Bombay HC quashed the notice issued by Jurisdictional Assessing Officer (JAO) instead of Faceless AO (FAO) and held that the notice is not in accordance with the Faceless assessment scheme for assessment, reassessment or re-computation under Section 147 (Scheme) as framed by CBDT under Section 151A vide Notification No. 18/2022.

Key excerpts of the ruling

• The Court held that there is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice under Section 148 or passing order;
• Observes that as specific jurisdiction has been assigned either to the JAO or the FAO in the Scheme to the exclusion of the other and any other view would render the faceless proceedings redundant;
• The Scheme is applicable both for issuance of notice under Section 148 as well as making assessment under Section 147 and hence, “it is only the FAO which can issue the notice under Section 148 of the Act and not the JAO”;
• The argument of the Revenue that the Scheme applies only to the proceedings under Section 148 and is inapplicable to the issuance of notice under Section 148 would render the Scheme partly otiose and Revenue being subordinate to CBDT cannot contend that Scheme framed by CBDT is partly otiose;
• Holds that guideline dt. Aug 01, 2022 relied upon by the Revenue is not applicable because (i) They are internal guidelines; (ii) They are not issued under Section 119 and any such guideline issued by the CBDT is not binding on the Assessee (iii) They are also not binding on Revenue as they are contrary to the provisions of the Act and the Scheme framed under Section 151A;
• Relies on the Telangana HC judgment in Kankanala Ravindra Reddy wherein it was held that in view of Section 151A read with the Scheme, the notices issued by the JAOs are invalid and bad in law.