The Punjab and Haryana High Court has disposed of a writ petition challenging reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961, after finding that the jurisdictional issue raised by the petitioner was covered by earlier decisions of the Court holding that the National Faceless Assessment Centre (NFAC) had exclusive power to issue notices under Section 148 in the circumstances concerned.
The Bench of Justice Arun Palli and Justice Sudeepti Sharma has referred to the CBDT circular/notification dated 29 March 2022, which, according to the judgment, specifically enumerated that the NFAC had exclusive power to issue notices under Section 148 of the Income Tax Act.
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The dispute before the High Court concerned the jurisdiction of the authority that had issued the reassessment notice.
The petitioner contended that the authority issuing the Section 148 notice lacked jurisdiction in view of the CBDT circular/notification dated 29 March 2022. According to the petitioner, the said communication specifically assigned the NFAC exclusive power to issue notices under Section 148 of the Income Tax Act.
The challenge therefore was not directed merely at the merits of any proposed reassessment but at the legal authority and jurisdiction of the issuing authority itself.
During the proceedings, counsel for the petitioner submitted that the issue was already covered by two earlier decisions of coordinate Benches of the Punjab and Haryana High Court.
The High Court recorded that the petitioner had challenged the Section 148 notice dated 30 March 2024 and the subsequent Section 142(1) notices on the ground that the issuing authority lacked jurisdiction.
Thus, the central legal issue was whether the authority that actually issued the reassessment notice possessed the necessary jurisdiction under the administrative framework prescribed by the CBDT.
After hearing the parties and examining the record, the Division Bench noted that the same issue had already been considered by coordinate Benches in Jatinder Singh Bhangu and Jasjit Singh.
In those matters, the writ petitions had been allowed on the same jurisdictional issue. Importantly, however, the revenue had been granted liberty to follow the procedure prescribed under the Income Tax Act and proceed accordingly, if so advised.
The High Court therefore did not treat the earlier decisions as preventing the revenue from taking further action in accordance with the statutory procedure. Rather, the consequence was that the impugned proceedings could not be sustained in their existing form where the jurisdictional requirement had not been complied with.
Following the earlier coordinate Bench rulings, the Punjab and Haryana High Court disposed of the present writ petition in terms of the decisions in Jatinder Singh Bhangu and Jasjit Singh.
The Court also ordered that all pending applications, if any, would stand disposed of.
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