HARJESH NARANIYA S/O CHANDA LAL NARANIYA vs. ASSISTANT COMMISSIONER OF INCOME TAX

Facts

The petitioner, Harjesh Naraniya, filed a writ petition challenging a notice issued under Section 148 of the Income Tax Act, 1961. The petitioner's counsel, Mr. Siddharth Ranka, initially stated that due to inadvertence, certain grounds were not raised, specifically that the notice under Section 148 was issued by the Jurisdictional Assessing Officer (JAO) and not the Faceless Assessing Officer (FAO). The respondent's counsel, Mr. Siddharth Bapna, acknowledged this as a potentially valid ground. The High Court noted its own recent judgment in Shree Cement Limited, which relied on the Bombay High Court's decision in Hexaware Technologies Ltd., holding that a Section 148 notice issued by the JAO instead of the FAO is bad in law.

Held

The Tribunal held that the notice issued under Section 148 of the Income Tax Act, 1961, by the Jurisdictional Assessing Officer (JAO) and not the Faceless Assessing Officer (FAO) is bad in law and must be quashed and set aside. This decision was based on the settled position of law, as articulated in the High Court's recent judgment in Shree Cement Limited, which in turn relied on the Bombay High Court's decision in Hexaware Technologies Ltd. The Court found that the notice dated 25th March 2023 was indeed issued by the JAO, making it invalid. Consequently, the Court quashed and set aside the notice. The Court explicitly stated that it was not delving into other grounds raised in the petition, keeping open the possibility for parties to revisit these issues if the Supreme Court were to interfere with the decision in Hexaware Technologies Ltd. The operative direction was to quash the notice.

Key Issues

1. Whether a notice issued under Section 148 of the Income Tax Act, 1961, by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO) is invalid? (Question of law) Assessee's Contention: The petitioner argued that the notice under Section 148 was issued by the JAO and not the FAO, rendering it bad in law. This ground was initially not explicitly raised due to inadvertence but was subsequently brought to the Court's attention. Revenue's Contention: The respondent's counsel conceded that if the Court allows the petitioner to raise this ground, it would be a valid one. The respondent did not otherwise argue against the invalidity of the notice on this specific ground.