A major question in tax litigation today is: who has the authority to issue reassessment notices under Section 148 of the Income-tax Act, 1961?
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The Delhi High Court has held that both the Jurisdictional Assessing Officer (JAO) and the Faceless Assessing Officer (FAO) have concurrent jurisdiction.
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The Bombay High Court, however, has taken a clear stand: only Faceless Assessing Officers can issue reassessment notices under the faceless regime.
In its latest judgment, Rajeshwar Bullion Trading v. Assistant CIT (W.P. No. 1441 of 2025, decided on 17 June 2025), the Bombay High Court reaffirmed that:
Reassessment notices under Section 148 must be issued strictly through the faceless mechanism under Section 151A. Any notice issued by the JAO is invalid.
This ruling, building on Hexaware Technologies Ltd. v. ACIT (2024) 464 ITR 430 (Bom.), cements the mandatory nature of faceless reassessments and creates a direct conflict with the Delhi High Court’s more flexible view.
The Legal Framework
Section 148 – Reassessment Notices
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Allows reopening of cases where income has escaped assessment.
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After the Finance Act, 2021, Section 148A requires prior inquiry and approval before issuing notice.
Section 151A – Faceless Assessment Scheme
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Introduced to remove personal interface and ensure transparency.
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Provides for risk-based allocation and team-based jurisdiction.
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Backed by CBDT Notification No. 18/2022 dated 29 March 2022 (e-Assessment of Income Escaping Assessment Scheme, 2022).
Why Faceless is Mandatory
Clause 3 of the 2022 scheme clearly states:
Assessment or reassessment under Section 147, and issuance of notice under Section 148, shall be through automated allocation and in a faceless manner, in accordance with Section 144B.
This leaves no room for JAOs to issue Section 148 notices independently.
Bombay High Court’s Consistent Stand
The Bombay High Court has repeatedly emphasized that only FAOs have jurisdiction:
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Hexaware Technologies Ltd. v. ACIT (2024): JAOs have no concurrent powers.
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Kairos Properties Pvt. Ltd. v. ACIT: JAO-issued notice quashed.
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Everest Kanto Cylinder Ltd. v. Dy./ACIT (473 ITR 148, Bom.): JAO notices invalid.
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Pravina Jagdish Patel v. ITO: Faceless reassessment is jurisdictional mandate.
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Rajeshwar Bullion Trading (2025): Extended principle even to AY 2017–18, where limitation was crucial.
Key Takeaway: In Maharashtra jurisdiction, faceless reassessment is not optional—it is statutory.
Delhi High Court’s Divergent View
The Delhi High Court continues to uphold concurrent jurisdiction of JAOs and FAOs, based on:
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Complementary role of JAOs with NFAC.
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Earlier CBDT notifications (2020) allowing concurrent powers.
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Harmonious interpretation of Section 144B with reassessment provisions.
This has created a clear judicial clash between Delhi and Bombay.
Comparative Judicial Positions
| Bombay High Court (Rajeshwar, Hexaware line) | Delhi High Court |
|---|---|
| Only FAO can issue Section 148 notices | JAO and FAO both can issue |
| Faceless scheme under Section 151A is mandatory | Faceless scheme is complementary |
| JAO-issued notices = void ab initio | JAO notices remain valid |
| Strictly aligned with legislative intent of transparency | Practical efficiency & continuity prioritised |
Implications for Taxpayers & Revenue
For Taxpayers & Practitioners
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Check the notice origin: If issued by JAO, it is challengeable.
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Remedy = Writ petition: Orders under Section 148A(d) are not appealable.
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Act quickly: Delay may reduce chances of success.
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Verify compliance: Ensure Section 148A procedure and approvals followed.
Impact on Pending Cases
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Many reassessments may be struck down if JAO-issued.
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Revenue may lose chance to reissue due to limitation.
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Taxpayers get a stronger shield against arbitrary reopening.
Supreme Court’s Role Ahead
Special Leave Petitions are already pending. The Supreme Court will soon settle:
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Whether faceless reassessments are exclusively mandatory, or
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JAOs can continue exercising concurrent powers.
Until then, Bombay’s rulings give taxpayers a solid defense strategy against JAO-issued notices.
Conclusion
The Rajeshwar Bullion Trading ruling marks another decisive step in India’s faceless tax regime. By holding that only FAOs can issue reassessment notices under Section 148, the Bombay High Court has:
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Strengthened taxpayer protection,
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Reinforced transparency under Section 151A, and
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Created clear divergence with Delhi’s concurrent-jurisdiction approach.
If you receive a reassessment notice under Section 148, check who issued it. If it is from your local JAO and not through the faceless system, it can be challenged as invalid.
