Telangana High Court Invalidates Reassessment by Jurisdictional Officers Post Faceless Assessment Scheme — Mohammed Ibrahim Ali vs. Assessment Unit

Overview of the Ruling

A Division Bench of the Telangana High Court, comprising Justices Aparesh Kumar Singh and G. M. Mohiuddin, delivered a landmark ruling in the batch of writ petitions led by Mohammed Ibrahim Ali vs. Assessment Unit, National Faceless Assessment Centre. The Court categorically held that reassessment proceedings launched by Jurisdictional Assessing Officers (JAOs) subsequent to the operationalization of the Faceless Assessment Scheme on 29.03.2022 were fundamentally lacking in jurisdiction and therefore liable to be annulled.

This ruling adds significant weight to an already growing body of judicial opinion across India that has consistently held the same position — that once the faceless reassessment regime was formally put into operation, the old jurisdictional framework for initiating reopening proceedings ceased to have any legal force.

Background and Context of the Dispute

The Statutory Framework in Question

The central controversy arose from the issuance of notices under Section 148A and Section 148 of the Income-tax Act, 1961 by Jurisdictional Assessing Officers, notwithstanding the fact that the Central Government had already notified the e-Assessment of Income Escaping Assessment Scheme, 2022 under Section 151A of the Income-tax Act, 1961 vide Notification No. 18 of 2022, effective from 29.03.2022.

The assessees — a diverse group comprising individuals, companies, cooperative societies, and other legal entities — had received such notices for various assessment years after the said date. They challenged these proceedings before the Telangana High Court, raising the fundamental objection that the JAO had no authority to initiate reassessment once the Faceless Assessing Officer (FAO) mechanism had been put in place under the statutory scheme.

Nature of Proceedings Challenged

The batch of writ petitions collectively assailed:

  • Notices issued under Section 148A(b) of the Income-tax Act, 1961
  • Orders passed under Section 148A(d) of the Income-tax Act, 1961
  • Notices issued under Section 148 of the Income-tax Act, 1961
  • Consequential reassessment orders passed thereafter
  • Penalty proceedings arising out of such reassessments

All impugned proceedings shared one common thread — they were initiated by JAOs after 29.03.2022, the effective date of the Faceless Scheme.

Whether, following the notification of the Faceless Assessment Scheme under Section 151A of the Income-tax Act, 1961 on 29.03.2022, reassessment proceedings under Section 148A and Section 148 could still be validly initiated by the Jurisdictional Assessing Officer rather than the Faceless Assessing Officer?

The Telangana High Court answered this question unequivocally in favour of the assessees.

Submissions on Behalf of the Assessees

The learned counsel appearing for the petitioners placed strong reliance on the earlier coordinate bench decisions of the Telangana High Court, most notably:

  • Kankanala Ravindra Reddy v. Income Tax Officer [(2023) 156 taxmann.com 178 (Telangana)]
  • The subsequent order dated 28.04.2025 passed in W.P. No. 26304 of 2024, which had followed the ratio in Kankanala Ravindra Reddy

Counsel submitted that the present batch of writ petitions was squarely covered by these earlier rulings and sought disposal on identical terms, including setting aside all impugned proceedings.

Multi-Jurisdictional Judicial Support

The petitioners further buttressed their position by relying on a broad spectrum of High Court judgments from across the country, including:

Bombay High Court:

  • Hexaware Technologies Ltd. vs. Assistant Commissioner of Income Tax and others [(2024) 464 ITR 430 (Bom)]
  • Abhin Anilkumar Sah vs. Income Tax Officer (International Taxation) and others [(2024) 468 ITR 350 (Bom)]
  • Bank of India vs. Assistant Commissioner of Income Tax and others [(2024) 468 ITR 350 (Bom)]