Faceless Tax Assessment Is Supreme: SC Bars Jurisdictional I-T Officers from Issuing Reassessment Notices

Moneylife Digital Team 03 September 2025

Economy & Nation

The Supreme Court has dismissed the income-tax (I-T) department’s special leave petition (SLP) against an order passed by the Bombay High Court (HC) which quashed a reassessment notice issued to Prakash Pandurang Patil for assessment year (AY)18–19. The apex court, while refusing to interfere, held that there was an unexplained delay of 248 days in filing the SLP and that the case also lacked merit.

The judgement reinforces the sanctity of the faceless assessment regime, making it clear that jurisdictional officers cannot issue reassessment notices once the scheme has been operationalised. It also reiterates that a sanction from the correct authority is a mandatory safeguard when notices are issued beyond the three-year limitation period.

A bench comprising justice JB Pardiwala and justice KV Viswanathan ruled that the HC’s decision needed no reconsideration. The order effectively upholds the HC’s interpretation of reassessment provisions under the faceless regime introduced by Section 151A of the I-T Act.

The HC had earlier quashed the reassessment notice dated 5 April 2022, observing that the jurisdictional assessing officer (JAO) lacked the authority to issue notices after the faceless regime came into force through a notification issued by the central board of direct taxes (CBDT) on 29 March 2022. Under the faceless scheme, only a faceless assessing officer (FAO) can issue such notices through an automated allocation system.

The HC relied on its decision in Hexaware Technologies Ltd vs ACIT (2024) 464 ITR 430 (Bom), where it held that there is no concurrent jurisdiction between JAO and FAO. Allowing both to function simultaneously would, the Court noted, 'render the faceless scheme redundant'.

The HC also underlined that since the reassessment proceedings were initiated after three years, a sanction had to be obtained under Section 151(ii) from a higher authority, namel,y the principal chief commissioner. However, in Mr Patil’s case, approval had been wrongly granted by the principal commissioner under Section 151(i), rendering the sanction invalid.

This reasoning was consistent with earlier Bombay HC rulings, including Siemens Financial Services Pvt Ltd vs Dy CIT (2023) 457 ITR 647 and Vodafone Idea Ltd vs Dy CIT (2024) 468 ITR 346, which stressed the importance of correct authority sanction in reassessment matters.

The Supreme Court, noting both the delay in filing and the lack of merit in the I-T department’s plea, refused to interfere. The order states: “There is a gross delay of 248 days in filing the SLP, which has not been satisfactorily explained. Even otherwise, we see no reason to interfere with the impugned order passed by the High Court.”

Accordingly, the SLP (C) diary No. 39689/2025 stood dismissed, affirming the Bombay HC’s ruling that the reassessment notice and consequent order under Section 148A(d) were void and without jurisdiction.

The ruling will serve as a precedent for similar disputes, ensuring that taxpayers are protected against invalid reassessment notices issued in violation of statutory provisions.

Comments