The Punjab and Haryana High Court has disposed of a taxpayer’s challenge to reassessment proceedings for Assessment Year 2019-20 in terms of its earlier decisions holding that notices under Section 148 of the Income Tax Act, 1961, were required to be issued through the National Faceless Assessment Centre under the faceless reassessment framework.
The bench of Justice Arun Palli and Justice Sudeempti Sharma has observed that the petitioner’s challenge was specifically founded on the absence of jurisdiction of the issuing authority. The challenge was based on the contention that, under the CBDT notification and circular dated March 29, 2022, the National Faceless Assessment Centre had exclusive power to issue the notice under Section 148.
The petitioner had challenged the notice dated April 7, 2023, issued under Section 148 of the Income Tax Act. He also questioned the order passed on the same date under Section 148A(d), the show-cause notice dated March 9, 2023, issued under Section 148A(b), and all consequential proceedings arising from those actions.
The central issue before the High Court was whether the authority that initiated the reassessment proceedings possessed the jurisdiction to issue the impugned notices and order.
The petitioner argued that the reassessment proceedings were contrary to the Central Board of Direct Taxes’ notification and circular dated March 29, 2022. According to him, the applicable faceless reassessment scheme conferred exclusive authority upon the National Faceless Assessment Centre to issue a notice under Section 148.
It was submitted that the impugned notice had instead been issued by an authority that lacked jurisdiction under the statutory framework and the CBDT’s faceless reassessment notification. Consequently, the notice under Section 148, the order under Section 148A(d), the preceding show-cause notice and all subsequent actions were liable to be set aside.
Counsel for the petitioner relied upon the Punjab and Haryana High Court’s earlier rulings in Jatinder Singh Bhangu v. Union of India and Others and Jasjit Singh v. Union of India and Others.
The court was informed that the coordinate bench had already considered the same jurisdictional controversy in those cases. The earlier writ petitions had been allowed while granting liberty to the Income Tax Department to proceed afresh, if so advised, by following the procedure prescribed under the Income Tax Act.
Significantly, counsel appearing for the Union of India did not dispute that the issue raised in the present petition was covered by the two earlier judgments.
The High Court observed that an identical issue had been dealt with in Jatinder Singh Bhangu and Jasjit Singh. In those decisions, the court had allowed the writ petitions but preserved the Revenue’s right to initiate appropriate proceedings in accordance with the procedure laid down under the Income Tax Act.
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