MANISH JHANWAR vs. DEPUTY COMMISSIONER OF INCOME TAX

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CW/21510/2025HC Rajasthan2025:RJ-JD:48059-DB10 November 2025Author: PUSHPENDRA SINGH BHATI, ANUROOP SINGHI5 pages
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What did the High Court hold?

The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, is liable to be quashed and set aside. The Tribunal found that the facts of the present case were squarely covered by the judgment of a co-ordinate bench in Jaskaran Singh Brar Vs. Principle Commissioner of Income Tax (Central) Jaipur & Ors. The Tribunal agreed with the reasoning that the Gujarat High Court's judgment in Talati and Talati LLP was based on a different understanding of the facts and the law, particularly concerning the applicability of Explanation 2 to Section 148 in search cases. The Tribunal noted that the Bombay High Court's decision in Hexaware Technologies Ltd., which held notices issued by JAOs invalid, was distinguished by the Gujarat High Court. However, the Tribunal found that the Supreme Court had dismissed an SLP against a Telangana High Court order based on Venkataramana Reddy Patloola, which was in line with the Hexaware Technologies Ltd. judgment. The Tribunal quashed the notice with liberty to the revenue to revive it if the Apex Court were to interfere with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. The petitioner did not press other grounds.

What were the facts?

The petitioner, Manish Jhanwar, challenged a notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, by the Deputy Commissioner of Income Tax, Central Circle-1, Jaipur. The petitioner argued that the notice was invalid because it was issued by a Jurisdictional Assessing Officer (JAO) and not a Faceless Assessing Officer (FAO). The petitioner relied on previous judgments from the Rajasthan High Court in Shree Cement Limited and Sharda Devi Chhajer, which followed a Bombay High Court ruling in Hexaware Technologies Ltd., holding such notices issued by JAOs to be invalid. The respondent revenue did not dispute the petitioner's submission.

What were the issues?

1. Whether a notice issued under Section 148 of the Income Tax Act, 1961, by a Jurisdictional Assessing Officer (JAO) is invalid, as opposed to being issued by a Faceless Assessing Officer (FAO)? (Question of law) Assessee's Contention: The assessee contended that the notice dated March 26, 2025, issued under Section 148 of the Act is invalid because it was issued by a JAO and not an FAO. The assessee relied on the Rajasthan High Court's decisions in Shree Cement Limited and Sharda Devi Chhajer, which in turn relied on the Bombay High Court's judgment in Hexaware Technologies Ltd., holding that notices issued by JAOs are invalid. Revenue's Contention: The revenue did not refute the petitioner's submission. However, the judgment discusses the Gujarat High Court's differing view in Talati and Talati LLP, which did not interfere with a notice issued by a JAO, directing the assessee to file a reply. The judgment also notes that the Gujarat High Court's reasoning was based on a different understanding of the applicability of Explanation 2 to Section 148 and the e-assessment scheme.

Which sections of the Income-tax Act were involved?

Section 148,Section 153A,Section 132,Section 132A,Section 151A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2025:RJ-JD:48059-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 21510/2025 Manish Jhanwar S/o Shri Jugal Kishore Jhanwar, Aged About 47 Years, Resident Of Khasra No. 1087/740, Opp.rajesh Motors, Ii Phase Basni, Jodhpur 342005,rajasthan ----Petitioner Versus Deputy Commissioner Of Income Tax, Central Circle - 1,jaipur Having Its Address Aayakar Bhawan, Paota C Road, Jodhpur, Rajasthan, 342010 ----Respondent For Petitioner(s) : Mr. Harsh Vardhan Singh For Respondent(s) : Mr. K.K. Bissa HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI HON'BLE MR. JUSTICE ANUROOP SINGHI

Order 10/11/2025

1.

Learned counsel for the petitioner Mr. Harsh Vardhan Singh submits that the controversy involved in this matter is squarely covered by the judgment dated 24.09.2025 passed by the co- & Ors.; D.B. Civil Writ Petition No.18987/2025, which is reproduced hereinbelow:

"

1.

All office objections waived.

2.

Mr. Kothari submits that petitioner is unhappy with notice dated 26th March 2025 issued under Section 148 of the Income Tax Act, 1961 (for short ‘the Act’).

3.

Mr. Kothari further submits that apart from various grounds taken in the petition, one of the grounds is that notice has been issued by Jurisdictional Assessing Officer (Uploaded on 11/11/2025 at 04:55:44 PM) (Downloaded on 28/10/2026 at 12:31:24 AM)

[2025:RJ-JD:48059-DB] (2 of 5) [CW-21510/2025] (JAO) and not Faceless Assessing Officer (FAO). He also submits that this Court in Shree Cement Limited vs. Assistant Commissioner of Income-Tax & Others and Sharda Devi Chhajer vs. The Income Tax Officer & Commissioner of Income-Tax, Circle 15(1)(2) has held (Uploaded on 11/11/2025 at 04:55:44 PM) (Downloaded on 28/10/2026 at 12:31:24 AM)

[2025:RJ-JD:48059-DB] (3 of 5) [CW-21510/2025] High Court has taken cognizance of the contention that pre- requisite conditions before issuance of notice under Section 148, as provided in Explanation 2 of Section 148 would require human application of mind and cannot be fulfilled by algorithm under the Faceless Regime.

