
Section 148 notice is sent in case of reassessment proceeding after the order u/s 148A . If you or your client received a notice u/s 148 of the Income Tax Act (the Act after this ) and the date of the notice is 29th March 2022 or after this , one must find out it is signed by the AO in his handwriting . He may have passed the order under section 148A(d), but after 29th March 2022 , he had not power to sign and issue the notice to you . Only national faceless Unit has the power.
If in any case you find so, raise an additional ground of appeal before CIT(Appeal) for such fundamental jurisdictional law.
Gazette Notification on Issue of 148 Notice
CBDT, published a notification in the Gazette of India on 29th March 2022, by which it authorised only the National Faceless Unit to issue notice u/s 148 of the Income Tax Act. Therefore, the LD AO had no authorisation under the Income Tax Act to issue notice u/s 148 from 29th March 2022 onwards. The Gazette notification via Notification No. 18/2022/F. No. 370142/16/2022-TPL(Part1) took away all the power to issue notice by an Assessing officer and authorized its automated system for issuance of notice u/s 148 in a faceless manner. See the excerpt of the new scheme effective from 29th March 2022. The excerpt from the said notice is given below :
3. Scope of the Scheme.––For the purpose of this Scheme,––
(a) assessment, reassessment or recomputation under section 147 of the Act,
(b) issuance of notice under section 148 of the Act, shall be through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in section 148 of the Act for issuance of notice, and in a faceless manner, to the extent provided in section 144B of the Act with reference to making assessment or reassessment of total income or loss of assessee. [Notification No. 18/2022/F. No. 370142/16/2022-TPL(Part1]
The law for the issue of notice u/s 148 has changed from 29th March 2022. Officers can only issue notice u/s 148 after 29th March 2022. The only way a notice u/s 148 can be issued is in a faceless manner by an automated system that CBDT has created.
Law on the Date of Issue of Notice Prevails
It is settled law that the law prevailing on the date of issuance of the notice under Section 148 has to be applied. Your kind attention is drawn to the decision of Allahabad High Court in the case of Foramer Vs. CIT (2001) 247 ITR 436 (All.), which was affirmed by the Supreme Court in (2003) 264 ITR 566 (SC). Para 18 of the High Court’s order holds this view (affirmed by the Supreme Court):
18. In our opinion, we have to see the law prevailing on the date of issue of the notice under Section 148, i.e., November 20, 1998. Admittedly, by that date, the new Section 147 has come into force, and, hence, in our opinion, it is the new Section 147 which will apply to the facts of the present case. In the present case, there was admittedly no failure on the part of the assessee to make a return or to disclose fully and truly all material facts necessary for the assessment. Hence, the proviso to the new Section 147 squarely applies, and the impugned notices were barred by limitation mentioned in the proviso.
Other case laws with similar views are:
- Varkey Jacob Co. Vs. CIT and Anr. (2002) 257 ITR 231 (Ker),
- Smt. N.Illamathy vs. ITO (2020) 275 taxman 25/195 CTR 543 (Mad)(HC),
- RK Upadhyay v Shanabhai, (1987) 166 ITR 163 (SC);
- CIT v Rameshwar Prasad, (1991) 188 ITR 291 (All HC);
- Dr. Onkar Dutt Sharma v CIT, (1967) 65ITR 359 (AllHC)].
Not doing so as directed under the new Notification dat 29.03.2023 , will convert the proceeding u/s 148 illegal and void.