1.
"Reassessment Barred by Limitation: SC Confirms Limitation under Amended Section 149 Applies Strictly”
ITO v. Alpesh Hasmukh Sheth [2025] 170 taxmann.com 629 (SC),
(06 January 2025)
(i) Issue Decided by the Court:
Whether the reassessment notice issued under Section 148 for Assessment Year (AY) 2014–15 on 31 July 2022 was barred by limitation in view of the amended provisions of Section 149 as introduced by the Finance Act, 2021.
(ii) Facts Relating to the Issue:
The assessee filed writ petitions challenging reassessment notices issued under Section 148 for AY 2014–15. The core contention was that under the amended first proviso to Section 149, as applicable from 1 April 2021, any reassessment for AY 2014–15 was time-barred if issued after that date. Despite this, the Assessing Officer had issued the notice on 31 July 2022. The Bombay High Court accepted the assessee’s argument, relying on the decision in Godrej Industries Ltd. v. ACIT [2024] 160 taxmann.com 13 (Bom).
(iii) Arguments of the Appellant (Revenue) in Brief:
The Revenue filed Special Leave Petitions (SLPs) challenging the High Court’s decision, essentially defending the issuance of the Section 148 notice and seeking its validity notwithstanding the limitation bar cited by the assessee.
(iv) Arguments of the Respondent (Assessee) in Brief:
The assessee argued that:
The case was fully covered by the Bombay High Court’s ruling in Godrej Industries Ltd.
As per the amended Section 149(1) and its first proviso, the time limit for issuing notice for AY 2014–15 expired on 31 March 2021.
Therefore, any notice issued beyond that date, like the one on 31 July 2022, was time-barred and void ab initio.
(v) Decision of the Court:
The Supreme Court disposed of the Revenue’s SLPs by holding that the case was squarely covered by its earlier judgment in Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC). It thus directed that the matter be governed by the law laid down in the said decision, allowing the Revenue to proceed only in terms of that judgment, and preserving the assessee’s rights except for what has been conclusively decided therein.
(vi) Reasoning Given by the Court for Its Decision:
The Court found that the facts and legal issues raised in the present SLP were fully addressed and concluded in the Rajeev Bansal judgment.
It reiterated that the reassessment validity must be tested based on the legal position as it stood on the date of the notice, following Godrej Industries Ltd.
Consequently, it upheld the High Court's quashing of the notices and ordered Revenue authorities to adhere to the legal principles settled in Rajeev Bansal while disposing of objections.
(vii) Full Citation of the Judgment Relied Upon by the Court:
Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) / 2024 (11) Scale 473
Also followed: Godrej Industries Ltd. v. Assistant Commissioner of Income Tax
[2024] 160 taxmann.com 13 (Bombay)
(viii) Circumstances Where This Judgment Can Be Applied:
When reassessment notices are issued for pre-AY 2016–17 beyond 31 March 2021.
In cases where the Finance Act, 2021 amendments to Section 149(1) and its first proviso govern limitation periods.
Where the Revenue seeks to invoke reassessment despite limitation bars under amended law, this judgment can be cited to quash such proceedings.
For interpreting the retrospective vs prospective application of procedural changes under Section 148A.
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2.
“Reassessment Notice on Deceased Assessee Nullified”
Lal Chand Verma v. UOI [2025] 170 taxmann.com 825 (Delhi High Court)
(i) Issue Decided by the Court:
Whether a reassessment notice under Section 148A(b) issued in the name of a deceased assessee is valid, and whether the absence of proper notice to the legal heir vitiates the entire proceedings under Sections 148A(d) and 148 of the Income Tax Act, 1961.
(ii) Facts Relating to the Issue:
The original assessee, Lal Chand Verma, died on 30 July 2021.
On 30 March 2023, a notice under Section 148A(b) was issued in his name for AY 2019–20, based on statements made by another assessee.
The deceased's son and legal heir, Puneet Verma, responded to the notice, informing the Assessing Officer (AO) of his father’s death and submitted the death certificate.
Despite this, the AO passed an order under Section 148A(d) and issued a notice under Section 148, treating financial transactions worth ₹14.55 lakhs as escaped income.
(iii) Arguments of the Appellant (Petitioner/Legal Heir) in Brief:
The reassessment notice was issued to a dead person, hence void ab initio.
No notice under Section 159(2)(b) was issued to the legal heir.
Proceedings against a deceased are without jurisdiction, and any assessment action taken thereafter is illegal and unenforceable.
The reliance was placed on judgments like Savita Kapila v. ACIT and Dharamraj v. ITO.
(iv) Arguments of the Respondent (Revenue) in Brief:
The defect was curable under Section 159, which permits continuation or initiation of proceedings against the legal heir of a deceased assessee.
Argued that such omission could be cured under Section 292B, which protects against invalidation due to procedural defects.
(v) Decision of the Court:
The Delhi High Court quashed the reassessment notice under Section 148A(b) and all consequential proceedings under Section 148, declaring them void and without jurisdiction. The Court ruled in favour of the assessee (legal heir).
(vi) Reasoning Given by the Court for Its Decision:
Jurisdictional precondition under Section 148 is the issuance of notice to a living and correct person. A notice issued to a deceased individual is invalid in law.
Section 159 is applicable only if proceedings were initiated while the assessee was alive and then continued against the legal heir, which was not the case here.
Mere reference to Section 292B cannot cure a jurisdictional defect, especially where the basic condition of issuing notice to a competent person was not fulfilled.
The Court reaffirmed the view in Savita Kapila and Dharamraj that issuance of notice to a deceased assessee is a fatal error, rendering the proceedings void
(vii) Full Citation of the Judgments Relied Upon by the Court:
Savita Kapila v. Asstt. CIT [2020] 118 taxmann.com 46 / 273 Taxman 148 / 426 ITR 502 (Delhi)
Dharamraj v. ITO [2022] 441 ITR 462 (Delhi)
Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC) / AIR 1961 SC 372
Sumit Balkrishna Gupta v. ACIT [2019] 103 taxmann.com 188 / 414 ITR 292 (Bom.)
(viii) Circumstances Where This Judgment Can Be Applied:
When a notice under Section 148 or 148A is issued after the death of an assessee, without informing or involving the legal heir.
Where jurisdiction is assumed on the basis of a notice to a deceased person.
To challenge reassessment proceedings initiated without observing mandatory procedures under Section 159 of the Income Tax Act.
In situations where the department attempts to invoke Section 292B to cure fundamental jurisdictional defects.
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3.
“Reassessment Quashed for Lack of Jurisdiction: NFAC Alone Can Issue Section 148 Notices”
Gurjinder Singh v. UOI [2025] 170 taxmann.com 747 (Punjab & Haryana)
(i) Issue Decided by the Court:
Whether a reassessment notice under Section 148 issued by the Jurisdictional Assessing Officer (JAO), instead of the National Faceless Assessment Centre (NFAC), is valid under the Income Tax Act, 1961, especially in light of CBDT Notification No. 18/2022 dated 29-03-2022.
(ii) Facts Relating to the Issue:
The Jurisdictional AO issued notices to the assessee under Section 148A(a) and 148A(b) and passed an order under Section 148A(d), followed by the issuance of notice under Section 148 for AY 2017–18.
The assessee challenged these actions on the ground that, as per CBDT Notification dated 29 March 2022, only the NFAC had the authority to issue such notices under the faceless assessment regime.
The Revenue did not dispute the applicability of the said notification.
(iii) Arguments of the Appellant (Petitioner) in Brief:
The petitioner contended that the CBDT Notification No. 18/2022 mandates that only the NFAC has jurisdiction to issue notices under Section 148.
The JAO’s action was without jurisdiction and contrary to the faceless assessment scheme introduced to enhance transparency and reduce interface.
(iv) Arguments of the Defendant (Revenue) in Brief:
The Union of India did not contest the legal position asserted by the petitioner and agreed that the issue was covered by earlier decisions of the same High Court.
It was willing to proceed as per law laid down in earlier binding precedents.
(v) Decision of the Court:
The Punjab & Haryana High Court quashed the reassessment notices issued by the Jurisdictional AO under Sections 148A(b), 148A(d), and 148. It held that only the NFAC has the exclusive authority to issue such notices post-CBDT Notification dated 29-03-2022.
(vi) Reasoning Given by the Court for Its Decision:
The Court relied on its own co-ordinate bench decisions in:
Jatinder Singh Bhangu v. Union of India [2024] 165 taxmann.com 115
Jasjit Singh v. Union of India [2024] 165 taxmann.com 114
It emphasized that the scheme of faceless assessment would be rendered meaningless if jurisdictional AOs were allowed to issue reassessment notices.
