Madras High Court Quashes Section 148 & 148A Notices Issued by Jurisdictional Assessing Officer — Mark Studio India Private Limited Vs ITO

Background and Overview

A significant ruling has emerged from the Madras High Court concerning the validity of reassessment notices issued under the faceless assessment regime. The Division Bench examined a challenge brought against an earlier Single Judge order that had upheld notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148A and Section 148 of the Income Tax Act, 1961. The core issue revolved around whether such notices, which were required to be issued by the Faceless Assessing Officer (FAO), could survive legal scrutiny when issued by the JAO instead.

The Division Bench ultimately disagreed with the Single Judge's reasoning and quashed the impugned notices, aligning itself with the well-established legal position that had been consistently followed by the Madras High Court in a series of earlier decisions.

Case Details

The Single Judge's Order — What Was Challenged

The writ petition filed before the learned Single Judge was dismissed on the reasoning that even when a notice under Section 148A or Section 148 of the Income Tax Act, 1961 is issued by the Jurisdictional Assessing Officer rather than the Faceless Assessing Officer, such a notice would still retain its legal validity.

The assessee — Mark Studio India Private Limited — contested this finding before the Division Bench, contending that the Single Judge's interpretation ran contrary to a clear and consistent line of authority that had already been settled by coordinate benches of the Madras High Court.

Arguments Advanced Before the Division Bench

Assessee's Submissions

Counsel appearing on behalf of the assessee submitted that the Madras High Court, on multiple prior occasions, had followed the ruling of the Bombay High Court in Hexaware Technologies Limited v. Assistant Commissioner of Income Tax and categorically held that: