SHARWAN CHOUDHARY, SON OF MADAN GOPAL CHOUDHARY vs. DEPUTY COMMISSIONER OF INCOME TAX

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CW/18417/2025HC RajasthanRJHC02103637202528 November 2025Author: SANJEEV PRAKASH SHARMA,MANEESH SHARMA4 pages
AI SummaryRemanded

What did the High Court hold?

The Court acknowledged that the notices were issued by the Jurisdictional Assessing Officer, which, in light of the judgments in Jasjit Singh and Sharda Devi Chhajer, would ordinarily render the proceedings invalid. These judgments held that notices issued by the JAO under Section 148, without adhering to the algorithm-based random assessing system and the faceless regime as envisaged under Section 144B, are contrary to the provisions of the Act and thus liable to be quashed for want of jurisdiction. However, the Court noted that a final order had already been passed in this case, and quashing the proceedings would render the appeal against the final order redundant. Therefore, instead of quashing the writ petition outright, the Court directed the petitioner to file an application before the concerned Commissioner of Income Tax (Appeal). The Commissioner was instructed to consider the application and pass appropriate orders within 15 days, taking into account the Court's previous judgments on quashing proceedings based on notices issued by the JAO.

What were the facts?

The petitioner, Sharwan Choudhary, filed a Civil Writ Petition before the Rajasthan High Court, Jaipur Bench, challenging notices issued by the Deputy Commissioner of Income Tax, Central Circle - 4, Jaipur. The petitioner argued that the notices were illegally issued by the Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer, contrary to the faceless regime introduced under the Income Tax Act. The respondent, the Income Tax Department, was represented. The Court noted that a final order had been passed after the notice was issued by the JAO, despite the introduction of the faceless regime. The Court also referred to previous judgments by coordinate benches on similar issues.

What were the issues?

1. Whether notices issued under Section 148 of the Income Tax Act, 1961, by the Jurisdictional Assessing Officer (JAO) are invalid in light of the faceless assessment regime and the mandate of Section 151A of the Act? (Question of law) Assessee's Contentions: The petitioner argued that the notices were illegally issued by the JAO, and the proceedings could not have been initiated by the JAO, especially after the introduction of the faceless regime. They relied on the principles laid down in the judgments of Sharda Devi Chhajer & Anr. Vs The Income Tax Officer & Anr. and Jasjit Singh vs. Union of India & Ors. Revenue's Contentions: The judgment does not explicitly record arguments made by the revenue in this specific writ petition. However, the Court's reference to the revenue's counsel suggesting a distinction from previous judgments implies the revenue may have attempted to argue for the validity of the notices or proceedings.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2025:RJ-JP:48427-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 18417/2025 Sharwan Choudhary, Son Of Madan Gopal Choudhary, Aged About 69 Years, Resident Of 82, Dhuleshwar Garden, Ajmer Road, Jaipur-302008 ----Petitioner Versus Deputy Commissioner Of Income Tax, Central Circle - 4, Jaipur Having Its Address At 4Th Floor, Lic Building, Ambedkar Circle, Jaipur ----Respondent For Petitioner(s) : Mr. R.B. Mathur, Sr. Adv. assisted by Mr. Prateek Kedawat, Mr. Falak Mathur, Mr. Manish Bhodiwal & Mr. Utsav Verma For Respondent(s) : Mr. Siddharth Bapna with Mr. Sarvesh Jain, Ms. Tanushka Saxena, Mr. Rahul Kumar & Ms. Chinki Choudhary HON'BLE THE ACTING CHIEF JUSTICE MR. SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE MANEESH SHARMA

Order 28/11/2025

1.

Issue notice to respondent.

2.

Mr. Siddharth Bapna, 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 ictional error in the notices has to be cured and thus, the

[2025:RJ-JP:48427-DB] (2 of 4) [CW-18417/2025] notices which have been issued for assessment and reassessment and which are the impugned notices under Section 148 of the Act of 1961, do not 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 assessment and reassessment has to take place.

19.

This Court is conscious of the fact that any reform 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 legislative 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 Circular 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 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 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 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 juri iction of

[2025:RJ-JP:48427-DB] (3 of 4) [CW-18417/2025] 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 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 under:- “16. We are in agreement with the view taken by the Coordinate Bench and hold that such circular or instructions 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 allowed to usurp the legal provisions to their own satisfaction and convenience causing hardship to the assessees. 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- ordinate Bench(supra) notices issued by the JAO under Section 148 of the Act, 1961 and the proceedings initiated thereafter without conducting the faceless assessment 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.

[2025:RJ-JP:48427-DB] (4 of 4) [CW-18417/2025]

20.

All the writ petitions are allowed. The interim order 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 instead of Faceless Assessing Officer.

6.

Admittedly, in this case, the final order was passed after the notice was issued by the Juri ictional Assessing Officer. Although 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 order and, therefore, it would not be appropriate for this Court to pass orders resulting in making the appeal redundant.

7.

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 judgment already rendered by this Court relating to quashing of the proceedings based on the notice issued by the Juri ictional Assessing Officer.

8.

The present Civil Writ Petition stands disposed of.

9.

All pending applications also stand disposed of. (MANEESH SHARMA),J (SANJEEV PRAKASH SHARMA),ACTING CJ AMIT/9

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