Income Tax Officer vs Vimal International P. Ltd.

PER VIKAS AWASTHY, JM:

This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 22.09.2025, for Assessment Year 2018-19.

The facts of the case as emanating from records are: The Assessing Officer (AO) in assessment proceedings u/s.147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) made addition of Rs.19,80,990/- u/s.69C of the Act as unexplained expenditure vide order dated 25.03.2023. The assessee carried the issue in appeal before the CIT(A) inter alia assailing validity of reopening of assessment by raising additional grounds of appeal challenging that notice u/s.148 of the Act was issued by the Jurisdictional Assessing Officer (JAO), whereas, assessment order was passed by Faceless Assessing Officer (FAO). The CIT(A) held that notice u/s.148 of the Act cannot be issued by JAO after introduction of Faceless Assessment u/s.151A r.w.s144B of the Act w.e.f 29.03.2022 and quashed the assessment holding it to be invalid and illegal. To come to said conclusion, he placed reliance on following decisions:-

No findings were given by the CIT(A), on merits of the addition.

Now, the Revenue is in appeal before the Tribunal assailing findings of the CIT(A) on jurisdictional issue. Shri Keshav Kishore Anand representing the department submits that the Jurisdictional High Court in the case of TKS Builders P. Ltd. vs. ITO, 167 taxmann.com 759 (Delhi) has held that JAO and FAO have concurrent jurisdiction after introduction of Faceless Reassessment Scheme, 2022.

Submissions made by ld. DR heard, orders of the authorities below examined. The solitary issue for consideration before the Tribunal is whether after introduction of Faceless Reassessment Scheme, 2022, the JAO has jurisdiction to issue notice u/s.148 of the Act initiating reassessment proceedings?

The CIT(A) has decided this issue in favour of the assessee by placing reliance on the decisions rendered by various non-Jurisdictional High Courts. Whereas, the jurisdictional High Court in the case TKS Builders P. Ltd. vs. ITO (supra) has held that JAO and FAO have concurrent jurisdiction under Faceless Reassessment Scheme, 2022. The JAO is not completely deprived of his powers to assesse or reassess merely because section 144B of the Act and Faceless Reassessment Scheme, 2022 have been introduced. Similar view has been taken by Hon’ble Delhi High Court in the case of Yukti Export vs. ITO, 179 taxmann.com 619. The established Law of Precedent is that the decision rendered by Hon’ble Jurisdictional High Court is binding on subordinate judicial/quasi-judicial authorities.

In light of the above stated legal position, the impugned order is set aside and appeal is restored to the CIT(A) for denovo adjudication of appeal on merits of the addition by passing a speaking order, in accordance with law.

In the result, appeal of the Revenue is allowed for statistical purpose.