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

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CW/24546/2025HC Rajasthan2025:RJ-JD:54406-DB17 December 2025Author: PUSHPENDRA SINGH BHATI, SANJEET PUROHIT3 pages
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What did the High Court hold?

The High Court held that so long as the law declared in Sharda Devi Chhajer and Hexaware Technologies Ltd., which establishes 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 March 19, 2025, issued under Section 148 of the Income Tax Act, 1961, along with all consequential proceedings, was 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, 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 Supreme Court. The petitioner stated that other grounds were not being pressed 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 148 of the Income Tax Act, 1961, by the Assistant Commissioner of Income Tax, Circle-3, Jodhpur. The respondent-Revenue acknowledged that the issue was covered by previous High Court judgments, specifically Sharda Devi Chhajer vs. The Income Tax Officer & Another and Hexaware Technologies Ltd. vs. Assistant Commissioner of Income-Tax. The Revenue also stated that a Special Leave Petition was filed against the Hexaware Technologies Ltd. judgment before the Supreme Court, and notice had been issued. The petitioner stated that other grounds were not being pressed and undertook to withdraw a previously filed appeal.

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 provisions related to faceless assessment procedures under the Income Tax Act, 1961. Assessee's Contention: The petitioner 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, not the JAO. The petitioner's willingness to withdraw other grounds suggests reliance on the invalidity of the notice due to the issuing authority. Revenue's Contention: The Revenue concedes that the controversy is covered by the judgment in Sharda Devi Chhajer, which followed Hexaware Technologies Ltd., holding notices issued by the JAO invalid. However, the Revenue seeks liberty to revive proceedings if the aforementioned judgments are set aside or materially modified by the Supreme Court, as an SLP has been admitted against Hexaware Technologies Ltd.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2025:RJ-JD:54406-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 24546/2025 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 17/12/2025

1.

Mr. Sunil Bhandari, learned counsel appearing for the Tax Officer & Another [2025 SCC OnLine Raj 3386], which 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. (Uploaded on 20/12/2025 at 12:12:12 PM) (Downloaded on 28/10/2026 at 12:36:32 AM)

[2025:RJ-JD:54406-DB] (2 of 3) [CW-24546/2025]

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 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 19.03.2025 (Annex.2) issued under Section 148 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 (Uploaded on 20/12/2025 at 12:12:12 PM) (Downloaded on 28/10/2026 at 12:36:32 AM)

[2025:RJ-JD:54406-DB] (3 of 3) [CW-24546/2025] 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 (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 petition stands disposed of. All pending applications, if any, also stand disposed of. (SANJEET PUROHIT),J (DR. PUSHPENDRA SINGH BHATI),J 10-Zeeshan Powered by TCPDF (www.tcpdf.org) (Uploaded on 20/12/2025 at 12:12:12 PM) (Downloaded on 28/10/2026 at 12:36:32 AM)

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