ARVIND SHAH vs. DGIT (INV.) RAJASTHAN, INCOME-TAX DEPARTMENT

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CW/16243/2023HC RajasthanRJHC02075947202301 September 2025Author: K.R. SHRIRAM,MANEESH SHARMA3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court quashed and set aside the notice dated March 28, 2023, issued under Section 148 of the Income Tax Act, 1961. The Court allowed the application for raising legal grounds and agreed with the petitioner that the notice was invalid as it was issued by a JAO and not an FAO, following its own precedents in Shree Cement Limited, Sharda Devi Chhajer, and Hexaware Technologies Ltd. The Court granted the Revenue liberty to revive the notice if the Apex Court were to interfere with the judgments in Shree Cement Limited, Sharda Devi Chhajer, or Hexaware Technologies Ltd. Furthermore, since the Section 148 notice was held to be invalid, the consequential assessment order dated March 28, 2024, 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, Arvind Shah, challenged a notice dated March 28, 2023, issued under Section 148 of the Income Tax Act, 1961. The petitioner contended that the notice was issued by a Jurisdictional Assessing Officer (JAO) and not a Faceless Assessing Officer (FAO). The respondents, represented by the Income-Tax Department, acknowledged that one of the grounds raised by the petitioner was covered by a previous judgment of the High Court. The Revenue also noted 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 28, 2024, was passed after the petition was filed.

What were the issues?

1. Whether a notice dated March 28, 2023, 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? Assessee's Contention: The petitioner argued that the notice under Section 148 was issued by a JAO, not an FAO, and therefore, it is bad in law and invalid. This contention is supported by the High Court's judgment in Shree Cement Limited, which followed Sharda Devi Chhajer and Hexaware Technologies Ltd. Revenue's Contention: The Revenue agreed that the ground raised by the petitioner is covered by a judgment of the High Court. However, the Revenue stated that an SLP has been filed against the Hexaware Technologies Ltd. judgment, and notice has been issued. The Revenue sought liberty to revive the Section 148 notice if the Apex Court interferes with the aforementioned judgments.

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:34970-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 16243/2023 Arvind Shah, 2654, Shah Bhawan Ghee Walo Ka Rasta Johari Bazar, Jaipur-302003 ----Petitioner Versus 1. Dgit (Inv.) Rajasthan, Income-Tax Department, Ncr Building, Statue Circle, Jaipur. 2. Principal Commissioner Of Income Tax, Income Tax Department, Ncr Building, Statue Circle, Jaipur 3. Deputy 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 Ksaliwal For Respondents : Mr. Siddharth Bapna with Mr. Sarvesh Jain, Mr. Meyhul Mittal & Mr. Rahul Kumar HON'BLE THE CHIEF JUSTICE MR. K.R. SHRIRAM HON'BLE MR. JUSTICE MANEESH SHARMA

Order 01/09/2025

1.

Application (No.1/2025) for raising legal grounds is allowed.

2.

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

3.

Ground referred to is that the notice dated 28th March 2023 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

[2025:RJ-JP:34970-DB] (2 of 3) [CW-16243/2023] 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.

4.

At the same time, Mr. Bapna 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.

5.

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

6.

Therefore, keeping open all rights and contentions of parties, we quash and set aside notice dated 28th March 2023 issued under Section 148 of the Act with liberty as prayed.

7.

Petition disposed.

8.

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

9.

We are informed that after the petition was filed, an assessment order dated 28th March 2024 has already been passed. Since we have held that the notice issued under Section 148 of 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:34970-DB] (3 of 3) [CW-16243/2023] 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/RAJAT/27

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