The CBDT notification clearly conferred exclusive power on the NFAC to issue notices under Section 148.
Therefore, any notice issued contrary to this statutory framework is without jurisdiction and liable to be quashed.
(vii) Full Citation of the Judgments Relied Upon by the Court:
Jatinder Singh Bhangu v. Union of India [2024] 165 taxmann.com 115 / 300 Taxman 228 / 466 ITR 474 (Punjab & Haryana)
Jasjit Singh v. Union of India [2024] 165 taxmann.com 114 / 300 Taxman 437 / 467 ITR 52 (Punjab & Haryana)
CBDT Notification No. 18/2022, dated 29 March 2022
(viii) Circumstances Where This Judgment Can Be Applied:
Where reassessment notices under Sections 148 or 148A are issued by a Jurisdictional Assessing Officer instead of the NFAC, post the CBDT notification.
To challenge reopening proceedings initiated without adherence to the faceless regime introduced under Section 144B and CBDT instructions.
In matters where jurisdictional irregularities are clear and undisputed, even if factual grounds of reassessment are not contested.
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4.
“Reassessment Valid Despite Initial Notice to Non-Existent Entity:”
Nokia Solutions and Networks India (P.) Ltd. v. DCIT [2025] 170 taxmann.com 794 (Delhi)
(i) Issue Decided by the Court:
Whether a reassessment notice initially issued in the name of a non-existent amalgamated company would render the subsequent reassessment proceedings void, even if the correct procedure under Section 148A was later followed and notice was issued in the name of the correct assessee.
(ii) Facts Relating to the Issue:
The original notice dated 09.04.2021 under Section 148 was issued in the name of Nokia Siemens Networks India Pvt. Ltd. (NSNIPL), which had already amalgamated with Nokia Solutions and Networks India Pvt. Ltd., the petitioner.
The petitioner argued that this initial notice was void as it was issued to a non-existent entity.
However, a fresh notice under Section 148 dated 29.07.2022 was subsequently issued in the name of the correct entity, after following the entire procedure under Section 148A, including show cause and consideration of reply.
(iii) Arguments of the Appellant (Petitioner) in Brief:
The original reassessment notice was addressed to a company that no longer existed, thus was invalid.
Since this notice formed the foundation of the reassessment proceedings, the entire proceeding must be quashed as lacking jurisdiction ab initio.
(iv) Arguments of the Defendant (Revenue) in Brief:
The Revenue relied on the Supreme Court’s ruling in Ashish Agarwal (2022), which directed that all reassessment notices issued after 1 April 2021 under the old law be deemed as notices under Section 148A(b).
It argued that a fresh notice under Section 148 was later issued to the correct amalgamated company after full compliance with Section 148A.
Therefore, reassessment proceedings are valid and not vitiated by the original defect.
(v) Decision of the Court:
The Delhi High Court dismissed the petition, holding that since a valid notice under Section 148 was ultimately issued to the correct assessee after following Section 148A procedure, the earlier technical defect does not vitiate the proceedings.
(vi) Reasoning Given by the Court for Its Decision:
The original notice, although issued to a non-existent entity, must be deemed a show cause notice under Section 148A(b), per the Supreme Court’s directive in Union of India v. Ashish Agarwal.
The jurisdictional foundation of reassessment is now the valid notice under Section 148 issued on 29.07.2022, not the earlier invalid one.
The petitioner itself acknowledged that a defective notice under Section 148A(b) does not render subsequent proceedings void, provided proper procedure is followed.
Therefore, the reassessment is legally sustainable, and the challenge was rejected.
(vii) Full Citation of the Judgments Relied Upon by the Court:
Union of India v. Ashish Agarwal [2022] 138 taxmann.com 64 / 286 Taxman 183 / 444 ITR 1 (SC)
Mon Mohan Kohli v. ACIT [2021] 133 taxmann.com 166 / 441 ITR 207 (Delhi)
(viii) Circumstances Where This Judgment Can Be Applied:
Where a reassessment notice is initially issued to a non-existent entity but later rectified through proper issuance under Section 148 after complying with Section 148A procedures.
In scenarios governed by the Ashish Agarwal judgment, where notices under the old law post-1.4.2021 are deemed to be Section 148A(b) notices.
Where assessees seek to invalidate proceedings solely due to initial clerical errors in naming, despite subsequent legal compliance.
