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

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CW/16203/2024HC RajasthanRJHC02086807202403 September 2025Author: K.R. SHRIRAM,MANEESH SHARMA2 pages
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What did the High Court hold?

The High Court quashed and set aside the notice dated March 31, 2024, issued under Section 148 of the Income Tax Act, 1961. The Court reasoned that this notice was issued by a Jurisdictional Assessing Officer (JAO) and not a Faceless Assessing Officer (FAO), which, in light of the judgments in Shree Cement Limited, Sharda Devi Chhajer, and Hexaware Technologies Ltd., renders such a notice invalid. The Court granted liberty to the Revenue to revive the notice if the Apex Court were to interfere with the aforementioned judgments. Furthermore, since the Section 148 notice was held to be invalid, the consequential assessment order dated March 30, 2025, was also quashed and set aside. The petition was disposed of, keeping open all rights and contentions of the parties.

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 argued that the notice was issued by a Jurisdictional Assessing Officer (JAO) and not a Faceless Assessing Officer (FAO), rendering it invalid. The respondent, the Income Tax Department, acknowledged that one of the grounds raised by the petitioner was covered by existing judgments. The respondent also mentioned that a Special Leave Petition (SLP) had been filed by the Revenue against the Hexaware Technologies Ltd. judgment, and notice had been issued. The parties agreed to a conditional disposal of the petition. An assessment order dated March 30, 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 valid? (Question of law) Assessee's Contention: The notice is bad and not valid because it was issued by a JAO and not an FAO. Reliance was placed on the High Court's judgment in Shree Cement Limited, which followed Sharda Devi Chhajer and Hexaware Technologies Ltd. Revenue's Contention: The respondent agreed that one ground was covered by a judgment. While acknowledging the Hexaware Technologies Ltd. judgment, the Revenue stated that an SLP had been filed and notice issued. The Revenue sought liberty to revive the notice if the Apex Court were to interfere with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. The Revenue did not contest the invalidity of the notice based on the current legal position.

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:35317-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 16203/2024 Jugal Kishore Khandelwal Son Of Late Shri Damodar Lal Khatoria, Aged About 74 Years, Resident Of 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 Dass 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. 1DB Civil Writ Petition No.10540/2024, dated 05.08.2025 at Jaipur Bench (unreported) 22025 SCCOnLine Raj 3386 3[2024] 162 taxmann.com 225 (Bombay)

[2025:RJ-JP:35317-DB] (2 of 2) [CW-16203/2024]

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 30th 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-35

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