ITAT Mumbai: Reassessment Notice Issued by Jurisdictional Assessing Officer Instead of Faceless Assessing Officer Held Void Ab Initio; Assessment Proceedings Quashed [Read Order]

Mumbai: The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that reassessment proceedings initiated by the Jurisdictional Assessing Officer (JAO), in violation of the Faceless Assessment Scheme under Section 151A of the Income-tax Act, 1961, are void ab initio. The Tribunal emphasized that the faceless assessment regime is not a matter of administrative convenience but a jurisdictional imperative, and once jurisdiction is statutorily vested in the Faceless Assessing Officer, any notice issued by the Jurisdictional Assessing Officer is coram non judice (before one who is not a judge) and consequently void from inception.

The Tribunal, comprising Judicial Member Shri Sandeep Gosain and Accountant Member Shri Omkareshwar Chidara, delivered the decision on December 2, 2025, while allowing appeals filed by Mr. Sachiv Sahni for Assessment Years 2020-21, 2021-22, and 2022-23. The assessee was represented by Shri Upvan Gupta, Advocate, while the Revenue was represented by Shri Vivek Permpurna, CIT–DR.

The assessee had moved an application for raising an additional ground before the Tribunal, contending that “the Ld. Assessing Officer grossly erred, both in law and on facts, in purporting to assume jurisdiction and frame the impugned assessment under Section 147 read with Section 143(3) of the Income-tax Act, 1961, in complete disregard of the mandatory procedure prescribed under Sections 144B/151A of the Act. The said assessment, having been framed dehors the faceless assessment scheme and in violation of the statutory mandate, is ex facie without jurisdiction, null and void ab initio, and liable to be quashed on this ground alone.”

The Tribunal noted that the additional ground raised was legal in nature and went to the root of the case. Following the principles laid down by the Supreme Court in The Jute Corporation of India Ltd. v. CIT (187 ITR 688) and NTPC v. CIT (229 ITR 383), the Tribunal allowed the application for raising the additional ground and admitted the same for adjudication on merits.

The Tribunal observed that since the additional ground was legal in nature and went to the root of the case, and as the outcome of its decision would have a bearing on the other grounds raised by the assessee, it decided to adjudicate the additional ground first.

From the records, the Tribunal noted that notices under Section 148 of the Act for reopening the assessment were issued on March 30, 2024, for all three assessment years—2020-21, 2021-22, and 2022-23—by the Jurisdictional Assessing Officer.

The Tribunal held that the JAO could not have assumed jurisdiction and framed the impugned assessment under Section 147 read with Section 143(3) of the Act in disregard of the mandatory procedure prescribed under Sections 144B and 151A of the Act. It observed that the assessment, having been framed dehors the faceless assessment scheme and in violation of the statutory mandate, was without jurisdiction and therefore null and void.

The Tribunal’s view was fortified by the decision of the Coordinate Bench of the ITAT in Veda Real Estate Corporation Pvt. Ltd. (ITA No. 3221/Mum/2025 and Ors.), wherein it was held that the reassessment edifice is untenable where the notice under Section 148 is issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer, in contravention of the scheme notified under Section 151A vide Notification S.O. 1466(E) dated March 29, 2022.

The ITAT also referred to the legal position settled by the Bombay High Court in Hexaware Technologies Ltd. v. ACIT (2024) 464 ITR 430 (Bom), wherein it was decisively explained that once Parliament and the delegated notification assign jurisdiction to the faceless unit, the jurisdiction of the local officer stands eclipsed. The scheme does not contemplate concurrent or overlapping authority, and any notice issued outside the faceless framework is coram non judice and void at inception.

The Tribunal noted that the exposition laid down in Hexaware Technologies Ltd. v. ACIT has since been consistently followed by the Bombay High Court in Capital G LP v. ACIT (Writ Petition No. 15289 of 2024), Abhin Anil Kumar Shah v. ITO (2024) 468 ITR 350 (Bom), and Ganesh Nivrutti Jagtap v. ACIT (2024) 166 Taxmann.com 168 (Bom), thereby fortifying the principle that the faceless assessment regime under Section 151A is a jurisdictional mandate.

The Tribunal further observed that the reassessment proceedings initiated under Section 148 by the Jurisdictional Assessing Officer, in violation of the Faceless Scheme under Section 151A, stand vitiated in law. The jurisdictional breach strikes at the root of the assessment’s validity, rendering the notice under Section 148 and the consequent proceedings a nullity.

The Tribunal also observed that the dismissal of the Special Leave Petition by the Supreme Court in Deepanjan Roy v. ADIT (SLP (C) No. 18753/2025) lent further imprimatur to this settled legal position.

Accordingly, following the binding decision of the Jurisdictional High Court in Hexaware Technologies Ltd. v. ACIT, and in the absence of any contrary authority or distinguishing facts, the Tribunal held that it was bound to follow judicial discipline and consistency. It directed the Assessing Officer to verify the records, and if it is found that the reassessment notice was issued by the JAO under Section 147 read with Section 143(3) of the Act, the Assessing Officer was directed to apply the ratio laid down in Hexaware Technologies Ltd.

With these directions, the Tribunal restored the matter to the file of the Assessing Officer and allowed the additional ground raised by the assessee. It observed that since the matter had been restored for verification, there was no necessity to adjudicate the remaining grounds at that stage, as the decision on the additional ground would have a bearing on the other grounds as well. Accordingly, the other grounds were kept open.

For Assessment Years 2021-22 and 2022-23, the Tribunal noted that the facts and circumstances were identical to those of Assessment Year 2020-21, except for variation in figures, and therefore the decision would apply mutatis mutandis to those appeals as well.

Accordingly, all three appeals filed by the assessee were partly allowed for statistical purposes.

Case Title: Mr. Sachiv Sahni v. The ACIT, CC-2(3)

ITA Nos.: 6068, 6069 & 6070/Mum/2025

Assessment Years: 2020-21, 2021-22 & 2022-23

[Read Order]