Punjab & Haryana High Court annuls Section 148 notice where NFAC was not the issuing authority

Background of the dispute

The Punjab and Haryana High Court examined a writ petition filed by Rudra Alloys Pvt. Ltd. Vs ACIT challenging a reassessment initiation for Assessment Year 2021-22. The controversy centred around a notice dated 28.06.2025 issued under Section 148 of the Income Tax Act 1961.

The assessee attacked the very jurisdiction of the officer who had issued the notice, asserting that under the faceless regime and the governing CBDT notification dated 29.03.2022, only the National Faceless Assessment Centre (NFAC) was empowered to issue notices under Section 148. Since the impugned notice did not emanate from NFAC, the assessee claimed that the proceedings were void ab initio.

The High Court was required to determine whether, in light of:

  • Section 151A,
  • the faceless assessment scheme, and
  • the CBDT notification dated 29.03.2022, particularly clause 3(b),

a Jurisdictional Assessing Officer could still validly issue a notice under Section 148, or whether that power stood exclusively vested in NFAC from the stage of issuance of the show cause notice.

In other words, the question was whether the initiation of reassessment proceedings by a non-NFAC authority was legally sustainable post-introduction of the faceless regime.

Reliance on earlier coordinate bench rulings

Counsel appearing for the assessee submitted that the matter was no longer res integra. The same point had already been adjudicated by a Coordinate Bench of the Punjab and Haryana High Court in:

  • Jatinder Singh Bhangu vs. Union of India and others, CWP No. 15745-2024 and connected matters, decided on 19.07.2024, and
  • Jasjit Singh vs. Union of India and others, CWP No. 21509 of 2023 and connected matters, decided on 29.07.2024.

In both those cases, the High Court had held that the faceless assessment framework applies from the stage of issuance of notice under Section 148 and Section 148A, and consequently, notices issued by Jurisdictional Assessing Officers, instead of NFAC, were without authority.

Counsel for the Revenue did not contest the position that the present controversy stood squarely covered by the above decisions. This non-dispute on facts and law effectively narrowed the adjudication to a straightforward application of the earlier rulings.

Statutory framework examined

The Coordinate Bench rulings, on which the present Bench relied, had undertaken a detailed analysis of:

  • Section 144B – which sets out the faceless assessment procedure, and
  • Section 151A – which provides for a faceless assessment scheme by authorising the Central Government to notify such scheme.

Additionally, the Court examined the CBDT notification dated 29.03.2022 issued under Section 151A. Clause 3(b) of this notification explicitly provides that the faceless assessment scheme extends to the issuance of notices under Section 148.

The Coordinate Bench in Jatinder Singh Bhangu had categorically held that: