RAJANI POTALIA vs. THE DEPUTY COMMISSIONER OF INCOME TAX

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CW/24541/2025HC Rajasthan2025:RJ-JD:54243-DB16 December 2025Author: PUSHPENDRA SINGH BHATI, SANJEET PUROHIT3 pages
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What did the High Court hold?

The Rajasthan High Court held that so long as the law declared in Sharda Devi Chhajer (supra) and Hexaware Technologies Ltd. (supra) continues to hold that jurisdiction vests with the Faceless Assessing Officer, the issuance of notices by the Jurisdictional Assessing Officer would not be legally sustainable. Accordingly, the impugned notice dated 18.03.2025 issued under Section 148A(3) of the Income Tax Act, 1961, along with all consequential proceedings, were quashed and set aside for being without jurisdiction. The Court clarified that liberty was reserved in favour of the respondent-Revenue to proceed afresh through the Faceless Assessing Officer, strictly in accordance with law and the prevailing statutory framework, subject to limitation and other legal requirements. Furthermore, liberty was granted to the respondent-Revenue to act in accordance with law if the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited are reversed, set aside, or materially modified by the Hon’ble Supreme Court. The petitioner stated that other grounds were not being pressed and undertook to withdraw the appeal already filed.

What were the facts?

The petitioner, Rajani Potalia, filed a writ petition challenging a notice dated 18.03.2025 issued under Section 148A(3) of the Income Tax Act, 1961. The respondent was the Deputy Commissioner of Income Tax, Central Circle-2, Jodhpur. The petitioner argued that the notice was invalid. The respondent conceded that the issue was covered by previous judgments, including Sharda Devi Chhajer vs. The Income Tax Officer & Another and Hexaware Technologies Ltd. vs. Assistant Commissioner of Income-Tax. However, the respondent noted that a Special Leave Petition had been filed before the Supreme Court against the Hexaware Technologies Ltd. judgment, and liberty was sought to revive proceedings if the said judgments were set aside.

What were the issues?

1. Whether notices issued by the Jurisdictional Assessing Officer (JAO), instead of the Faceless Assessing Officer (FAO), are invalid under Section 148A of the Income Tax Act, 1961? Assessee's Contention: The petitioner argued that the notice issued by the JAO was invalid. Revenue's Contention: The respondent conceded that the controversy was covered by the judgment in Sharda Devi Chhajer vs. The Income Tax Officer & Another, which followed Hexaware Technologies Ltd. vs. Assistant Commissioner of Income-Tax. The respondent further submitted that a Special Leave Petition was pending before the Supreme Court against the Hexaware judgment and sought liberty to revive proceedings if the said judgments were set aside or materially modified.

Which sections of the Income-tax Act were involved?

Section 148A

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Cause title — parties, addresses and appearances
[2025:RJ-JD:54243-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 24541/2025 Rajani Potalia W/o Moola Ram Choudhary, Aged About 46 Years, 62-63, Udhyog Nagar, Second Phase, Basni, Jodhpur- 342001, Rajasthan. Pan- Ahhpp 3474H. ----Petitioner Versus The Deputy Commissioner Of Income Tax, Central Circle- 2, Jodhpur Having Its Address At Aayakar Bhawan, Paota C Road, Jodhpur. ----Respondent For Petitioner(s) : Mr. Harshvardhan Singh Chundawat. For Respondent(s) : Mr. K.K. Bissa. HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI HON'BLE MR. JUSTICE SANJEET PUROHIT

Order 16/12/2025

1.

Mr. K.K. Bissa, learned counsel appearing for the respondents, at the outset, fairly submits that the controversy involved in the present writ petitions is squarely covered by the judgment of this Court in Sharda Devi Chhajer vs. The Income Tax Officer & Another [2025 SCC OnLine Raj 3386], which has followed the judgment of the Bombay High Court in Hexaware Technologies Ltd. vs. Assistant Commissioner of Income-Tax, Circle- 15(1)(2) [2024] 162 taxmann.com 225 (Bom.). It is held therein that notices issued by the Jurisdictional Assessing Officer (JAO), instead of the Faceless Assessing Officer, are invalid.

2.

Learned counsel, however, submits that the respondents are acting under the mandate of the directions issued by the learned ITAT. He further submits that against the judgment in Hexaware (Uploaded on 20/12/2025 at 03:51:44 PM) (Downloaded on 28/10/2026 at 12:35:55 AM)

[2025:RJ-JD:54243-DB] (2 of 3) [CW-24541/2025] Technologies Ltd. (supra), the Revenue has preferred a Special Leave Petition before the Hon’ble Supreme Court and notice has been issued. Learned counsel, therefore, submits that while the prayer of the petitioner may be granted in view of the prevailing legal position, liberty be reserved in favour of the Revenue to revive the proceedings in the event the judgments in Hexaware Technologies Ltd. (supra), Sharda Devi Chhajer (supra) or Shree Cement Limited (supra) are set aside or materially modified by the Hon’ble Apex Court.

3.

This Court finds that so long as the law declared in Sharda Devi Chhajer (supra) and Hexaware Technologies Ltd. (supra) holding that the jurisdiction vests with the Faceless Assessing Officer continues to hold the field, issuance of notices by the Jurisdictional Assessing Officer would not be legally sustainable.

4.

Accordingly, this Court directs that, keeping open all rights and contentions of parties, the impugned notice dated 18.03.2025 (Annexure-2) issued under Section 148A(3) of the Income Tax Act, 1961, along with all proceedings consequential thereto, are hereby quashed and set aside, being without jurisdiction.

5.

However, this Court clarifies that liberty is reserved in favour of the respondent-Revenue to proceed afresh through the Faceless Assessing Officer (FAO), strictly in accordance with law and the prevailing statutory framework, subject to limitation and other legal requirements.

6.

It is further made clear that in the event the judgments in Hexaware Technologies Ltd. (supra), Sharda Devi Chhajer (Uploaded on 20/12/2025 at 03:51:44 PM) (Downloaded on 28/10/2026 at 12:35:55 AM)

[2025:RJ-JD:54243-DB] (3 of 3) [CW-24541/2025] (supra) or Shree Cement Limited (supra) are reversed, set aside, or materially modified by the Hon’ble Supreme Court, the respondent-Revenue shall be at liberty to act in accordance with law.

7.

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. Further, learned counsel for the petitioner undertakes to apply within two weeks to withdraw the appeal already filed.

8.

Undertaking accepted.

9.

Accordingly, the writ petitions stand disposed of. All pending applications, if any, also stand disposed of. (SANJEET PUROHIT),J (DR. PUSHPENDRA SINGH BHATI),J 161-sumer/- Powered by TCPDF (www.tcpdf.org) (Uploaded on 20/12/2025 at 03:51:44 PM) (Downloaded on 28/10/2026 at 12:35:55 AM)

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