Validity of Segment 148 observe by Jurisdictional AO rather of Faceless AO

Swarn Singh Vs ITO (ITAT Amritsar)
Validity of Part 148 noticeby Jurisdictional Assessing Officer (JAO) as an alternative of Faceless Evaluating Officer
Difficulty: Validity of recognize u/s 148 of the Money Tax Act by the Jurisdictional Assessing Officer (JAO) rather of Faceless Assessing Officer
Swarn Singh Vs ITO [IT Appeal NO. 160 (ASR) OF 2024 
Observations and Ruling:
1. The Tribunal held that as for every the provisions of Portion 151A and plan framed u/s 151A (“E-Assessment of Revenue Escaping Evaluation Scheme, 2022”) the two situation of observe u/s 148 and completion of evaluation or reassessment u/s 148 shall be manufactured in a faceless method.
2. The Tribunal analyzed the clause 3(b) of the explained scheme which is reproduced hereunder:
“The Scheme presents that –
(a) evaluation, reassessment or recomputation beneath part 147 of the Act
(b) issuance of notice under area 148 of the Act,shall be by way of automatic allocation, in accordance with risk management strategy formulated by the Board as referred to in portion 148 of the Act for issuance of observe, and in a faceless way, to the extent presented in area 144B of the Act with reference to building assessment or reassessment of total revenue or loss of assessee.
3. ITAT designed the following essential observations:
(i) The observe u/s 148 shall be in a faceless manner and the phrase “to the extent delivered in Area 144B of the Act” is not relevant for difficulty of observe. The said phrase is applicable only with reference to assessment or reassessment.
(ii) The phrase “to the extent supplied in Part 144B of the Act” would imply that the restriction provided in Segment 144B of the Act, these kinds of as holding the Global Tax Jurisdiction or Central Circle Jurisdiction out of the ambit of Area 144B of the Actwould also implement below the Scheme.
4. The Tribunal held that the evaluation framed beneath segment 147 primarily based on the notice issued underneath segment 148 by the JAO is undesirable in legislation and the similar is to be quashed as void ab initio.
5. In light of the over conclusion subsequent important conclusions may possibly be drawn:
(i) Reassessment is invalid if Discover u/s 148 is issued by the Jurisdictional Officer.
(ii) the assessment/reassessment u/s 147 shall be produced in a faceless manner besides for the scenarios where by the restriction supplied u/s 144B are applicable these types of as cases protected less than Worldwide Tax Jurisdiction and Central Circle Jurisdiction
Entire Text OF THE Purchase OF ITAT AMRITSAR
The captioned appeal has been submitted by the assessee in opposition to the purchase of the ld. CIT(A) National Faceless Enchantment Centre (NFAC), Delhi dated 30.01.2024 handed ex-celebration qua the assessee is un-admitted in violation of portion 249(4) of the Act which is arising out of the Evaluation Get dated 29.12.2023 handed u/s 147 r.w.s. 144/144 of the Act by the NFAC (Delhi) in regard of the Evaluation 12 months: 2016-17.
2. The ld. counsel for the assessee has taken added grounds of attraction vide its application dated 06.05.2024:
“12. That the CT(A) has erred in confirming the addition made by the AO with no appreciating the actuality that the evaluation framed u/s 147 is poor in law as the discover u/s 148 was issued by the jurisdictional AO and not by NFAC. That the assumption of jurisdiction by the Ld. AO u/s 148 is in violation of obligatory jurisdictional problems as stipulated in Notification No 18/2022 dated 29th March, 2022.
13. That the CIT(A) has erred in not appreciating that the Detect u/s 148A(b) is illegal in see of the truth that the escapement of revenue taking into thing to consider the profit aspect on dollars deposits falls beneath the statutory Restrict of 50L as embedded in part 149(1)(b).”
3. At the time of listening to, the ld. counsel has submitted that the added grounds raised by the appellant is lawful ground with regard to the facts that the evaluation framed u/s 147 is invalid considering the fact that the appellant experienced not been given any of the notices issued by the division on the registered e-mail id and more the discover u/s 148 was issued by the jurisdictional AO which is against the provisions of the Earnings Tax Act, 1961. He contended that due to the fact this is a lawful floor of enchantment and no new info are necessary to be envisaged, the exact may perhaps be admitted in perspective of the judgment of M/s Nationwide Thermal Plant Co. Ltd. v. CIT as described in 229 ITR 383.
4. Obtaining listened to each the get-togethers and no objection of the ld. AR, extra grounds raised by the assessee being legal grounds, are admitted for adjudication.
5. The Ld. Counsel to start with challenged the authorized concern that the CT(A) has erred in confirming the addition created by the AO devoid of appreciating the point that the assessment framed u/s 147 is terrible in legislation as the see u/s 148 was issued by the jurisdictional AO and not by NFAC. As a result, the assumption of jurisdiction by the Ld. AO u/s 148 was in violation of required jurisdictional situations as stipulated in Notification No 18/2022 dated 29th March 2022. The Ld. AR contended that the get u/s 148A(d) was handed on 16.03.2023 and subsequently the recognize was issued u/s 148 dated 16.03.2023 by Jurisdictional AO is poor in legislation. In guidance, the Ld. AR has file a prepared synopsis with quotation placed on record, In support of the notification No 18/2022 dated 29.03.2022 (APB, Pg. 19) on scope of new Plan he submits as beneath: –
3. Scope of the Plan.––For the objective of this Plan,––
(a) evaluation, reassessment or recomputation under segment 147 of the Act,
(b) issuance of observe below portion 148 of the Act,
shall be via automatic allocation, in accordance with hazard administration tactic formulated by the Board as referred to in segment 148 of the Act for issuance of observe, and in a faceless way, to the extent presented in portion 144B of the Act with reference to building evaluation or reassessment of overall money or decline of assessee.
10.3 The related provisions of section 151A are summarised hereunder: –
Segment 151A of the Act gives the power to the Central Board of Immediate Taxes (“CBDT”) to notify the Plan for :
(i) the purpose of evaluation, reassessment or recomputation below Portion 147 or
(ii) issuance of detect beneath Area 148 or
(iii) conducting of inquiry or issuance of present induce detect or passing of order beneath Segment 148A or
(iv) sanction for issuance of observe below Section 151
so as to impart higher efficiency, transparency and accountability by inter alia removing the interface involving the Income Tax Authorities and assessee. Sub­section 3 of Portion 151A of the Act also presents that every notification issued under sub-area (1) and (2) of Section 151A of the Act shall be laid just before each individual House of Parliament.
6. The Ld. DR unsuccessful to rebut the rivalry of the Ld. AR but submitted compilation on faceless scheme of evaluation for thing to consider..
7. We have read both of those the sides, perused the file, impugned purchase and scenario law cited ahead of us. It is an undisputed point that in the current circumstance, the recognize was issued by jurisdictional AO i.e. ITO Ward, Katra and the order was handed u/s 148A(d) of the Act, on 16.03.2023 by the Jurisdiction AO . On perusal of the copy of detect issued u/s 148, it is mentioned that the notice was issued by jurisdictional AO i.e. ITO Ward, Katra and not by NFAC. The snapshot of the discover is produced for reference hereunder:

8. From the over, it is obvious that the notice u/s 148 issued by the jurisdictional AO and the order passed u/s 148A(d) by the jurisdictional AO are terrible in regulation as the similar are in violation of notification No 18/2022 issued by CBDT dated 29th March 2022 and versus the provisions of segment 151A.
9. In exercise of the powers conferred by sub-sections (1) and (2) of Area 151A of the Act, CBDT issued a notification dated 29th March, 2022 [Notification No.18/2022/F. No.370142/16/2022-TPL and formulated a Plan. The duplicate of the notification No 18/2022 dated 29.03.2022 is placed at web site no 19 of the PB. The Plan delivers that –
(a) the evaluation, reassessment or re-computation less than Portion 147 of the Act,
(b) and the issuance of recognize below Portion 148 of the Act, shall be as a result of automatic allocation, in accordance with danger management technique formulated by the Board as referred to in Section 148 of the Act for issuance of detect and in a faceless manner, to the extent offered in Portion 144B of the Act with reference to producing assessment or reassessment of complete cash flow or reduction of assessee. The impugned detect u/s 148 dated 16.03.2023 has been issued by JAO and not by the NFAC which is not in accordance with the scheme. The duplicate of notice u/s 148 along with buy u/s 148A(d) is enclosed with created submission as Annexure 1 and Annexure 2.
