Introduction
In a common order dated 28.10.2025, the High Court allowed a large batch of writ petitions concerning faceless reassessment under the Income Tax Act, 1961. The Division Bench of Justices Battu Devanand and A. Hari Haranadha Sarma held that after the insertion of Section 151A and the notification of the E-Assessment Scheme of Income Escaping Assessment Scheme, 2022 dated 29.03.2022, reassessment and issuance of notice under Section 148 must be through the mandatory faceless mechanism. The Jurisdictional Assessing Officer (“JAO”) could not issue the impugned notices or orders. The Court relied on Hexaware Technologies and Prakash Pandurang Patil, the latter upheld by the Supreme Court, and held the notices and orders bad and illegal. All writ petitions were allowed, and the impugned notices, orders, and consequential orders were set aside. No costs were awarded.
Facts
All writ petitions were filed under Article 226 of the Constitution of India, challenging notices issued under Section 148-A(b), orders passed under Section 148-A(d), and consequential notices issued under Section 148 by the respondents. Because the issue was one and the same, the High Court disposed of all matters by a common order.
The Court traced the legislative background. The Finance Act, 2018 provided for a scheme to impart greater efficiency, transparency, and accountability by eliminating the interface between the assessing officer and the assessee, optimizing resources through economies of scale and functional specialization, and introducing team-based assessment with dynamic jurisdiction. Accordingly, the E-Assessment Scheme, 2019 was notified on 12.01.2019. Initially applicable to assessment under Section 143(3), it later included proceedings under Section 144 and was modified into the Faceless Assessment Scheme, 2019.
The Finance Act, 2021 introduced Section 144B in the Income Tax Act, 1961 with effect from 01.04.2021, incorporating the faceless assessment scheme directly into the Act. The Finance Act, 2022 amended the provision to include proceedings under Section 147. Thus, the Faceless Assessment Scheme, 2019 became inapplicable from 01.04.2021.
With effect from 01.11.2020, Section 151A was introduced by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. It contemplates a scheme for assessment, reassessment, or recomputation under Section 147 and for issuance of notice under Section 148, conducting enquiries, issuing show-cause notices, passing orders under Section 148A, and granting sanction under Section 151. The Government then notified the E-Income Assessment Scheme, 2022 on 29.03.2022 for assessment, reassessment, or recomputation under Section 147 and for issuance of notice under Section 148 through automated allocation and in a faceless manner to the extent provided in Section 144B.
The procedure under Section 144B requires the National Faceless Assessment Centre (“NFAC”) to assign a selected case through automated allocation to an assessment unit, intimate the assessee, serve notice under Section 143(2) or 142(1), receive the assessee’s response, and follow the detailed process under Section 144B(1)(iv to XXXII).
Reasoning
The petitioners contended that after the introduction of the E-Assessment of Income Tax Escape Scheme, 2022, which came into force from 29.03.2022, it became mandatory for the revenue to conduct or initiate reassessment proceedings under Sections 147 and 148 in a faceless manner. Therefore, the impugned orders and notices issued under Section 148-A(d) and the notices under Section 148 issued by the JAO were not in accordance with the scheme and were liable to be set aside for lack of jurisdiction. They further argued that the arbitrary action of the revenue would frustrate the very object of the new reassessment regime brought in through the Finance Act, 2021 and cause hardship and harassment to the petitioners. In support, they relied on the judgment of the High Court of Judicature at Bombay dated 12.08.2024 in W.P.No.10749 of 2024, Prakash Pandurang Patil v. Income Tax Officer, Ward 5, Panvel & Others, which was upheld by the Supreme Court by order dated 18.08.2025 in Special Leave Petition (Civil) Diary No. 39689/2025.
The respondents, on the other hand, argued that the notification in S.O.1466(E) dated 29.03.2022 does not state whether the notice is to be issued by the NFAC or the JAO. The notification speaks of the scope of the scheme and lays down the legal contours of how the procedures are to be carried out. It states that the issuance of notices under Section 148 shall be through automated allocation in accordance with the risk management strategy and that the assessment shall be in a faceless manner to the extent provided in Section 144B. The Standing Counsel contended that both processes are being followed and that it would be incorrect to state that the issuance of notice by the JAO is without jurisdiction. It was also submitted that Section 144B does not provide for issuance of notice.
The High Court, however, analysed the statutory scheme and relied on the Bombay High Court’s decision in Hexaware Technologies, which held that there is no concurrent jurisdiction of the JAO and the Faceless Assessing Officer (“FAO”). Where specific jurisdiction is assigned, it is to the exclusion of the other, and the issuance of notice under Section 148 “shall be through automated allocation” is mandatory. The Bombay High Court in Prakash Pandurang Patil followed Hexaware Technologies and quashed notices issued by the JAO. The Supreme Court upheld Prakash Pandurang Patil in SLP(Civil) Diary No.39689/2025 dated 18.08.2025. The High Court of Telangana in Kanakanala Ravindra Reddy and other High Courts also allowed writ petitions on the same issue.
The High Court therefore held that the impugned notices and orders issued by the JAO, outside the faceless mechanism under Section 144B read with Section 151A and the 2022 Scheme, were bad and illegal. The JAO had no jurisdiction. The Court’s reasoning reinforces the mandatory nature of automated allocation and the absence of concurrent jurisdiction. The writ petitions were not an appeal from an ITAT order but a constitutional challenge under Article 226. Any Assessment Order passed by the JAO in such circumstances would be without jurisdiction. The legislative object of eliminating interface and introducing team-based assessment supports this conclusion.
Conclusion
All writ petitions were allowed. The impugned notices and orders and consequential orders were set aside. No costs were awarded. The High Court’s decision is significant for faceless reassessment under the Income Tax Act, 1961. It confirms that after the E-Income Assessment Scheme, 2022, notice under Section 148 must be issued through automated allocation under the faceless mechanism. The JAO cannot bypass Section 151A and Section 144B. Practitioners should verify the issuing authority when challenging reassessment notices. The ruling follows the Supreme Court’s affirmation of Prakash Pandurang Patil and strengthens the mandatory faceless regime.