PRADEEP NARAYAN SINGH YADAV S/O SHRI RAM NARAYAN SINGH YADAV vs. DEPUTY COMMISSIONER OF INCOME TAX

Facts

The petitioner, Pradeep Narayan Singh Yadav, challenged a notice dated April 11, 2023, issued under Section 148 of the Income Tax Act, 1961, by the Deputy Commissioner of Income Tax, Circle-2, Kota. The petitioner contended that the notice was issued by a Jurisdictional Assessing Officer (JAO) and not a Faceless Assessing Officer (FAO). The respondent revenue, represented by Mr. Shantanu Sharma, agreed that one of the grounds raised by the petitioner was covered by a previous judgment of the High Court. The revenue also noted that a Special Leave Petition (SLP) had been filed against the judgment in Hexaware Technologies Ltd. (supra), and notice had been issued by the Apex Court.

Held

The High Court quashed and set aside the notice dated April 11, 2023, issued under Section 148 of the Income Tax Act, 1961. The Court agreed with the petitioner's submission that such a notice, if issued by a JAO and not an FAO, would be invalid, following its own precedents in Shree Cement Limited and Sharda Devi Chhajer, and the Bombay High Court's decision in Hexaware Technologies Ltd. The Court granted liberty to the revenue to revive the notice if the Apex Court were to interfere with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. The petition was disposed of, and any re-assessment order passed pursuant to the quashed notice would also stand quashed and set aside. All other rights and contentions of the parties were kept open.

Key Issues

1. Whether a notice dated April 11, 2023, issued under Section 148 of the Income Tax Act, 1961, by a Jurisdictional Assessing Officer (JAO) is invalid and bad in law, as opposed to being issued by a Faceless Assessing Officer (FAO)? (Question of law and fact, concerning Section 148 of the Income Tax Act, 1961). Assessee's contention: The notice issued by the JAO is invalid, relying on the High Court's judgments in Shree Cement Limited Vs. Assistant Commissioner of Income-Tax & Others and Sharda Devi Chhajer Vs. The Income Tax Officer & Another. Revenue's contention: The revenue agreed that the ground was covered by the High Court's judgment. However, it was noted that an SLP was filed against the judgment in Hexaware Technologies Ltd. (supra), and notice had been issued. The revenue sought liberty to revive the notice if the Apex Court were to interfere with the aforementioned judgments.