SHRI BHARAT BOMB vs. INCOME-TAX OFFICER

Facts

The petitioner, Shri Bharat Bomb, filed two writ petitions challenging notices issued under Sections 148A(3) and 148 of the Income Tax Act, 1961. The notices were issued by the Jurisdictional Assessing Officer (JAO). The Revenue, represented by the Income-Tax Officer and Additional/Joint Commissioner of Income Tax, submitted that the controversy was covered by previous judgments, including Sharda Devi Chhajer vs. The Income Tax Officer & Another and Hexaware Technologies Ltd. vs. Assistant Commissioner of Income-Tax. The Revenue also noted that a Special Leave Petition was filed before the Supreme Court against the Hexaware Technologies Ltd. judgment, and notice had been issued. The Revenue requested liberty to revive proceedings if the aforementioned judgments were set aside or modified.

Held

The High Court held that as long as the law declared in Sharda Devi Chhajer and Hexaware Technologies Ltd., which established that jurisdiction vests with the Faceless Assessing Officer, remains in effect, notices issued by the Jurisdictional Assessing Officer are not legally sustainable. Consequently, the impugned notices dated 24.06.2025 under Section 148A(3) and Section 148 of the Income Tax Act, 1961, along with all consequential proceedings, were quashed and set aside for being without jurisdiction. The Court clarified that liberty was reserved for the Revenue to proceed afresh through the Faceless Assessing Officer, strictly in accordance with law, subject to limitations and legal requirements. Furthermore, the Revenue was granted liberty to act in accordance with law if the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited were reversed, set aside, or materially modified by the Supreme Court. The petitioner stated that other grounds were not being pressed and undertook to withdraw the appeal already filed.

Key Issues

1. Whether notices issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO) are invalid, turning on the interpretation of provisions related to assessment proceedings and the scheme of faceless assessment under the Income Tax Act, 1961. Assessee's Contention: The petitioner implicitly argued that the notices were invalid due to being issued by the JAO, relying on the prevailing legal position established in prior High Court judgments. Revenue's Contention: The Revenue conceded that the controversy was covered by the judgments in Sharda Devi Chhajer and Hexaware Technologies Ltd., which held notices issued by the JAO to be invalid. However, the Revenue pointed out that an SLP was filed before the Supreme Court against the Hexaware judgment and sought liberty to revive proceedings if those judgments were overturned or materially altered.