It clarifies that technical errors in show cause notices do not vitiate proceedings if the substantive process is lawfully followed thereafter.
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5.
"Invalid Transfer Without Hearing Vitiates Jurisdiction: Rule under Section 127 Reaffirmed"
Amit Kumar Gupta v. ITO [2025] 171 taxmann.com 16 (ITAT Raipur – Trib.)
(i) Issue Decided by the Court
Whether the jurisdiction assumed by the Assessing Officer (AO) of ITO-3, Korba to pass the assessment order under Section 144 read with Section 147 was valid when the transfer order under Section 127 by the Principal CIT, Bilaspur, was made without affording the assessee an opportunity of being heard.
(ii) Facts Relating to the Issue
The assessee deposited ₹17,05,824 in cash in his bank account during AY 2011–12 but did not file his income tax return.
The ITO-1, Ambikapur issued a notice under Section 148 on 23.03.2018, which was followed by a transfer of jurisdiction to ITO-3, Korba via order dated 07.09.2018 under Section 127.
The assessee claimed he was never afforded an opportunity of being heard prior to the transfer, in violation of Section 127(1) & (3).
The AO framed an ex-parte best judgment assessment under Section 144 and made an addition under Section 69A for the unexplained cash deposits.
The assessee challenged the assessment citing invalid jurisdiction due to the illegal transfer and lack of notice.
(iii) Arguments of the Appellant in Brief
The transfer under Section 127 was made without a hearing, violating a mandatory legal requirement.
The ITO-3, Korba lacked lawful jurisdiction due to this defect, rendering the assessment void.
The CIT(A) wrongly refrained from adjudicating the issue of jurisdiction, stating he lacked authority to review the transfer order.
(iv) Arguments of the Defendant (Revenue) in Brief
The AO rightly acted based on the transfer order passed by the Principal CIT, Bilaspur.
CIT(A) is not the competent forum to question the order under Section 127.
All notices were issued to the address on record, and the assessee failed to update his PAN database or respond to statutory notices.
(v) Decision of the Court
The ITAT held that:
The CIT(A) erred in not adjudicating the assessee’s grievance regarding the jurisdiction of the AO.
The transfer under Section 127 was between officers located in different cities (Ambikapur to Korba); hence, a hearing was mandatory.
Matter remanded back to the CIT(A) to adjudicate the issue of jurisdiction properly.
Appeals allowed for statistical purposes.
(vi) Reasoning Given by the Court for its Decision
Section 127(1) and (3) of the Income Tax Act mandates that when a case is transferred between officers in different localities, the assessee must be given an opportunity of being heard.
The transfer from Ambikapur to Korba was without such opportunity, violating this provision.
The assessee challenged not the transfer order per se, but the consequential jurisdictional assumption by the AO, which CIT(A) had authority to examine.
Denial to adjudicate the grievance resulted in unnecessary litigation and procedural unfairness.
(vii) Full Citation of the Judgement Relied Upon by the Court for its Decision
Amit Kumar Gupta v. Income-tax Officer [2025] 171 taxmann.com 16 (Raipur - Trib.) [13-01-2025]
(viii) Circumstances Where This Judgement Can Be Applied
When jurisdiction is challenged due to transfer orders passed under Section 127 without affording a hearing.
When CIT(A) refuses to entertain challenges to jurisdiction assumed by the AO based on procedural lapses in transfer.
Cases where assessment orders are passed following illegal or improperly communicated jurisdictional transfers.
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6.
“Application of Mind in Grant of Sanction under Section 151 is Mandatory”
ACIT v. Teleperformance Global Service (P.) Ltd., [2025] 170 taxmann.com 832 (SC)
(i) Issue Decided by the Court
Whether the approval granted by the Principal Commissioner under Section 151 of the Income Tax Act, 1961, for issuance of notice under Section 148 was valid despite inconsistencies in the quantum of income escaping assessment between the approval note and the draft order under Section 148A(d).
(ii) Facts Relating to the Issue
For the assessment year 2019–20, the Assessing Officer issued an order under Section 148A(d) and a notice under Section 148 after obtaining approval from the Principal Commissioner under Section 151. The assessee challenged this approval, stating that the figures for the escaped income varied in the approval form and the draft order. The Revenue justified this as a typographical error.
(iii) Arguments of the Appellant (Revenue) in Brief
The discrepancy in the escaped income figures was merely a typographical mistake by the Assessing Officer.
