SHRI DEV MADANLAL ADANIA vs. INCOME-TAX OFFICER

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CW/11680/2025HC Rajasthan2025:RJ-JD:28499-DB02 July 2025Author: SHREE CHANDRASHEKHAR, SANDEEP SHAH3 pages
AI SummaryAllowed

What did the High Court hold?

The Tribunal held that the mandate of Section 151A of the Income Tax Act, 1961, must be strictly followed. It was further held that the Joint Assessing Officer (JAO) does not have the jurisdiction to issue notices under Section 148 of the Act, as this would weaken Section 151A and potentially lead to its diminished activation. The court emphasized that for assessment and reassessment under Sections 147, 148, and 148A, adherence to an algorithm-based random assessing system, as per Section 151A, is mandatory. Consequently, the impugned notices were quashed and set aside concerning the jurisdiction of JAOs. The court allowed the respondents to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, by keeping the FAO (presumably referring to the Facilitation Assessing Officer or a similar designated authority) as the assessing officer. The time spent during the pendency of the litigation was to be excluded for computing the limitation for issuing fresh notices, if needed.

What were the facts?

The petitioner, Shri Dev Madanlal Adania, filed a writ petition challenging an order dated 05th May 2025 passed under Section 148A(3) of the Income Tax Act, 1961. The Revenue, represented by the Income-Tax Officer and Additional Commissioner of Income Tax, filed a reply. The Revenue contended that the case was selected through an automated system for high-risk potential cases, and proceedings under Section 148A were initiated after due verification of material on record. They further stated that the order under Section 148A(3) was passed after obtaining prior approval through the ITBA system, in terms of Section 151, and the approval order was digitally signed. The petitioner's counsel informed the court that a batch of similar writ petitions, including 'Sharda Devi Chhajer v. The Income Tax Officer and Anr.', had already been decided by a co-ordinate bench.

What were the issues?

1. Whether the Joint Assessing Officer (JAO) has the jurisdiction to issue notices under Section 148 of the Income Tax Act, 1961, in light of Section 151A of the Act and the mandate of an algorithm-based random assessing system. Assessee's Contention: The petitioner implicitly challenges the jurisdiction of the JAO to issue the notice and order under Section 148A, as the proceedings were based on an automated selection and initiated by the JAO. The petitioner relies on the decision in 'Sharda Devi Chhajer v. The Income Tax Officer and Anr.' which addressed similar issues. Revenue's Contention: The Revenue argues that the case was selected through automation and the JAO followed due statutory procedure, including obtaining prior approval under Section 151 through the ITBA system. They contend that the grounds raised by the assessee are not acceptable.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(3),Section 147,Section 148,Section 151,Section 151A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2025:RJ-JD:28499-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 11680/2025 Shri Dev Madanlal Adania son of Shri Madanlal Adania, aged about 41 years, resident of 1202, Oshiwara Yashodeep CHS Limited, Opposite Hira Panna Shopping Mall, Jogeshwari (West), Mumbai- 400102 (Maharashtra). ----Petitioner Versus 1. Income-Tax Officer, Ward-1, Pali Mandia Road, Pali- 306401 E- Pali.ito@incometaxgov.in 2. Additional Commissioner of Income Tax, Range 1 Jodhpur, Office of Income Department, Aayakar Bhawan, Paota C Road, Jodhpur (Rajasthan)- 342010. ----Respondents For Petitioner(s) : Mr. Prateek Gattani, Advocate For Respondent(s) : Mr. K.K. Bissa, Advocate HON'BLE MR. JUSTICE SHREE CHANDRASHEKHAR HON'BLE MR. JUSTICE SANDEEP SHAH

Order 02/07/2025 The Revenue has filed a reply and raised an objection to this writ petition, more particularly as stated in paragraph nos.7 & 8 of the writ petition, which are quoted as under:- “7. Thus, the case selected through Automation selection under High Risk Potential Cases to the JAO and the JAO has initiated proceedings u/s 148A by adopting due statutory procedure and after verification of the facts material available on record based on the credible and reliable data as well as cogent and concrete information available with this office during the performance of duty.

