RAJESH TODWAL S/O PREM CHAND TODWAL vs. PRINCIPAL COMMISSIONER OF INCOME TAX, (CENTRAL)

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CW/18044/2024HC RajasthanRJHC02098952202404 September 2025Author: K.R. SHRIRAM,MANEESH SHARMA2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that since the re-assessment order, which was the basis for the penalty order, had already been quashed by the Court in a prior writ petition (D.B. Civil Writ Petition No.4181/2024), the penalty proceedings could not survive. The Court noted that the earlier writ petition had quashed the notice issued under Section 148 of the Income Tax Act, 1961, on the grounds that it was issued by the Jurisdiction Assessing Authority (JAO) instead of the Faceless Assessing Authority (FAO), citing relevant precedents. As the foundational assessment proceedings were invalidated, the consequential penalty order was also rendered unsustainable. Therefore, the penalty order dated September 27, 2024, was quashed and set aside. The petition was disposed of accordingly.

What were the facts?

The petitioner, Rajesh Todwal, challenged a penalty order dated September 27, 2024, before the Rajasthan High Court, Jaipur Bench. The penalty order was a consequence of a re-assessment order. The petitioner's counsel argued that the re-assessment order itself had been quashed by the same Court in a previous writ petition (D.B. Civil Writ Petition No.4181/2024) decided on September 3, 2025. The basis for quashing the re-assessment order was that the notice issued under Section 148 of the Income Tax Act, 1961, was issued by the Jurisdiction Assessing Authority (JAO) and not the Faceless Assessing Authority (FAO), relying on precedents like Shree Cement Limited Vs. Assistant Commissioner of Income-Tax & Others, Sharda Devi Chhajer Vs. The Income Tax Officer & Another, and Hexaware Technologies Ltd. Vs. Assistant Commissioner of Income-tax. The revenue's counsel conceded to the petitioner's submission.

What were the issues?

1. Whether the penalty order, being a consequence of a re-assessment order, can survive when the re-assessment order has been quashed by the Court? (Question of law) Assessee's Contention: The penalty order is intrinsically linked to the re-assessment order. Since the re-assessment order has been quashed by this Hon'ble Court in D.B. Civil Writ Petition No.4181/2024, the penalty order, which is a consequential action, must also be quashed. The quashing of the notice under Section 148, which led to the re-assessment order, renders the entire assessment and subsequent penalty proceedings invalid. Reliance was placed on the decision in D.B. Civil Writ Petition No.4181/2024, which followed Shree Cement Limited Vs. Assistant Commissioner of Income-Tax & Others, Sharda Devi Chhajer Vs. The Income Tax Officer & Another, and Hexaware Technologies Ltd. Vs. Assistant Commissioner of Income-tax. Revenue's Contention: The revenue's counsel agreed with the submissions made by the petitioner's counsel.

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-JP:35574-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 18044/2024 Rajesh Todwal S/o Prem Chand Todwal, 835, Nawab Sahib Ki Haweli, Tripolia Bazar, Jaipur 302003 ----Petitioner Versus 1. Principal Commissioner Of Income Tax, (Central), Income- Tax Department, Ncr Building, Statue Circle, Jaipur. 2. Additional Commissioner Of Income Tax, Income Tax Central Range, Income Tax Income Jodhpur. 3. Assistant Commissioner Of Income Tax Central Circle-4, Income Tax Department, Ncr Building, Statue Circle, Jaipur ----Respondents For Petitioner : Mr. P.K. Kasliwal with Mr. Priyesh Kasliwal For Respondents : Mr. Siddharth Bapna with Mr. Meyhul Mittal HON'BLE THE CHIEF JUSTICE MR. K.R. SHRIRAM HON'BLE MR. JUSTICE MANEESH SHARMA

Order 04/09/2025

1.

Mr. Kasliwal, counsel for petitioner states that penalty order impugned in this petition is a consequence of the re-assessment order passed, which order has been quashed by this Court in D.B. Civil Writ Petition No.4181/2024-Rajesh Todwal Vs. DGIT (INV), Rajasthan & Ors., decided on 3rd September 2025. Mr. Kasliwal says that the Court was pleased to quash the notice itself that was issued under Section 148 of the Income Tax Act, 1961, because the notice was issued by the Juri iction Assessing Authority (JAO) not Faceless Assessing Authority (FAO) relying on Shree Cement

[2025:RJ-JP:35574-DB] (2 of 2) [CW-18044/2024] Limited Vs. Assistant Commissioner of Income-Tax & Officer & Another2 and Hexaware Technologies Ltd. Vs. Assistant Commissioner of Income-tax, Circle 15(1)(2)3. 2. Mr. Bapna states that what Mr. Kasliwal says is correct.

3.

In view thereof, as the notice itself has been quashed followed by the assessment order, penalty proceedings cannot survive and the same also has to be quashed.

4.

Accordingly, the penalty order dated 27th September 2024 is quashed and set aside.

5.

Petition disposed. (MANEESH SHARMA),J (K.R. SHRIRAM),CJ N.GANDHI/RAJAT/32 1 DB Civil Writ Petition No.10540/2024, dated 05.08.2025 at Jaipur Bench (unreported) 2 2025 SCCOnLine Raj 3386 3 [2024] 162 taxmann.com 225 (Bombay)

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