The sanction process under Section 151 was substantially followed.
The approval and consequent notice should not be invalidated on minor errors.
(iv) Arguments of the Defendant (Assessee) in Brief
The approval under Section 151 was granted without due application of mind.
A discrepancy in figures between the approval note and the draft order is not a trivial error but indicates a lack of diligent scrutiny.
Such procedural lapses vitiate the jurisdictional precondition for reassessment.
(v) Decision of the Court
The Supreme Court dismissed the Special Leave Petition (SLP) filed by the Revenue due to:
An unexplained delay of 181 days in filing the SLP.
No merit found in the challenge to the High Court's order.
(vi) Reasoning Given by the Court for its Decision
The High Court correctly held that a typographical error might have been made by the Assessing Officer; however, if the Principal Commissioner had applied their mind diligently to the draft order and approval application, the discrepancy in figures would have been noticed.
The High Court emphasized that under Section 151, the authority granting approval must scrutinize and, upon finding such inconsistencies, either refuse the approval or return the file for correction.
Since such application of mind was lacking, the approval was deemed invalid, and consequently, the notice under Section 148 was also invalid.
The Supreme Court found no ground to interfere with this reasoning.
(vii) Full Citation of the Judgement Relied Upon by the Court for its Decision
Teleperformance Global Service (P.) Ltd. v. Assistant Commissioner of Income-tax [2024] 161 taxmann.com 258 / 298 Taxman 769 (Bombay).
(viii) Circumstances Where This Judgement Can Be Applied
Where there is a discrepancy between the quantum of income escaping assessment in the approval form and the draft order under Section 148A(d).
In cases where approval under Section 151 is challenged for lack of application of mind.
When procedural lapses affect the validity of jurisdictional requirements for reopening of assessment.
In reassessment matters post the introduction of Section 148A (w.e.f. 01.04.2021) and compliance obligations under Section 151.
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7.
“Reassessment Justified on RTGS Transactions: Remand for Verification of Business Receipts”
Pradeep Kumar Agrawal v ITO [2025] 171 taxmann.com 98 (Raipur - Trib.)
(i) Issue Decided by the Court
Whether the reassessment under Section 147/148 of the Income Tax Act, 1961, based on information from the Investigation Wing regarding unexplained bank RTGS credits followed by cash withdrawals, was valid, and whether the estimated addition of 5% of such credits as undisclosed income was sustainable in law.
(ii) Facts Relating to the Issue
The assessee, engaged in the trading of paddy, rice, and transport, had originally been assessed under Section 143(3). Later, the Assessing Officer received information from the Investigation Wing regarding RTGS credits of ₹8.31 crore and cash withdrawals of ₹4.67 crore in the assessee’s bank account. These transactions were not verified during original assessment. A reopening under Section 148 was initiated and an addition of 5% of such credits was made as business income due to the assessee’s failure to explain the source.
(iii) Arguments of the Appellant in Brief
The reopening was based on a mere change of opinion as the facts were already on record.
The RTGS credits were proceeds from accounted sales and receipts from debtors, hence not unexplained.
The addition of business income was not part of the original reasons recorded for reopening and hence beyond jurisdiction.
No notice under Section 143(2) was issued after filing return post-Section 148 notice, making reassessment void.
5% ad hoc GP addition was arbitrary, especially when past average GP was lower.
(iv) Arguments of the Defendant in Brief
Information from the Investigation Wing was new material, not considered earlier, thus valid for reopening.
The assessee was non-cooperative, failing to respond to multiple notices.
RTGS entries appeared suspicious, and the assessee gave no documentary proof to substantiate.
Since the entries pertained to the same transactions that formed the basis of reopening, the addition was not on a new issue.
5% estimation was a plausible business income due to lack of proper explanation by the assessee.
(v) Decision of the Court
The Tribunal held that:
Reopening was valid as it was based on fresh tangible material.
Addition of 5% of total RTGS credits was not on an alien issue but directly linked to the reasons recorded.
However, since estimation was without basis, the matter was remanded to the Assessing Officer for verification of whether such transactions were properly accounted for in the books.
(vi) Reasoning Given by the Court for its Decision
The original assessment did not examine the large RTGS transactions.
Information from the Investigation Wing constituted new, credible material, justifying reopening.
The assessee’s non-compliance during reassessment proceedings prevented proper verification.
