RAJIV SOMANI vs. INCOME TAX OFFICER WARD 1

Facts

The petitioner, Rajiv Somani, challenged a notice issued under Section 148 of the Income Tax Act, 1961. The primary contention was that the notice was issued by the Jurisdictional Assessing Officer (JAO) and not by a Faceless Assessing Officer (FAO). The respondent, Income Tax Officer Ward 1, Bhilwara, issued the notice. The petitioner relied on decisions in Hexaware Technologies Ltd. vs. Assistant Commissioner of Income-tax, Circle 15(1)(2), Sharda Devi Chhajer vs. The Income Tax Officer & Another, and Shree Cement Limited vs. Assistant Commissioner of Income-Tax & Others. The revenue acknowledged the petitioner's submission regarding the notice issuance but noted that a Special Leave Petition (SLP) was filed in the Hexaware Technologies case, and notice had been issued by the Apex Court. The revenue requested liberty to revive the notice if the Apex Court's decision in the cited cases was altered.

Held

The Rajasthan High Court at Jodhpur quashed and set aside the notice dated 16.04.2023 issued under Section 148 of the Income Tax Act, 1961. The Court followed the precedent set in Hexaware Technologies Ltd. vs. Assistant Commissioner of Income-tax, Circle 15(1)(2), Sharda Devi Chhajer vs. The Income Tax Officer & Another, and Shree Cement Limited vs. Assistant Commissioner of Income-Tax & Others, which dealt with the validity of notices issued by JAOs instead of FAOs. The Court granted the revenue liberty to revive the notice issued under Section 148 if the Apex Court were to interfere with the judgments in the aforementioned cases. The Court also clarified that the petitioner did not press other grounds raised in the petition. The petition was disposed of with these directions.

Key Issues

1. Whether a notice issued under Section 148 of the Income Tax Act, 1961, by the Jurisdictional Assessing Officer (JAO) is valid, or if it must be 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 under Section 148 was issued by the JAO and not the FAO, which is invalid. The assessee relied on Hexaware Technologies Ltd. vs. Assistant Commissioner of Income-tax, Circle 15(1)(2), Sharda Devi Chhajer vs. The Income Tax Officer & Another, and Shree Cement Limited vs. Assistant Commissioner of Income-Tax & Others. Revenue's Contention: While acknowledging the petitioner's argument, the revenue highlighted that an SLP was filed in the Hexaware Technologies case, and notice had been issued. The revenue sought liberty to revive the Section 148 notice if the Apex Court's decision in the cited cases was overturned. The revenue did not press other grounds raised by the petitioner.