International Tax Cases Not Exempt From Faceless Reassessment Regime: Bombay High Court Quashes S.148 IT Act Notice
The Bombay High Court quashed the reassessment notice issued under Section 148 of the Income Tax Act, 1961, stating that the reassessment notice did not follow the mandate that the Faceless Assessing Officer only has the jurisdiction to reopen the assessment and not the Jurisdictional Assessing Officer. It was further stated that even international taxation matters could be made subject...
The Bombay High Court quashed the reassessment notice issued under Section 148 of the Income Tax Act, 1961, stating that the reassessment notice did not follow the mandate that the Faceless Assessing Officer only has the jurisdiction to reopen the assessment and not the Jurisdictional Assessing Officer. It was further stated that even international taxation matters could be made subject to the faceless regime.
A Division Bench comprising Justices B.P. Colabawalla and Amit S. Jamsandekar was hearing a writ petition filed by the assessee, whereby the assessee challenged the validity of the Section 148 notice, on the ground that the notice was issued by the Jurisdictional Assessing Officer(AO) violating the mandate of the reassessment notice to be issued by the Faceless Assessing Officer(AO).
The Assessee argued that the case in hand was squarely covered by the Bombay High Court in Hexaware Technologies Ltd. v. ACIT [(2024) 162 taxmann.com 225 (Bom)], wherein the Court held that a reassessment notice issued by a Jurisdictional AO even after the introduction of the faceless regime is invalid.
The Revenue argued that the Hexaware judgment would not apply to the case in hand as its subject matter is international taxation. It was further argued that the Hexaware judgment was pending before the Supreme Court, and therefore, the writ could be kept pending till the final disposal by the Supreme Court.
The Bench opined that even in cases of Central Charges and International Taxation, the reassessment notice u/S 148 of the Act would have to be issued by the Faceless Assessing Officer following the faceless regime and not otherwise.
Also observed that the case in hand is not only squarely covered by the Hexaware judgment(supra) but also Abhin Anilkumar Shah Vs. Income-Tax Officer, International Taxation [(20240 166 taxmann.co.679 (Bombay)], whereby the Court held that a faceless regime under Section 148 of the Act would not exclude the central charges and international taxation charges.
The Bench also granted limited liberty to the Revenue to seek revival of the petition if the Hexaware judgment pending before the Supreme Court is set aside.
In view of the above, the Bench disposed of the writ petition by quashing the reassessment notice in favour of the assessee.
Case Number: Writ Petition (L) No. 32001 of 2025
Case Titled: Shabana Aijaz Khan Vs. Income Tax Officer, International Tax Ward- 3(1)(1), Mumbai & Ors.
Appearance for Petitioner: Mr. Rutuja Pawar, a/w Adv. Hetal Laghave, Adv. Sneha More, Adv. Pranaya Muthathyan
Appearance for Respondents: Adv. Subir Kumar, a/w Adv. Niyanta Trivedi