Although the 5% addition lacked a specific basis in prior GP history, the assessee also failed to demonstrate that the transactions were accounted for, necessitating re-examination.
The assessment was not invalid for lack of Section 143(2) notice since the assessee did not file a valid return in response to Section 148.
(vii) Full Citation of the Judgment Relied Upon by the Court
Vivek Nathani v. Asstt. CIT [2024] 168 taxmann.com 79 (Raipur - Trib.)
CIT v. Ram Singh [2008] 306 ITR 343 (Rajasthan)
Pr. CIT v. Prosperous Buildcon (P.) Ltd. [2023] 156 taxmann.com 446 (Delhi HC)
CIT v. Gupta K. N. Construction Co. [2015] 59 taxmann.com 293 (Rajasthan HC)
CIT v. Jaimal Ram Kasturi [2013] 33 taxmann.com 315 (Rajasthan HC)
Other supporting precedents on reassessment, GP estimation, and application of mind under Section 151.
(viii) Circumstances Where This Judgment Can Be Applied
Where reopening is based on post-assessment discovery of unexplained financial transactions.
When the assessee fails to respond to assessment notices and does not substantiate the entries.
In cases involving estimated additions based on pattern of unexplained credits, subject to verification.
For establishing the validity of reopening based on fresh investigation input, even if the original assessment exists.
To clarify Section 143(2) non-issuance where no valid return is filed post-reopening.
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8.
"Faceless Assessment and Procedural Compliance: Limits of Writ Jurisdiction in Tax Disputes"
Awadh Kishor Singh v. National Faceless Assessment Centre [(2025) 171 taxmann.com 722 (Patna)]
(i) Issue Decided by the Court
Whether the assessment order passed under Section 147 r/w Sections 144 and 144B, making an addition of ₹1.76 crores under Section 69A of the Income Tax Act, 1961, in faceless proceedings, without personal hearing and despite the assessee's claim of illiteracy and lack of awareness, suffered from jurisdictional error warranting intervention under Article 226.
(ii) Facts Relating to the Issue
The petitioner, engaged in fish trade on commission, declared ₹2.35 lakh as income.
The Income Tax Department found ₹1.76 crore in cash deposits in his ICICI accounts via the Insight portal.
Notices under Sections 148 and 142(1) were issued, but the petitioner failed to respond.
A draft assessment order under Sections 144/147 was passed with due approvals under Section 151.
The petitioner filed a writ, claiming lack of opportunity and violation of Section 144B.
(iii) Arguments of the Appellant (Petitioner) in Brief
Petitioner claimed to be illiterate and unaware of notices served via e-mail.
Alleged that faceless assessment under Section 144B was conducted without granting proper opportunity to be heard.
Argued that mere uploading of notices did not satisfy procedural fairness.
Cited Calcutta Discount Co. Ltd. and Kranti Associates Pvt. Ltd. to argue for reasoned approvals and natural justice.
(iv) Arguments of the Defendant (Revenue/Respondent) in Brief
Respondent asserted that notices were duly served electronically and all steps under Section 144B were followed.
Emphasized that approvals from PCIT were duly obtained under Section 151.
Pointed to continuous non-compliance despite multiple notices via email and post.
Cited GKN Driveshafts (India) Ltd. and Venky Steels Pvt. Ltd. to assert that writ remedy was not maintainable when appeal remedy was available.
(v) Decision of the Court
The Patna High Court dismissed the writ petition, holding that:
Due procedure under Sections 147, 148, and 151 was followed.
There was no jurisdictional error warranting writ interference.
The petitioner may pursue alternate appellate remedy.
(vi) Reasoning Given by the Court for Its Decision
Notices were served on registered email and unresponded despite reminders.
Approval under Section 151 was not mechanical; reasons were recorded.
Assessment order passed after all necessary procedural steps.
Faceless assessment procedures under Section 144B were adhered to.
Since the matter did not involve breach of jurisdiction or gross illegality, writ jurisdiction under Article 226 was not invoked.
