices was conferred upon the National Faceless Assessment Centre (NFAC) pursuant to the CBDT Notification dated 29-3-2022.
Facts
  • Assessment Year: The matter pertains to Assessment Year (AY) 2016-17.
  • Issuance of Notice: The local Assessing Officer issued a notice dated 31-3-2023 under section 148, along with consequential actions, initiating reassessment proceedings against the assessee.
  • Legal Challenge: The assessee challenged the validity of the notice via a writ petition, contending that the issuing authority lacked jurisdiction.
  • Applicable CBDT Directive: The assessee relied on the CBDT Circular/Notification dated 29-3-2022, which exclusively empowered the National Faceless Assessment Centre (NFAC) to issue notices under section 148 read with section 144B.
Decision
  • Following Co-ordinate Bench decisions on the identical issue, the writ petition was disposed of.
  • The court granted liberty to the Revenue to follow the procedure prescribed under the Act and proceed afresh in accordance with the law.
  • The issue was decided in favour of the assessee.
Key Takeaways
  • Strict Jurisdictional Compliance: Reassessment notices issued under section 148 must strictly align with statutory notifications regarding jurisdictional authority; failure to do so renders the notice invalid.
  • Exclusive NFAC Mandate: Subsequent to the CBDT Notification dated 29-3-2022, local AOs do not hold jurisdiction to directly issue section 148 notices where the faceless scheme applies.
  • Liberty to Re-initiate: Setting aside a notice on technical or jurisdictional grounds does not preclude the Revenue from initiating fresh proceedings under the correct statutory framework.
HIGH COURT OF PUNJAB & HARYANA
Ashok Singh Gautam HUF
v.
Income-tax Officer
Mrs. Sudeepti Sharma, J.
and Arun Palli, JJ.
CWP 6683 of 2025 (O & M)
MARCH  11, 2025
Kartik Bansal, Adv. for the Petitioner. Varun Issar, Sr. Standing Counsel and Ms. Pridhi Sandhu, Jr. Standing counsel for the Respondent.
ORDER
Mrs. Sudeepti sharma, J.- Challenge in the present petition is to notice dated 31.03.2023 issued under Section 148 of the Income Tax Act, 1961 (for short ‘Act 1961″) and conseuqential actions, for AY 2016-2017.
2. Learned counsel for the petitioner contends that the issue involved in the present writ petition is covered by the judgment passed by a Co-ordinate Bench of this Court in the cases of Jatinder Singh Bhangu v. Union of India  466 ITR 474  (Punjab & Haryana)/CWP No. 15745-2024 and connected matter, decided on 19.07.2024 andJasjit Singh v. Union of India [2024]   (Punjab & Haryana)/(CWP No. 21509-2023 and other connected matters), decided on 29.07.2024 .
3. Learned counsel appearing for Union of India has also not disputed the same.
4. We have heard learned counsel for the parties and perused the whole records of the case.
5. The petitioner has challenged the notice dated 31.03.2023 issued under Section 148 of the Act, 1961 and conseuqential actions, for AY 2016-2017, on the ground that the Issuing Authority had no jurisdiction to issue the same, in view of the circular/notification dated 29.03.2022 of the CBDT, wherein, it has been specifically enumerated that the NFAC has exclusive power to issue the notice under Section 148 of the Act, 1961.
6. A Co-ordinate Bench of this Court in Jatinder Singh Bhangu’s case (supra) and Jasjit Singh’s case (supra), allowed the writ petitions on the same issue, as raised in the present writ petition, by granting liberty to the revenue to follow the procedure as laid down under the Act, 1961 and proceed accordingly, if so advised.
7. In view of the above, the present writ petition is disposed of, in terms of Jatinder Singh Bhangu’s case (supra), decided on 19.07.2024 and Jasjit Singh’s case (supra), decided on 29.07.2024
8. All the pending applications, if any, also stand disposed of.