8.

The decision of the Division Bench of the Bombay High Court in the case of Hexaware Technologies Ltd. (supra) has been distinguished as having been rendered in a case, which falls within the arena of Explanation 1 to Section 148 and not where Explanation 2 to Section 148 of the Income Tax Act' 1961, would be attracted.

9.

It is pertinent to note that the Gujarat High Court was Tax Officer, International Tax Ward Circle-4(2)(1), Mumbai and Ors. where the orders dated 31st March 2021 and 06th September 2021 issued by the CBDT creating exception for the assessment proceedings undertaken by the International taxation charges/Central Charges were subject matter of deliberation.

10.

In Abhin Anilkumar Shah (supra) the Court held that said orders dated 31st March 2021 and 06th September 2021 issued by the CBDT only carve out exception in relation to the assessment proceedings. What has been done by order dated 06th September 2021 is to modify the order dated 31st March 2021 to the extent of what is set out in paragraph 3 thereof, namely, that in addition to such exceptions to the applicability of the faceless mechanism to assessment orders in relation to Central Charges and International Tax Charges, an additional exception was added, namely, to the assessment order in cases where pendency could not be created on ITBA because of technical reasons or cases not having a PAN, as the case may be. Thus, the scheme as framed under section 151A and notified under the notification dated 29th March 2022 does not include the applicability, inclusion or even reference to the orders dated 31st March 2021 and 06th September 2021. It was further held that it would be doing violence to the language of the notification/scheme dated 29th March (Uploaded on 11/11/2025 at 04:55:44 PM) (Downloaded on 28/10/2026 at 12:31:24 AM)

[2025:RJ-JD:48059-DB] (4 of 5) [CW-21510/2025] 2022 to read into such notification what has not been expressly provided for and/or something which is kept came to be dismissed by the Hon’ble Supreme Court vide order dated 16th July 2025 in SLP (Civil) Diary No. 33956/2025 stating the following- 1. “Delay condoned.

2.

Exemption Application is allowed.

3.

Having heard the learned counsel appearing for the petitioners – Revenue and having gone through the materials on record, we find no good reason to interfere with the impugned order passed by the High Court.

3.

The Special Leave Petition is, accordingly, dismissed.

4.

Pending applications, if any, shall also stand disposed of.”

13.

Thus the judgment passed by the Gujarat High Court is not based on the reading of notification dated 29th March 2022 along with orders dated 31st March 2021/ 06th September 2021 but is based on the simple reading of Explanation 2 to Section 148 along with understanding that the pre-requisites for issuing notice under Section 148 in search cases cannot be met by the FAO. With due respect, we do not agree.

14.

In these circumstances, notice dated 26th March 2025 passed under Section 148 of the Act is liable to be quashed and set aside. (Uploaded on 11/11/2025 at 04:55:44 PM) (Downloaded on 28/10/2026 at 12:31:24 AM)

[2025:RJ-JD:48059-DB] (5 of 5) [CW-21510/2025]

15.

At this stage, Mr. Bissa submits that in judgment of Hexaware Technologies Ltd. (supra), Revenue has preferred a Special Leave Petition and notice has been issued. Counsel states that in view of the law as it stands today, Court may grant the prayer of petitioner but in case the Apex Court interferes with judgment in Hexaware Technologies Ltd. (supra), Sharda Devi Chhajer (supra) or Shree Cement Limited (supra), then Revenue should be given liberty to revive the notice issued under Section 148 of the Act.

16.

In view of above, counsel for petitioner states that other grounds raised are not being pressed upon and they will be taken at appropriate stage, if required.

17.

Therefore, keeping open all rights and contentions of parties, we quash and set aside notice dated 26th March 2025 passed under Section 148 of the Act with liberty as prayed.

18.

Petition disposed.

19.

Consequently, all pending applications, if any, also stand disposed."

2.

Learned counsel for the respondent is not in a position to refute the above submission.

3.

In view of the above, the present writ petition is disposed of on the same terms as laid down in Jaskaran Singh Brar (supra). (ANUROOP SINGHI),J (DR.PUSHPENDRA SINGH BHATI),J 1-Sudheer/- Powered by TCPDF (www.tcpdf.org) (Uploaded on 11/11/2025 at 04:55:44 PM) (Downloaded on 28/10/2026 at 12:31:24 AM)

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