(vii) Full Citation of the Judgement Relied Upon by the Court
1) Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC)
2) Kranti Associates (P) Ltd. v. Masood Ahmed Khan (2010) 9 SCC 496
3) Chhugamal Rajpal v. S.P. Chaliha [1971] 79 ITR 603 (SC)
4) GKN Driveshafts (India) Ltd. v. ITO (2003) 259 ITR 19 (SC)
5) Principal CIT v. N.C. Cables Ltd. [2017] 88 taxmann.com 649 (Delhi)
6) Principal CIT v. Pioneer Town Planners (P) Ltd. [2024] 160 taxmann.com 652 (Delhi)
7) Abha Saraf v. Union of India, CWJC No. 3207 of 2022 (Patna HC)
(viii) Circumstances Where This Judgement Can Be Applied
Cases where assessment under Section 147/144B is challenged citing procedural lapses.
Where assessee claims non-receipt of notices served electronically.
Writ petitions filed without exhausting alternative appellate remedies.
Disputes concerning unexplained cash under Section 69A based on bank records.
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9.
“Reassessment Notices to Non-Existent Entities Post-Merger: A Case of Substantive Illegality”
City Corporation Ltd. v. Assistant Commissioner of Income-tax [2025] 171 taxmann.com 301 (Bombay)
(i) Issue Decided by the Court
Whether a reassessment notice under Section 148 of the Income Tax Act, 1961, issued to a non-existent entity—Amanora Future Towers Pvt. Ltd. (AFTPL)—after its merger with City Corporation Ltd. (CCL), was valid in law.
(ii) Facts Relating to the Issue
AFTPL was merged with CCL with effect from 01.04.2018 as per an NCLT order dated 27.04.2020.
This merger was duly communicated to the Income Tax Department on 27.08.2020.
Despite this, the Department issued a notice under Section 148 on 31.03.2023 in the name of AFTPL for AYs 2013–14 to 2019–20.
The Department claimed the notice was generated on AFTPL's PAN due to technical limitations in the system.
(iii) Arguments of the Appellant (City Corporation Ltd.) in Brief
The notice was void ab initio as AFTPL had ceased to exist post-merger.
Issuing notice to a non-existent entity constitutes a jurisdictional defect and is not merely procedural.
Relied heavily on the Supreme Court judgment in Pr. CIT v. Maruti Suzuki India Ltd. and Bombay High Court rulings in Uber India Systems and Alok Knit Exports Ltd..
(iv) Arguments of the Respondent (Revenue) in Brief
The notice was intended for CCL, and the error in addressing it to AFTPL was due to a "technical glitch" in the system, where the editable field did not allow modification of PAN details.
Approvals were taken in the names of both AFTPL and CCL.
Sought reliance on Sky Light Hospitality LLP v. Asstt. CIT, where a similar error was overlooked as procedural.
(v) Decision of the Court
The Bombay High Court quashed the impugned notices under Section 148 issued to AFTPL, declaring them invalid and non-est in law, as they were issued to a non-existent entity with full knowledge of the merger.
(vi) Reasoning Given by the Court for its Decision
The Department had knowledge of the merger since 2020; thus, issuing a notice to a non-existent entity in 2023 could not be justified.
Citing Maruti Suzuki (SC), the Court emphasized that such a notice is a substantive illegality, not a curable procedural error under Section 292B.
The explanation about system glitches was found to be insufficient to override legal principles.
The Court distinguished Sky Light Hospitality LLP, stating it applied only to peculiar facts and could not override Maruti Suzuki precedent.
Technical constraints in departmental software could not justify jurisdictional errors in law.
(vii) Full Citation of the Judgement Relied Upon by the Court for its Decision
Pr. CIT v. Maruti Suzuki India Ltd. [2019] 107 taxmann.com 375 (SC)
Uber India Systems (P.) Ltd. v. ACIT [2024] 168 taxmann.com 200 (Bom)
Alok Knit Exports Ltd. v. Dy. CIT [2021] 130 taxmann.com 457 (Bom)
Anokhi Realty (P.) Ltd. v. ITO [2023] 153 taxmann.com 275 (Guj)
Adani Wilmar Ltd. v. ACIT [2023] 150 taxmann.com 178 (Guj)
Vedanta Ltd. v. Pr. CIT [2025] 170 taxmann.com 833 (Del)
Sky Light Hospitality LLP v. Asstt. CIT [2018] 92 taxmann.com 93 (SC) – distinguished
(viii) Circumstances Where This Judgement Can Be Applied
When reassessment or any other notice is issued in the name of a company that has ceased to exist due to amalgamation or merger.
When the Revenue is aware of the merger but still proceeds to issue notices in the name of the dissolved entity.
In cases where the Department pleads technical limitations as justification for procedural lapses in statutory compliance.
