M/S TOWN ART vs. THE ASST. COMMISSIONER OF INCOME TAX
What did the High Court hold?
The Court held that as long as the law declared in Sharda Devi Chhajer and Hexaware Technologies Ltd., which states that jurisdiction vests with the Faceless Assessing Officer, continues to hold, notices issued by the Jurisdictional Assessing Officer are not legally sustainable. Consequently, the impugned notice dated March 19, 2025, issued under Section 148A(3) of the Income Tax Act, 1961, and 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, strictly in accordance with law and the prevailing statutory framework, subject to limitations and other 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 were not being pressed and would be taken up at an appropriate stage, and undertook to withdraw a previously filed appeal.
What were the facts?
The petitioner, M/s Town Art, through its partner Moola Ram Choudhary, filed a writ petition challenging a notice dated March 19, 2025, issued under Section 148A(3) of the Income Tax Act, 1961. The notice was issued by the Assistant Commissioner of Income Tax, Circle - 3, Jodhpur. The respondent-Revenue acknowledged 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 Revenue noted that a Special Leave Petition had been filed before the Supreme Court against the Hexaware Technologies Ltd. judgment, and notice had been issued. The Revenue requested liberty to revive proceedings if the aforementioned judgments were set aside or modified.
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, and related procedural rules concerning faceless assessment. Assessee's Contention: The assessee implicitly relies on the principle that notices must be issued by the competent authority, which, in the context of faceless assessment, should be the FAO. Revenue's Contention: The Revenue acknowledges that the prevailing legal position, as per Sharda Devi Chhajer and Hexaware Technologies Ltd., holds such notices invalid. However, it argues that a Special Leave Petition is pending before the Supreme Court against the Hexaware judgment. Therefore, the Revenue requests liberty to revive proceedings if the Supreme Court sets aside or materially modifies the High Court judgments. The Revenue's argument is based on the pending appeal and the potential for a change in legal position.
Which sections of the Income-tax Act were involved?
Section 148A(3)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
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 03:53:26 PM) (Downloaded on 28/10/2026 at 12:36:28 AM)
[2025:RJ-JD:54220-DB] (2 of 3) [CW-24548/2025] 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 03:53:26 PM) (Downloaded on 28/10/2026 at 12:36:28 AM)
[2025:RJ-JD:54220-DB] (3 of 3) [CW-24548/2025] (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 167-sumer/- Powered by TCPDF (www.tcpdf.org) (Uploaded on 20/12/2025 at 03:53:26 PM) (Downloaded on 28/10/2026 at 12:36:28 AM)
Recent GST High Court judgments
Search GST case law →- Dipanshu Aggarwal vs. Director General Of GST IntelligenceDelhi · 28 Oct 2026
- Dezinetree Projects PVT. LTD. vs. Spokes Digital Inc And AnrDelhi · 28 Oct 2026
- Jaydeep Jayantilal Hudaka vs. State Of GujaratGujarat · 28 Oct 2026
- Commissioner/Additional Commissioner Of Central Tax vs. M/S INDIA Agro Exports Private LimitedKarnataka · 28 Oct 2026
- Manoj Kumar Prop M K Steel Traders vs. Additional Commissioner, Central Goods And Services Tax & Anr.Delhi · 28 Oct 2026
