HC Quashes Reassessment in Search Case: Notice Issued by Jurisdictional AO Held Invalid:

HC Quashes Reassessment in Search Case: Notice Issued by Jurisdictional AO Held Invalid The petitioner challenged the validity of reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961, arising from a search-related case. The reassessment notice dated 24.03.2024 a the order dated 17.03.2025 under Section 147 were issued by the Jurisdictional Assessing Officer (JAO), rather than the Faceless Assessing Officer (FAO) as mandated under the Faceless Assessment Scheme notified by the CBDT on 29 March 2022. The petitioner argued that the reassessment was bad in law because it violated the statutory scheme of faceless allocation. The petitioner contended that once the Central Board of Direct Taxes (CBDT) had mandated faceless proceedings for reassessment, jurisdictional officers could not issue notices under Section 148, even in cases involving search and seizure. Main Issue: Whether a reassessment notice issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer in a search-related case under Section 148 of the Income Tax Act is valid in law. HC's Decision: The Hon'ble Court held that the controversy stood decided by earlier coordinate bench decisions in Ravindra Singh and Jaskaran Singh Brar. In those cases, the Court had ruled that reassessment notices issued by jurisdictional officers were invalid, as reassessment proceedings must be conducted under the Faceless Assessment Regime as per the CBDT notification dated 29 March 2022. The Court reiterated that the scheme under Section 151A of the Act required centralised and automated allocation of cases, and any deviation from it rendered the proceedings unsustainable. Thus, the Court quashed the reassessment notice dated 24.03.2024 and the consequent assessment order dated 17.03.2025 passed under Section 147. All pending applications were also disposed of. The Court also clarified that while all rights and contentions of the parties were kept open, the Revenue may seek revival of proceedings only if the Supreme Court later overturns the legal position settled in related cases. To Read Full Judgment, Download PDF Given Below