RAM BABU AGARWAL S/O SH. BRIJ MOHAN AGARWAL vs. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2

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CW/729/2024HC Rajasthan2025:RJ-JP:36396-DB09 September 2025Bench: K.R. SHRIRAM, MANEESH SHARMA3 pages
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What did the High Court hold?

The High Court quashed and set aside the notice dated March 26, 2023, issued under Section 148 of the Income Tax Act, 1961. The Court agreed with the petitioner's contention that such a notice, if issued by a JAO and not an FAO, is bad in law, citing its own decisions in Shree Cement Limited and Sharda Devi Chhajer, and the Bombay High Court's decision in Hexaware Technologies Ltd. The Court granted the Revenue's request for liberty to revive the notice if the Apex Court were to overturn these precedents. Consequently, as the Section 148 notice was held invalid, the consequential assessment order dated March 7, 2024, was also quashed and set aside. The petition was disposed of with all rights and contentions of the parties kept open.

What were the facts?

The petitioner, Ram Babu Agarwal, challenged a notice dated March 26, 2023, issued under Section 148 of the Income Tax Act, 1961, and a consequential assessment order dated March 7, 2024. The petitioner contended that the notice was issued by a Jurisdictional Assessing Officer (JAO) and not a Faceless Assessing Officer (FAO). The Revenue, represented by the Assistant Commissioner of Income Tax and Deputy Commissioner of Income Tax, appeared before the High Court. The High Court was considering the validity of the Section 148 notice based on previous judgments.

What were the issues?

1. Whether a notice dated March 26, 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 invalid and bad in law? (Question of law turning on Section 148 of the Income Tax Act, 1961). Assessee's Contention: The notice issued under Section 148 is 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, and the Bombay High Court's judgment in Hexaware Technologies Ltd. Revenue's Contention: The Revenue agreed that one of the grounds raised by the petitioner was covered by a judgment of the Court. However, the Revenue noted that a Special Leave Petition (SLP) had been filed against the Hexaware Technologies Ltd. judgment, and notice had been issued. The Revenue requested liberty to revive the notice under Section 148 if the Apex Court were to interfere with the aforementioned judgments.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

[2025:RJ-JP:36396-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 729/2024 Ram Babu Agarwal S/o Sh. Brij Mohan Agarwal, Aged About 65 Years, R/o R-13 Yudishthar, Marg, C-Scheme, Jaipur-302001, Rajasthan ----Petitioner Versus 1. Assistant Commissioner Of Income Tax Central Circle-2, Room No. 410, 4Th Floor, Jeevan Nidhi-2, Lic Building Ambedkar Circle, Jaipur, Rajasthan-302005 2. Deputy Commissioner of Income Tax, ACIT Central Circle- 2 Room No.410, 4th Floor, Jeevan Nidhi – 2 LIC Building, Ambedkar Circle, Jaipur, Rajasthan- 302005 3. Union of India, through Secretary, Ministry of Finance, Government of India, North Block, New Delhi-110001. ----Respondent For Petitioner(s) : Mr. Rajat Sharma Advocate with Mr. Saksham Pandey Advocate. For Respondents No.1 & 2 For Respondent No.3 : : Mr. Siddharth Bapna Advocate with Mr. Sarvesh Jain Advocate & Mr. Meyhul Mittal Advocate. Mr. Devesh Yadav Advocate with Mr. Yatharth Asopa Advocate & Mr. Chinmay Surolia Advocate for Mr. R.D. Rastogi, ASG HON'BLE THE CHIEF JUSTICE MR. K.R. SHRIRAM HON'BLE MR. JUSTICE MANEESH SHARMA Order 09/09/2025 1. Mr. Siddharth Bapna, who appears on advance copy, agrees with Mr. Rajat Sharma that one of the grounds raised certainly is covered by a judgment of this Court. (Uploaded on 11/09/2025 at 04:11:05 PM) (Downloaded on 30/10/2026 at 10:25:43 AM)

[2025:RJ-JP:36396-DB] (2 of 3) [CW-729/2024] 2. Ground referred to is that the notice dated 26th March 2023 under Section 148 of the Income Tax Act, 1961 has been issued by a Jurisdictional Assessing Officer (JAO) and not Faceless Assessing Officer (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. 3. At the same time, Mr. Siddharth 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. Rajat Sharma 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 26th March 2023 issued under Section 148 of the Act with liberty as prayed. 6. Petition disposed. 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) (Uploaded on 11/09/2025 at 04:11:05 PM) (Downloaded on 30/10/2026 at 10:25:43 AM)

[2025:RJ-JP:36396-DB] (3 of 3) [CW-729/2024] 7. Consequently, all pending applications, if any, also stand disposed. 8. Since we have held that the notice issued under Section 148 of the Act itself is not valid, the consequential assessment order dated 07th March 2024 cannot be sustained. The same is also quashed and set aside. 9. Mr. Rajat Sharma’s statement that application to withdraw the appeal will be filed within two weeks, is accepted. (MANEESH SHARMA),J (K.R. SHRIRAM),CJ SANJAY KUMAWAT/57 Powered by TCPDF (www.tcpdf.org) (Uploaded on 11/09/2025 at 04:11:05 PM) (Downloaded on 30/10/2026 at 10:25:43 AM)

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