DYNAMIC CABLES LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX

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CW/20828/2025HC RajasthanRJHC02108152202516 January 2026Author: SANJEEV PRAKASH SHARMA,SANGEETA SHARMA5 pages
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What did the High Court hold?

The High Court, referencing its own prior judgments in D.B. Civil Writ Petition No.11787/2024 (Sharda Devi Chhajer & Anr. Vs The Income Tax Officer & Anr.) and the order passed by one of the judges in CWP No.21509/2023 (Jasjit Singh vs. Union of India & Ors.), held that notices issued by the JAO under Section 148 of the Act, 1961, and subsequent proceedings initiated without conducting faceless assessment as envisaged under Section 144B of the Act, 1961, are contrary to the provisions of the Act. The Court reiterated that the mandate of Section 151A of the Act, 1961, must be strictly followed, and the JAO lacks the jurisdiction to issue such notices, as it weakens Section 151A. While the impugned notices and proceedings were found to be without jurisdiction and liable to be quashed, the Court noted that a final order had been passed and an appeal was pending before the Commissioner of Income Tax (Appeals). To avoid making the appeal redundant, the Court directed the petitioner to file an application before the CIT(A), who was directed to consider it and pass appropriate orders within 15 days, taking into account the High Court's judgments quashing proceedings based on notices issued by the JAO. The time spent during the litigation was to be excluded for limitation purposes for fresh notices, if needed.

What were the facts?

The petitioner, Dynamic Cables Limited, is challenging notices issued under Section 148 of the Income Tax Act, 1961, and subsequent assessment orders. The notices were issued by the Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO) as per the faceless regime. The assessment order for Assessment Year 2017-2018 was passed on March 28, 2025, after a notice dated March 30, 2024. The petitioner had challenged this order before the Commissioner of Income Tax (Appeals) on April 16, 2025, which was pending. The present writ petition was filed challenging the entire process. The High Court noted that a final order was passed after the notice was issued by the JAO, despite the introduction of the faceless regime.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, by the Jurisdictional Assessing Officer (JAO) are valid, or if they should have been issued by a Faceless Assessing Officer (FAO) in accordance with the faceless regime and Section 151A of the Act? Assessee's Contention: The notices were illegally issued by the JAO instead of the FAO. Revenue's Contention: Not explicitly recorded in the judgment. However, the judgment refers to the revenue's counsel suggesting a distinction from previously decided cases.

Which sections of the Income-tax Act were involved?

Section 148,Section 151A,Section 144B,Section 147,Section 119,Section 120

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2026:RJ-JP:1865-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 20828/2025 Dynamic Cables Limited, Having Its Registered Office At F-260, Road No. 13, Vki, Jaipur 302013 Through Its Authorized Representative K.s. Negi. ----Petitioner Versus Assistant Commissioner Of Income Tax, Circle-1, Jaipur, Ncr Build- ing, Statue Circle, Jaipur. ----Respondent For Petitioner(s) : Mr. Aditya Vijay For Respondent(s) : Mr. Nitin Jain HON'BLE THE ACTING CHIEF JUSTICE MR. SANJEEV PRAKASH SHARMA HON'BLE MRS. JUSTICE SANGEETA SHARMA

Order 16/01/2026

1.

Issue notice to respondent.

2.

Mr. Nitin Jain, learned counsel, accepts notice on behalf of the respondent.

3.

Both the learned counsel clearly state that the issue raised in the present writ petition stands finally adjudicated by a Co-ordinate Bench of this Court in D.B. Civil Writ Petition No.11787/2024: Sharda Devi Chhajer & Anr. Vs The Income Tax Officer & Anr. and other connected writ petitions decided on 19.03.2025, wherein, the Co-ordinate Bench has held as under:

“18. This Court further observes that any juri ic- tional error in the notices has to be cured and thus, the notices which have been issued for assessment and reassessment and which are the impugned no- tices under Section 148 of the Act of 1961, do not [2026:RJ-JP:1865-DB] (2 of 5) [CW-20828/2025] withstand the broader scheme of law, which requires automated allocation based on algorithm and random assignment of the assessing officer. Part 2(i)(a) of the Scheme clear demarcates as to how the assess- ment and reassessment has to take place.

19.

This Court is conscious of the fact that any re- form or change for betterment is always resisted by the persons in control, particularly those who do not visualize the pragmatic and progressive paths which require vision and wi om. The legislature in its own vision and wi om, for enhancing the efficiency of the taxation system by making it more transparent and impartial, decided to have infused technology in the shape of an algorithm for randomised allocations of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources. The common tendency to cling to control and old methods has to be dealt with firmly and ways & means including loopholes to fall back upon the old regime of control is an imminent danger which has to be thwarted off. The legislative intention, legislative vision and legisla- tive wi om has to be given full meaning in terms of technology and progressiveness, and thus, once an effective and strong step has been taken towards faceless regime, then maintaining the strings of local control to the prejudice of a common man would not only undermine the legislative wi om but the gains in terms of such a progressive and pragmatic step would stand to reduce. Once the gear of progress has been applied in a democratic set up, the same has to be strongly supported and sustained. The CBDT Cir- cular read with Section 151A of the Act of 1961 has to be given full meaning and any ways & means to defeat the technology or to manually try to control the same would go against the legislative purpose.

