ARVIND SHAH S/O LATE BHAG CHAND SHAH vs. THE DEPUTY COMMISSIONER OF INCOME TAX

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CW/18123/2023HC RajasthanRJHC02091350202301 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 April 8, 2022, issued under Section 148 of the Income Tax Act, 1961. The Court followed its previous decisions in Shree Cement Limited, Sharda Devi Chhajer, and Hexaware Technologies Ltd., which held that notices issued by JAOs instead of FAOs are invalid. The Court granted the Revenue liberty to revive the notice if the Supreme Court were to set aside the aforementioned judgments. Consequently, since the Section 148 notice was held to be invalid, the consequential assessment orders dated March 31, 2023, and April 11, 2023, and the penalty order dated September 25, 2023, were also quashed and set aside as they could not be sustained. 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 April 8, 2022, 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), rendering it invalid. The respondents, the Deputy Commissioner of Income Tax and the Additional Commissioner of Income Tax, acknowledged that one of the grounds raised by the petitioner was covered by previous judgments of the High Court. The respondents also noted that a Special Leave Petition (SLP) had been filed by the Revenue in a related case, Hexaware Technologies Ltd., and notice had been issued by the Supreme Court. The petitioner reserved the right to raise other grounds at a later stage. Subsequently, assessment orders dated March 31, 2023, and April 11, 2023, along with a penalty order dated September 25, 2023, were passed.

What were the issues?

1. Whether a notice dated April 8, 2022, 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 Contentions: The petitioner argued that the notice under Section 148 was invalid because it was issued by a JAO and not an FAO, relying on the High Court's judgments in Shree Cement Limited and Sharda Devi Chhajer. Revenue's Contentions: The Revenue conceded that one of the grounds was covered by the High Court's judgment. They stated that in the case of Hexaware Technologies Ltd., an SLP had been filed and notice issued by the Supreme Court. 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. The Revenue did not argue on the validity of the notice itself but sought conditional liberty.

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:34971-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 18123/2023 Arvind Shah S/o Late Bhag Chand Shah, 2654, Shah Bhawan Ghee Walo Ka Rasta Johari Bazar, Jaipur- 302003 ----Petitioner Versus 1. The Deputy Commissioner Of Income Tax, Central Circle- 4, Income Tax Department, Ncr Building, Statue Circle, Jaipur. 2. The Additional Commissioner Of Income Tax, Central Range, Jodhpur. ----Respondents For Petitioner : Mr. P.K. Kasliwal with Mr. Priyesh Kasliwal 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.

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.

2.

Ground referred to is that the notice dated 08th April 2022 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 1 DB Civil Writ Petition No.10540/2024, dated 05.08.2025 at Jaipur Bench (unreported)

[2025:RJ-JP:34971-DB] (2 of 3) [CW-18123/2023] 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.

3.

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.

4.

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.

5.

Therefore, keeping open all rights and contentions of parties, we quash and set aside notice dated 08th April 2022 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, assessment orders dated 31st March 2023, 11th April 2023 and penalty order dated 25th September 2023 have already been passed. Since we have held that the notice issued under Section 148 of the Act itself is not valid, the consequential assessment orders and penalty 2 2025 SCCOnLine Raj 3386 3 [2024] 162 taxmann.com 225 (Bombay)

[2025:RJ-JP:34971-DB] (3 of 3) [CW-18123/2023] order cannot be sustained. The same are also quashed and set aside. (MANEESH SHARMA),J (K.R. SHRIRAM),CJ N.GANDHI/RAJAT/30

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