To reinforce the principle that jurisdictional defects are fatal and cannot be saved by Section 292B.
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10.
"Faceless Reassessment and Concurrent Jurisdiction: Validity of Section 148 Notices Post-2021"
Kanwaljeet Kaur v. Assistant Commissioner of Income-tax [2025] 171 taxmann.com 174 (Delhi)
(i) Issue Decided by the Court
The Court dealt with multiple legal issues concerning reassessment proceedings, particularly:
Whether jurisdictional Assessing Officers (JAOs) can validly initiate reassessment under Section 148 post-introduction of Section 144B and the Faceless Reassessment Scheme, 2022.
Whether reassessment approvals granted by a Joint Commissioner after 01.04.2021 are valid.
Whether proceedings under Section 147 are permissible when Section 153C applies.
Whether reassessment notices are valid if issued contrary to time limits prescribed in pre- and post-2021 amended Section 149.
(ii) Facts Relating to the Issue
The petitioner challenged reassessment notices issued for various assessment years.
Notices were issued post-1.4.2021 and approvals were accorded by Joint Commissioners.
In some cases, material for reassessment was derived from search actions under Section 132, raising the question of applicability of Section 153C.
Petitioners argued reassessment was invalid due to procedural violations and lack of jurisdiction.
(iii) Arguments of the Appellant in Brief (Petitioner)
Faceless reassessment scheme under Section 144B removes jurisdiction from JAOs, hence notices by JAO were invalid.
Post-1.4.2021, approval under Section 151 must come from Principal Commissioner or higher authority, not Joint Commissioner.
Reassessment based on search material ought to be conducted under Sections 153A/153C, not Section 147.
Notices issued beyond time limits under old Section 149 (pre-2021 amendments) are invalid.
Notices without DIN are violative of CBDT Circulars and thus void.
(iv) Arguments of the Respondent in Brief (Revenue)
Section 144B is procedural; it does not oust the jurisdiction of the JAO to initiate reassessment.
JAOs and NFAC hold concurrent and complementary jurisdiction under the Act and relevant schemes.
Notices were issued based on information flagged through the Risk Management Strategy and Insight Portal, which is valid under Explanation 1 to Section 148.
Search-based reassessment under Section 147 is permissible if conditions of Section 153C are not fulfilled.
Technical violations do not vitiate jurisdiction if essential conditions are met.
(v) Decision of the Court
The High Court upheld the jurisdiction of JAOs under the faceless scheme, stating that their role remains concurrent and complementary with NFAC. However, it quashed reassessment notices issued with approvals from Joint Commissioners after 01.04.2021, holding such approvals invalid.
(vi) Reasoning Given by the Court for its Decision
Section 144B is procedural, aimed at efficient and transparent assessments through faceless means. It does not curtail the statutory jurisdiction of JAOs under Sections 147–151.
Notifications and schemes clarify concurrent jurisdiction of NFAC and JAO.
The Faceless Reassessment Scheme, 2022 envisions dual stages: formation of opinion by JAO and actual assessment by NFAC.
Any reassessment initiated after 01.04.2021 requires approval from Principal Commissioner or above if beyond the stipulated time frame.
Where reassessment is triggered by search or requisition, Section 153C becomes mandatory. Section 147 cannot be invoked unless the preconditions of Section 153C are not satisfied.
(vii) Full Citation of the Judgement Relied Upon by the Court
Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC)
Ram Balram Buildhome (P.) Ltd. v. ITO [2025] 171 taxmann.com 99 (Delhi)
T.K.S. Builders (P.) Ltd. v. ITO [2024] 167 taxmann.com 759 (Delhi)
Abhinav Jindal HUF v. ITO [2024] 166 taxmann.com 536 (Delhi)
Pr. CIT v. Naveen Kumar Gupta [2024] 168 taxmann.com 574 (Delhi)
Sanjay Gandhi Memorial Trust v. CIT (Exemptions) [2023] 455 ITR 164 (Delhi)
(viii) Circumstances Where This Judgement Can Be Applied
In determining validity of reassessment notices issued by jurisdictional officers post-implementation of the faceless scheme.
Where approval for reassessment is granted by a lower authority contrary to the revised Section 151 post-1.4.2021.
When reassessment is triggered by search, and applicability of Section 153C is in question.
For guidance on the role and procedural scope of JAOs and NFAC under the faceless scheme.