20.

Thus, this Court holds that the mandate of Sec- tion 151A of the Act of 1961 has to be strictly fol- lowed as there cannot be a way out of doing the same. This Court also holds that the JAO shall not have the juri iction 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 diminish- ing activation. For the purpose of assessment and re- assessment 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 al- lowed. Accordingly, the impugned Notices are quashed and set aside, as far as the juri iction 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

[2026:RJ-JP:1865-DB] (3 of 5) [CW-20828/2025] indicated above, with liberty to the respondents to is- sue fresh notices in compliance of the CBDT Notifica- tion dated 29.03.2022, by keeping the FAO as as- sessing officer. 21.1 However, the time spent dur- ing 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 arises.

21.

2 All pending applications stand disposed of.”

4.

One of us (Hon’ble Mr. Justice Sanjeev Prakash Sharma) while sitting at Punjab and Haryana High Court passed an order in CWP No.21509/2023 titled as Jasjit Singh vs. Union of India & Ors., decided on 29.07.2024 wherein it was held as un- der:- “16. We are in agreement with the view taken by the Coordinate Bench and hold that such circular or in- structions by the Board could not have been issued to override statutory provisions or to make them otiose or obsolete. Legislative enactments having financial implications are required to be followed strictly and mandatorily. By exercising the powers contained in Sections 119 and 120 of the Act, 1961 as well as Section 144B (7 & 8), the authorities cannot be al- lowed to usurp the legal provisions to their own satis- faction and convenience causing hardship to the as- sessees. It also leaves confusion in the minds of the taxpayers. In the opinion of this Court, instructions and circulars can be issued only for the purpose of supplementing the statutory provisions and for their implementation.

17.

In view of the aforesaid discussion, there is no occasion to distinguish or take a different view as suggested by the learned counsel for the revenue from what has already been held by the Coordinate Bench.

18.

Keeping in view the law laid down by the Co-ordi- nate Bench(supra) notices issued by the JAO under Section 148 of the Act, 1961 and the proceedings ini- tiated thereafter without conducting the faceless as- sessment as envisaged under Section 144B of the Act, 1961, have been found to be contrary to the provisions of the Act, 1961 and accordingly notices dated 28.02.2023, 16.03.2023, 20.03.2024 and 30.03.2023 and order dated 30.03.2023, are set aside for want of juri iction.

19.

The respondents-revenue would be, however at liberty to follow the procedure as laid down under the Act, 1961 and proceed accordingly, if so advised.

[2026:RJ-JP:1865-DB] (4 of 5) [CW-20828/2025]

20.

All the writ petitions are allowed. The interim or- der passed by the Court shall stand merged with the present order.”

5.

Learned counsel for the petitioner submits that the notices were illegally issued by the Juri ictional Assessing Officer in- stead of Faceless Assessing Officer.

6.

We note that the notice under Section 148 of the Income Tax Act, 1961 (for Assessment Year 2017-2018) was issued on 30.03.2024 and the assessment order was passed on 28.03.2025 and the same has been challenged before the learned Commissioner of Income Tax (Appeals) on 16.04.2025 which is currently pending. The same has been challenged in the present writ petition.

7.

Admittedly, in this case, the final order was passed after the notice was issued by the Juri ictional Assessing Officer. Al- though the faceless regime has been introduced. In view of the judgments passed in the cases of Jasjit Singh (supra) as well as Sharda Devi Chhajer (supra), the proceedings could not have been initiated by the Juri ictional Assessing Officer nor the faceless regime could have later on passed orders. However, it is noticed that the appeal has been preferred against the final or- der and, therefore, it would not be appropriate for this Court to pass orders resulting in making the appeal redundant.

8.

In these circumstances, we direct the petitioner to file an application before the concerned Commissioner of Income Tax (Appeal) who will take into consideration and pass appropriate orders accordingly within a period of 15 days following the judg- ment already rendered by this Court relating to quashing of the [2026:RJ-JP:1865-DB] (5 of 5) [CW-20828/2025] proceedings based on the notice issued by the Juri ictional Assessing Officer.

9.

The present Civil Writ Petition stands disposed of.

10.

All pending applications also stand disposed of. (SANGEETA SHARMA),J (SANJEEV PRAKASH SHARMA),ACJ DEEPTA ARORA /36

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