8.

That it is further relevant to submit here that as regard to ground(s) / objection(s) mentioned by the applicant (assessee) in its writ petition vide Para-R not acceptable as the order u/s 148A(3) has duly been passed by the JAO after obtaining prior approval (Uploaded on 07/07/2025 at 06:44:52 PM) (Downloaded on 28/10/2026 at 12:38:39 AM)

[2025:RJ-JD:28499-DB] (2 of 3) [CW-11680/2025] through system (ITBA) which was accorded in terms of section 151 and the approval order has also been digital signed through DSC. Copy of approved order enclosed marked as Annexure-R/3.”

2.

This writ petition seeks to challenge order dated 05th May 2025 passed under section 148A (3) of the Income Tax Act, 1961. 3. Mr. Prateek Gattani, the learned counsel appearing for the petitioner and Mr. K.K. Bissa, the learned counsel appearing for the Revenue have informed the Court that a batch of writ petitions vide D.B. Writ Petition No.11787/2024 titled “Sharda Devi Chhajer v. The Income Tax Officer and Anr.” and analogous cases have already been decided by a co-ordinate Bench of this Court vide judgment rendered on 19th March 2025. In the aforesaid Judgment, a co-ordinate Bench of this Court held as under:- “20. Thus, this Court holds that the mandate of Section 151A of the Act of 1961 has to be strictly followed as there cannot be a way out of doing the same. This Court also holds that the JAO shall not have the jurisdiction to issue notices under Section 148 of the Act of 1961, as it would not only render Section 151A weak, but may also lead to its diminishing activation. For the purpose of assessment and reassessment under Sections 147, 148 & 148A and in light of the sanction under Section 151A, adherence has to be made to algorithm based random assessing system, and therefore, the impugned notices deserve to be quashed.

21.

Consequently, the present writ petitions are allowed. Accordingly, the impugned Notices are quashed and set aside, as far as the jurisdiction of JAOs for the purpose of Sections 148 & 148A of the Act of 1961 to issue the same is concerned. The question raised herein stands answered in the terms indicated above, with liberty to the respondents to issue fresh notices in compliance of the CBDT Notification dated 29.03.2022, by keeping the FAO as assessing officer.

21.

1 However, the time spent during the pendency of the present litigation in the Court, shall be excluded for the purpose of computing limitation for issuance of fresh notices, in case, need arised. (Uploaded on 07/07/2025 at 06:44:52 PM) (Downloaded on 28/10/2026 at 12:38:39 AM)

[2025:RJ-JD:28499-DB] (3 of 3) [CW-11680/2025]

21.

2 All pending applications stand disposed of”

4.

Following the decision in “Sharda Devi Chhajer”, this Court dealt with another batch of writ petitions vide D.B. Civil Writ Petition No.3270 of 2023 titled “M/s. S.M. Industries v. Union of India and Anr.” and analogous cases and disposed of those writ petitions in the light of the decision rendered in “Sharda Devi Chhajer”. Following the aforementioned decisions in “Sharda Devi Chhajer” and “M/s. S.M. Industries”, the present writ petition is allowed by setting aside the order dated 05th May 2025 passed under section 148A (3) of the Income Tax Act, 1961. The notice dated 05th May 2025 issued under section 148 of IT Act is also quashed with liberty to the Revenue to proceed further in the matter, if so decided, to issue fresh notices in compliance of the C.B.D.T. Notification dated 29th March 2022 by keeping F.A.O. as the Assessing Officer.

5.

D.B. Civil Writ Petition No.11680 of 2025 is allowed in terms of the decision in “Sharda Devi Chhajer”. (SANDEEP SHAH),J (SHREE CHANDRASHEKHAR),J 162-devrajP/- Powered by TCPDF (www.tcpdf.org) (Uploaded on 07/07/2025 at 06:44:52 PM) (Downloaded on 28/10/2026 at 12:38:39 AM)

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