RAJESH TODWAL S/O PREM CHAND TODWAL vs. DGIT (INV.) RAJASTHAN, INCOME-TAX DEPARTMENT

Facts

The petitioner, Rajesh Todwal, filed a writ petition challenging a notice dated March 28, 2023, issued under Section 148 of the Income Tax Act, 1961, and a consequential assessment order dated March 7, 2024. The petitioner's counsel initially stated that the ground regarding the notice being issued by a Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO) had not been taken but sought permission to amend the petition if the Court insisted. The Revenue's counsel acknowledged that the Court had previously held such notices to be invalid and did not insist on a formal amendment. However, the Revenue sought liberty to revive the notice if the Supreme Court overturned the High Court's decisions in related cases.

Held

The High Court quashed and set aside the notice dated March 28, 2023, issued under Section 148 of the Income Tax Act, 1961. The Court reasoned that the notice was issued by a Jurisdictional Assessing Officer (JAO) and not a Faceless Assessing Officer (FAO), and that this Court, in cases like Shree Cement Limited, Sharda Devi Chhajer, and Hexaware Technologies Ltd., had held such notices to be invalid. Consequently, the assessment order dated March 7, 2024, which was consequential to the invalid notice, was also quashed and set aside. The Court granted liberty to the Revenue to revive the notice if the Supreme Court were to interfere with the aforementioned judgments. The petition was disposed of, keeping open all rights and contentions of the parties.

Key Issues

1. Whether a notice issued under Section 148 of the Income Tax Act, 1961, by a Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO) is valid? (Question of law) Assessee's Contention: The petitioner's counsel indicated that this ground would be taken, relying on previous judgments of the High Court. Revenue's Contention: The Revenue acknowledged the High Court's view that such notices are invalid but sought liberty to revive the notice if the Supreme Court were to interfere with the precedents relied upon by the High Court. The Revenue did not insist on a formal amendment to the petition.