Orissa High Court Grants Interim Relief to Taxpayer Against Non-Faceless IT Reassessment

The Orissa High Court on 2 February restrained the Income Tax Department from proceeding further on a reassessment notice issued to a Bhubaneswar-based taxpayer, after finding that the notice was not issued in accordance with the mandatory faceless procedure prescribed under the Income Tax Act, 1961.

The Division Bench of Chief Justice Harish Tandon and Justice M.S. Raman was hearing a writ petition filed by Bibekananda Parida, challenging an order passed under Section 148A of the Income Tax Act along with a reassessment notice issued under Section 148.

Section 148 empowers tax authorities to reopen assessments where income has escaped assessment, while Section 148A prescribes the procedure for issuing such a notice, while ensuring the taxpayer's right to be heard.

The petitioner contended that the reassessment proceedings initiated by the Income Tax Officer (ITO) were without jurisdiction, as the notices were not done through the faceless assessment framework mandated under Section 151A, read with Section 144B of the Act and the e-Assessment of Income Escaping Assessment Scheme, 2022.

Section 151A requires that reassessment proceedings be conducted through the faceless assessment system, and Section 144B provides the statutory basis for faceless assessments, specifying that notices and all communications with the taxpayer be issued electronically.

Counsel for the petitioner relied on earlier decisions of the Telangana High Court, including Venkatramana Reddy Patloola v. Deputy Commissioner of Income Tax and Deepanjan Roy v. Additional Deputy Commissioner of Income Tax, where reassessment proceedings were held to be vitiated because notices under Section 148 were not issued in a faceless manner. They also noted that in in Deepanjan Roy, the Supreme Court had dismissed the special leave petition filed by the Revenue against the High Court's decision.

In this context, the High Court Bench observed:

“The notice under Section 148 has been issued without adhering to mandatory faceless procedure in conformity with the provisions of Section 151A read with the e-Assessment of Income Escaping Assessment Scheme, 2022 and Section 144B of the IT Act.”

In view of this, the Court directed the assessing officer not to proceed further in connection with the impugned reassessment notice until the next date of listing.

The matter has been tagged with another case ( WP(C) No.23695 of 2025), and is now listed for 11 March 2026.

For the Petitioner: Chitrasen Parida, Advocate

For the Respondents: Avinash Kedia, Junior Standing Counsel