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Dadha Pharma LLP v. Dy.CIT ( Mad)( HC) www.itatonline.org .

S. 148A: Reassessment – Conducting inquiry, providing opportunity before issue of notice – Central Circle – Notice issued by jurisdictional Assessing Officer (JAO ) rather than the Faceless Assessment Officer (FAO)- Notice and consequential order under section 148A(d) is quashed and set aside – Liberty is granted to the Revenue to seek revival if the Supreme Court later reverses the decision in Hexaware Technologies Ltd . [ S. 148 , 148A(b), 148A(d) , 151A Art , 226 ]

The petitioner challenged a show cause notice dated 29.08.2024 issued under Section 148A(b) of the Income Tax Act, an order dated 31.08.2024 passed under Section 148A(d), and a consequential reassessment notice dated 31.08.2024 issued under Section 148. The primary ground of challenge was that the notices were issued by the Jurisdictional Assessing Officer (JAO) rather than the Faceless Assessment Officer (FAO), which the petitioner claimed rendered them invalid.

 

  1. Whether the issuance of reassessment-related notices by the JAO, instead of the FAO, renders them invalid?
  2. Whether the law laid down in Hexaware Technologies Ltd. v. ACIT and followed in subsequent Bombay High Court decisions is applicable?
  3. Whether the reassessment process was legally sustainable given the procedural defect?

 

 

The Court noted a divergence in views between two Single Judges on the issue and resolved the conflict by following the decision in Hexaware Technologies Ltd v.ACIT  ( 2024) 162 taxmann.com 225 / 464 ITR 430 ( Bom)( HC)  authored by the present Chief Justice. The honourable Court also referred , BMC Software India (P) Ltd v. Dy .CIT (2024) 167 taxmann.com 39 ( Bom)( HC) , Kairos Properties ( P) Ltd v .ACIT (2024) 165 taxmann.com 760/468 ITR 1688  ( Bom)( HC) . Court held that   it is mandatory for the FAO to issue such notices. Since the respondent had issued the notices through the JAO, they were declared invalid. The Court also noted that Special Leave Petitions against Hexaware and related cases were pending before the Supreme Court. It clarified that if the Apex Court reverses Hexaware, the Revenue would be at liberty to seek revival of the present case. Any other issues not covered by the Hexaware ruling were kept open for adjudication at an appropriate stage. Accordingly the writ petition was allowed. The impugned notices were quashed. There was no order as to costs. Liberty was granted to the Revenue to seek revival if the Supreme Court later reverses the decision in Hexaware.  (WP No.35385 of 2024 dt.24 -6 -2025 )( AY. 2018 -19) 

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