ARPAL ADVISORY SERVICES PRIVATE LTD. vs. INCOME TAX OFFICER WARD 14 AND ORS

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WP/6059/2023HC BombayHCBM01021140202304 August 2025Bench: HON'BLE SHRI JUSTICE B.P. COLABAWALLA,HON'BLE SHRI JUSTICE FIRDOSH PHIROZE POONIWALLA3 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal, following the binding precedent of the Division Bench of the Bombay High Court in Hexaware Technologies Ltd. V/S Assistant Commissioner of Income-tax, Circle 15(1)(2), held that the impugned Notice issued under Section 148 of the Income Tax Act, 1961, was liable to be set aside. The reasoning was that the notice was issued by the Jurisdictional Assessing Officer, which was contrary to the mandate of the law requiring issuance by a Faceless Assessing Officer. The Tribunal acknowledged the revenue's submission that the Hexaware judgment was under challenge before the Supreme Court but noted the absence of any stay. Consequently, the Tribunal set aside the impugned Notice and all proceedings/orders emanating therefrom. Liberty was granted to the revenue to revive the writ petition if the Supreme Court sets aside the Hexaware Technologies Ltd. decision. The Tribunal clarified that if the SLP is dismissed, there would be no question of revival. Any revival would require the matter to be decided on its own merits, considering other issues raised by the petitioner.

What were the facts?

The assessee, Arpal Advisory Services Pvt. Ltd., filed a writ petition challenging a notice issued under Section 148 of the Income Tax Act, 1961. The primary ground for challenge was that the notice was issued by a Jurisdictional Assessing Officer instead of a Faceless Assessing Officer, which the petitioner argued was a fatal defect. The assessment year(s) are not explicitly stated. The respondents are the Income Tax Officer, Ward 14(5), Pune, and others. The High Court of Judicature at Bombay heard the petition. The procedural history involves the rule being made returnable forthwith and heard finally with the consent of the parties.

What were the issues?

1. Whether a Notice issued under Section 148 of the Income Tax Act, 1961, by a Jurisdictional Assessing Officer, when the law mandates issuance by a Faceless Assessing Officer, is a fatal defect rendering the notice liable to be quashed? The assessee contended that this issue is squarely covered by the Division Bench decision of the Bombay High Court in Hexaware Technologies Ltd. V/S Assistant Commissioner of Income-tax, Circle 15(1)(2) [(2024) 162 taxmann.com 225 (Bombay)], and therefore, the notice must be quashed. The revenue acknowledged that the issue is concluded by the Hexaware Technologies Ltd. decision but stated that this decision has been challenged before the Hon'ble Supreme Court, which is likely to hear the matter soon. The revenue also fairly conceded that there is no stay on the Hexaware Technologies Ltd. judgment.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 6059 OF 2023 Arpal Advisory Services Pvt. Ltd. .. Petitioner Versus Income Tax Officer, Ward 14(5), Pune & Ors. .. Respondents Mr. Rajesh Poojary i/b Mint and Confreres, Advocates for the Petitioner. Mr. Akhileshwar Sharma, Advocate for the Respondents.

CORAM : B. P. COLABAWALLA & FIRDOSH P. POONIWALLA, JJ. DATE : AUGUST 4, 2025. P. C. 1. Mentioned. Taken out of turn. 2. Rule. Respondents waive service. With the consent of the parties, Rule made returnable forthwith and heard finally. 3. The above Writ Petition interalia challenges the Notice issued under Section 148 of the Income Tax Act, 1961 on various grounds. One of the grounds is that the Notice has been issued by the Jurisdictional Assessing Officer when the law mandates that it has to be issued by the Faceless Assessing Officer. This is a fatal defect and therefore the Notice has to be quashed, is the argument of the Petitioner. Page 1 of 3 AUGUST 4, 2025 Aswale ANJALI TUSHAR ASWALE Digitally signed by ANJALI TUSHAR ASWALE Date: 2025.08.13 12:04:08 +0530

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4.

It is the Petitioners’ contention that this issue is squarely covered by a decision of a Division Bench of this Court in the case of Hexaware Technologies Ltd. V/S Assistant Commissioner of Income-tax, Circle 15(1)(2) [(2024) 162 taxmann.com 225 (Bombay)]. 5. On the other hand, the learned advocate appearing on behalf of the Revenue stated that though it is true that this issue is concluded by the decision in Hexaware Technologies Ltd (supra), the said decision has been challenged before the Hon’ble Supreme Court, and the Hon’ble Supreme Court is likely to take up the matter shortly. The learned Counsel for the Revenue has fairly stated that there is no stay to the judgment in Hexaware Technologies Ltd (supra). 6. Considering these facts, we do not propose to keep the matter pending in this Court. Once it is fully covered by the decision in Hexaware Technologies Ltd (supra) we are bound to follow it. 7. We accordingly set aside the impugned Notice issued under Section 148 and all other proceedings/orders emanating therefrom. 8. We however grant liberty to the Revenue to revive the above Writ Petition in the event the decision in Hexaware Technologies Ltd Page 2 of 3 AUGUST 4, 2025 Aswale

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(supra) is set aside by the Hon’ble Supreme Court on this issue. We make it clear that it will not be necessary for the Revenue to file a separate Interim Application to seek a revival of this Petition and the same can be done simply by moving a Praecipe before this Court. It is needless to clarify that if the Hon’ble Supreme Court dismisses the SLP challenging the decision in Hexaware Technologies Ltd (supra), there would be no question of any revival. 9. We also make it clear that once the Petition is revived and restored, the same would have to be decided on its own merits considering that several other issues are also raised challenging the Notice issued under Section 148. 10. Rule is accordingly made absolute and the Writ Petition is also disposed of in terms thereof. However, there shall be no order as to costs. 11. This order will be digitally signed by the Private Secretary/ Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order. [FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.] Page 3 of 3 AUGUST 4, 2025 Aswale

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