M/S TOWN ART vs. THE ASST. COMMISSIONER OF INCOME TAX

CW/24547/2025HC Rajasthan2025:RJ-JD:54215-DB16 December 2025Author: PUSHPENDRA SINGH BHATI, SANJEET PUROHIT3 pages

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What did the High Court hold?

The Court held that so long as the law declared in Sharda Devi Chhajer and Hexaware Technologies Ltd., which posits that jurisdiction vests with the Faceless Assessing Officer, continues to hold the field, notices issued by the Jurisdictional Assessing Officer are not legally sustainable. Consequently, the impugned notice dated 19.03.2025 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 is reserved for the respondent-Revenue to proceed afresh through the Faceless Assessing Officer (FAO) in accordance with law, subject to limitations and legal requirements. Furthermore, the Revenue is at liberty 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 are not being pressed and undertook to withdraw the appeal already filed.

What were the facts?

The petitioner, M/s Town Art, through its partner Moola Ram Choudhary, filed a writ petition challenging a notice dated 19.03.2025 issued under Section 148A(3) of the Income Tax Act, 1961. The respondent is the Assistant Commissioner of Income Tax, Circle-3, Jodhpur. The respondent's counsel submitted that the issue is covered by the High Court's judgment in Sharda Devi Chhajer vs. The Income Tax Officer & Another, which followed the Bombay High Court's decision in Hexaware Technologies Ltd. vs. Assistant Commissioner of Income-Tax. These judgments held that notices issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO) are invalid. The Revenue had filed a Special Leave Petition against the Hexaware Technologies Ltd. judgment, and notice had been issued by the Supreme Court.

What were the issues?

1. Whether notices issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO) are invalid, turning on the interpretation of the Income Tax Act, 1961, concerning the faceless assessment scheme. Assessee's Contention: The petitioner implicitly relies on the principle that notices must be issued by the competent authority, which, in the context of the faceless assessment scheme, should be the FAO. The petitioner seeks quashing of the notice based on the prevailing High Court judgments. Revenue's Contention: The respondent acknowledges that the issue is covered by the High Court's judgment in Sharda Devi Chhajer and Hexaware Technologies Ltd. However, the Revenue points out that a Special Leave Petition has been filed before the Supreme Court against the Hexaware Technologies Ltd. judgment, and notice has been issued. Therefore, the Revenue requests that while the petitioner's prayer may be granted, liberty be reserved to revive proceedings if the aforementioned judgments are set aside or materially modified by the Apex Court.

Which sections of the Income-tax Act were involved?

Section 148A(3)

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Cause title — parties, addresses and appearances

[2025:RJ-JD:54215-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 24547/2025 M/s Town Art, Through Its Partner Moola Ram Choudhary S/o Goma Ram Choudhary, Age About 63 Years, 62-63, Udhyog Nagar, Second Phase, Basni, Jodhpur- 342001, Rajasthan. Pan Aacft8390C ----Petitioner Versus The Asst. Commissioner Of Income Tax, Circle -3, Jodhpur Having Its Address At Aayakar Bhawan, Paota C Road Jodhpur. ----Respondent For Petitioner(s) : Mr. Harshvardhan Singh Chundawat. For Respondent(s) : Mr. Sunil Bhandari. HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI HON'BLE MR. JUSTICE SANJEET PUROHIT

Order 16/12/2025

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.

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 03:53:10 PM) (Downloaded on 28/10/2026 at 12:36:12 AM)

[2025:RJ-JD:54215-DB] (2 of 3) [CW-24547/2025] 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.

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.

Accordingly, this Court directs that, keeping open all rights and contentions of parties, the impugned notice dated 19.03.2025 (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.

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.

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 03:53:10 PM) (Downloaded on 28/10/2026 at 12:36:12 AM)

[2025:RJ-JD:54215-DB] (3 of 3) [CW-24547/2025] (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.

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.

Undertaking accepted.

Accordingly, the writ petitions stand disposed of. All pending applications, if any, also stand disposed of. (SANJEET PUROHIT),J (DR. PUSHPENDRA SINGH BHATI),J 166-sumer/- Powered by TCPDF (www.tcpdf.org) (Uploaded on 20/12/2025 at 03:53:10 PM) (Downloaded on 28/10/2026 at 12:36:12 AM)

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