JUGAL KISHORE KHANDELWAL SON OF LATE SHRI DAMODAR LAL KHATORIA vs. INCOME TAX OFFICER

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CW/15006/2024HC RajasthanRJHC02080166202403 September 2025Author: K.R. SHRIRAM,MANEESH SHARMA2 pages
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What did the High Court hold?

The Court quashed and set aside the notice dated March 31, 2024, issued under Section 148 of the Income Tax Act, 1961. The Court followed its own judgment in Shree Cement Limited, which in turn relied on Sharda Devi Chhajer and the Bombay High Court's decision in Hexaware Technologies Ltd., holding that a notice issued by a JAO instead of an FAO is invalid. The Court granted the Revenue liberty to revive the notice if the Apex Court were to interfere with the aforementioned judgments. Consequently, the assessment order dated March 31, 2025, which was passed subsequent to the invalid notice, was also quashed and set aside. The Court kept open all rights and contentions of the parties for the future. No other grounds were decided on merits.

What were the facts?

The petitioner, Jugal Kishore Khandelwal, challenged a notice dated March 31, 2024, issued under Section 148 of the Income Tax Act, 1961, by the Income Tax Officer, Ward 1(1), Jaipur. The petitioner contended that the notice was issued by a Jurisdictional Assessing Officer (JAO) and not a Faceless Assessing Officer (FAO), rendering it invalid. The respondent Revenue acknowledged that one of the grounds raised by the petitioner was covered by existing High Court judgments. The Revenue also informed the court that a Special Leave Petition (SLP) had been filed against the judgment in Hexaware Technologies Ltd. and notice had been issued. An assessment order dated March 31, 2025, had also been passed after the petition was filed.

What were the issues?

1. Whether a notice dated March 31, 2024, issued under Section 148 of the Income Tax Act, 1961, by a Jurisdictional Assessing Officer (JAO) instead of a Faceless Assessing Officer (FAO) is bad in law and invalid? (Question of law) Assessee's Contentions: The assessee argued that the notice under Section 148 was issued by a JAO and not an FAO, citing judgments of this Court in Shree Cement Limited Vs. Assistant Commissioner of Income-Tax & Others and Sharda Devi Chhajer Vs. The Income Tax Officer & Another, which held such notices to be invalid. The assessee also relied on Hexaware Technologies Ltd. Vs. Assistant Commissioner of Income-tax, Circle 15(1)(2) (Bombay High Court). Revenue's Contentions: The Revenue agreed that one of the grounds was covered by a High Court judgment. The Revenue stated that an SLP had been filed against the Hexaware Technologies Ltd. judgment, and notice had been issued. The Revenue requested liberty to revive the Section 148 notice if the Apex Court were to interfere with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited.

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:35316-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 15006/2024 Jugal Kishore Khandelwal S/o Late Shri Damodar Lal Khatoria, Aged About 74 Years, R/o House No. 626, Bala Ji Ka Rasta, Ghat Gate Bazar, Jaipur. ----Petitioner Versus Income Tax Officer, Ward 1(1), Jaipur Having its Address At New Central Revenue Building, Bhagwan Das Road, Jaipur. ----Respondent For Petitioner(s) : Mr. Siddharth Ranka For Respondent(s) : Mr. Sandeep Pathak HON'BLE THE CHIEF JUSTICE MR. K.R. SHRIRAM HON'BLE MR. JUSTICE MANEESH SHARMA

Order 03/09/2025

1.

Mr. Pathak, who appears on advance copy, agrees with Mr. Siddharth Ranka that one of the grounds raised certainly is covered by a judgment of this Court.

2.

Ground referred to is that the notice dated 31st March 2024 under Section 148 of the Income Tax Act, 1961 has been issued by a Juri ictional Assessing Officer (JAO) and not Faceless Assessing Offider (FAO) and this Court in the case of Shree Cement Limited Vs. Assistant Commissioner of Income-Tax & Others1 following Sharda Devi Chhajer Vs. The Income Tax Officer & Another2 and Hexaware Technologies Ltd. Vs. Assistant Commissioner of Income-tax, Circle 15(1)(2)3, has held that such a notice will be bad and not valid. 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)

[2025:RJ-JP:35316-DB] (2 of 2) [CW-15006/2024]

3.

At the same time, Mr. Pathak states that in Hexaware Technologies Ltd. (supra), Revenue has preferred a Special Leave Petition and notice has been issued. Counsel states that in view of the law as it stands today, Court may grant the prayer of petitioner but in case the Apex Court interferes with judgment in Hexaware Technologies Ltd. (supra), Sharda Devi Chhajer (supra) or Shree Cement Limited (supra), then Revenue should be given liberty to revive the notice issued under Section 148 of the Act.

4.

Mr. Siddharth Ranka states that in view of the above, for the present, petitioner will reserve his right to raise other grounds at an appropriate stage.

5.

Therefore, keeping open all rights and contentions of parties, we quash and set aside notice dated 31st March 2024 issued under Section 148 of the Act with liberty as prayed.

6.

Petition disposed.

7.

Consequently, all pending applications, if any, also stand disposed.

8.

We are informed that after the petition was filed, an assessment order dated 31st March 2025 has already been passed. Since we have held that the notice issued under Section 148 of the Act itself is not valid, the consequential assessment order cannot be sustained. The same is also quashed and set aside. (MANEESH SHARMA),J (K.R. SHRIRAM),CJ N.Gandhi/Deepa-33

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