10. As a result, there is no problem of concurrent jurisdiction of the Jurisdiction Evaluating Officer (In brief “the JAO”) and the Faceless Examining Officer (In limited “the FAO”) for issuance of detect underneath Area 148 of the Act or even for passing assessment or reassessment order. In these specifics and circumstances, when precise jurisdiction has been assigned to either the JAO or the FAO in the Plan dated 29th March 2022, then it is the distinct jurisdiction to exclusion of the other and using any other watch in the subject, would not only result in chaos but also render the entire faceless proceedings redundant. In our see, when notices are issued by the FAO, it would be open up to an assessee to make submission prior to the JAO and vice versa, is obviously not contemplated in the Act. Thus, there is no dilemma of concurrent jurisdiction of each FAO and the JAO with respect to the issuance of notice beneath Portion 148 of the Act.
11. That the Scheme dated 29th March 2022 in paragraph 3 obviously presents that the issuance of notice “shall be as a result of automated allocation” which implies that the exact is obligatory and is expected to be adopted by the Department and does not give any discretion to the Office to pick no matter if to stick to it or not. That automated allocation is defined in paragraph 2(b) of the Scheme to signify an algorithm for randomised allocation of conditions by employing acceptable technological tools including artificial intelligence and device learning with a check out to optimise the use of methods. That means therefore that the case can be allocated randomly to any officer who would then have jurisdiction to situation the discover under Area 148 of the Act. It was not the scenario exactly where the jurisdictional AO was the random officer who had been allotted jurisdiction.
12. The Portion 151A of the Act itself contemplates formulation of Scheme for both equally assessment, reassessment or re-computation below Part 147 as very well as for issuance of recognize beneath Area 148 of the Act. For that reason, the Plan framed by the CBDT, which addresses equally the aforesaid aspect of the provisions of Segment 151A of the Act are unable to be reported to be relevant only for 1 component, i.e., proceedings put up the issue of recognize underneath Part 148 of the Act remaining assessment, reassessment or recomputation beneath Part 147 of the Act and inapplicable to the issuance of recognize underneath Part 148 of the Act. The Plan is obviously applicable for issuance of detect below Portion 148 of the Act and accordingly, it is only the FAO which can challenge the discover below Section 148 of the Act and not the JAO.
13. That the clause no 3(b) bargains with the situation of recognize u/s 148 in a faceless method. Moreover, for the purposes of generating assessment or reassessment, the provisions of Section 144B of the Act would be applicable as no these types of way for reassessment is separately provided in the Plan. For issuing notice, the term “to the extent presented in Portion 144B of the Act” is not pertinent. The Scheme presents that the detect under Section 148 of the Act, shall be issued by means of automated allocation, in accordance with possibility administration tactic formulated by the Board as referred to in Segment 148 of the Act and in a faceless way. Therefore, “to the extent furnished in Part 144B of the Act” does not go with issuance of recognize and is applicable only with reference to evaluation or reassessment. The phrase “to the extent provided in Portion 144B of the Act” would signify that the restriction provided in Portion 144B of the Act, this sort of as retaining the Global Tax Jurisdiction or Central Circle Jurisdiction out of the ambit of Segment 144B of the Act would also implement below the Plan. Even more the exceptions delivered in sub-area (7) and (8) of Segment 144B of the Act would also be applicable to the Plan.
14. The Hon’ble Telangana Significant Court docket in the situation of Kankanala Ravindra Reddy vs. Revenue Tax Officer 14 has held that in view of the provisions of Section 151A of the Act 14 (2023) 156 com 178 (Telangana) read through with the Scheme dated 29th March 2022 the notices issued by the JAOs are invalid and undesirable in regulation.
15. In the previously mentioned view, we maintain that the assessment framed u/s 147 dependent on the see issued u/s 148 by the JAO is lousy in legislation and the exact is quashed as void ab initio.
16. The appellant will get relief on the legal situation of validity of evaluation u/s 147 of the Act and As a result, other grounds are not adjudicated.
17. In the consequence, the enchantment submitted by the assessee is allowed.
Purchase pronounced in the open court on 06.06.2024