The reassessment notice issued u/s 148 of the Income Tax Act, 1961, has been quashed by the Bombay High Court, citing that the reassessment notice did not comply with the mandate that the Faceless Assessing Officer only has the jurisdiction to reopen the assessment and not the Jurisdictional Assessing Officer. Also, even international taxation matters could be made within the faceless regime.
A Division Bench of Justices B.P. Colabawalla and Amit S. Jamsandekar was hearing a writ petition submitted by the taxpayer, whereby the taxpayer contested the validity of the Section 148 notice, on the foundation that the notice was issued by the Jurisdictional Assessing Officer(AO) breaching the mandate of the reassessment notice to be issued by the Faceless Assessing Officer(AO).
The taxpayer referred to the Bombay High Court’s decision in Hexaware Technologies Ltd. v. ACIT. In that case, the Court held that a reassessment notice issued by a Jurisdictional AO after the rollout of the faceless regime is invalid.
As per the revenue, the Hexaware judgment shall not apply to the case as its subject matter is international taxation. It mentioned that the Hexaware ruling was due before the Apex court, and hence the writ can be kept pending till the final disposal via the Apex court.
The Bench stated that even in cases of Central Charges and International Taxation, the reassessment notice under section 148 of the act shall need to be issued via the Faceless Assessing Officer following the faceless regime and not otherwise.
The case does not cover via the Hexaware judgment(supra), but also Abhin Anilkumar Shah Vs. Income-Tax Officer, International Taxation, whereby the court ruled that a faceless regime u/s 148 of the Act shall not exclude the central charges and international taxation charges.
Also, limited liberty to the revenue has been granted by the Bench to ask for the revival of the petition if the Hexaware judgment pending before the Supreme Court is set aside.
Read Also: What is Faceless Income Tax Assessment & How it Works for Taxpayers?
The Bench for the above-mentioned view has disposed of the writ petition by quashing the reassessment notice in favour of the taxpayer.
| Case Title | Shabana Aijaz Khan vs Income Tax Officer, International Tax Ward – 3(1)(1), Mumbai & Ors |
| Case No. | WRIT Petition (L) NO. 32001 OF 2025 |
| For Petitioner | Mr. Rutuja Pawar |
| For Respondent | Adv. Subir Kumar |
| Bombay High Court | Read Order |
