HARESH GOBINDRAM KHABRANI vs. INCOME TAX OFFICER WARD 27 (1)(1), MUMBAI AND ORS

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WP/7649/2025HC BombayHCBM07029971202522 July 2025Author: HON'BLE SHRI JUSTICE B.P. COLABAWALLA,HON'BLE SHRI JUSTICE FIRDOSH PHIROZE POONIWALLA4 pages
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What did the High Court hold?

The High Court held that it was bound to follow the decision of the Division Bench of the same court in Hexaware Technologies Ltd. (supra), as the present case was squarely covered by it. Consequently, the Court set aside the impugned Notice issued under Section 148 of the Income Tax Act, 1961, and all consequential proceedings or orders. The Court granted liberty to the Revenue to revive the Writ Petition if the decision in Hexaware Technologies Ltd. (supra) is set aside by the Hon'ble Supreme Court on this specific issue. The Court clarified that revival could be sought by filing a Praecipe, without needing a separate interim application. If the Supreme Court dismisses the Special Leave Petition (SLP) challenging the Hexaware Technologies Ltd. judgment, there would be no question of revival. The Court also noted that upon revival, the petition would be decided on its own merits, considering other raised issues.

What were the facts?

The petitioner, Haresh Gobindram Khabrani, filed a Writ Petition challenging a Notice issued under Section 148 of the Income Tax Act, 1961. The petitioner argued that the notice was issued by the Jurisdictional Assessing Officer, whereas the law mandates it to be issued by a Faceless Assessing Officer. This, the petitioner contended, was a fatal defect. The High Court had issued Rule and granted interim relief staying the Section 148 notice on June 17, 2025. The matter was heard finally with the consent of both parties. The Revenue acknowledged that the issue was covered by a Division Bench decision of the same court but stated that this decision was challenged before the Supreme Court.

What were the issues?

1. Whether the Notice issued under Section 148 of the Income Tax Act, 1961, is invalid due to being issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer, as mandated by law? (Question of law) Assessee's Contention: The Petitioner argued that the issuance of the Section 148 Notice by the Jurisdictional Assessing Officer, when the law requires it to be issued by a Faceless Assessing Officer, constitutes a fatal defect, rendering the notice liable to be quashed. The Petitioner relied on the decision of the Bombay High Court in Hexaware Technologies Ltd. V/S Assistant Commissioner of Income-tax, Circle 15(1)(2) [(2024) 162 taxmann.com 225 (Bombay)]. Revenue's Contention: The Revenue conceded that the issue was concluded by the Hexaware Technologies Ltd. decision. However, they stated that this decision had been challenged before the Hon'ble Supreme Court and was likely to be taken up immediately after the court's reopening. The Revenue fairly admitted that there was no stay granted to the Hexaware Technologies Ltd. judgment.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

sr.88-wp-7649-2025.doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 7649 OF 2025 Haresh Gobindram Khabrani .. Petitioner Versus Income Tax Officer Ward 27 (1) (1), Mumbai & Ors. .. Respondents Adv. Rutuja N. Pawar (Through V. C.) a/w Adv. Hetal Laghave and Adv. Sneha More, for the Petitioner. Adv. Arjun Gupta for the Respondents.

CORAM: B. P. COLABAWALLA & FIRDOSH P. POONIWALLA, JJ. DATE: JULY 22, 2025 P. C.

1.

In the above Petition Rule was issued on 17 June 2025 and interim relief was also granted interalia staying the Notice issued under Section 148 of the Income Tax Act, 1961. Today, though the matter has come up under the caption “for directions”, we have, with the consent of parties, heard it finally.

2.

The above Writ Petition interalia challenges the Notice issued under Section 148 of the Income Tax Act, 1961 on various grounds. One of the JULY 22, 2025 Mansi shelke TRUSHA TUSHAR MOHITE TRUSHA TUSHAR MOHITE Date: 2025.07.28 15:29:45 +0530

sr.88-wp-7649-2025.doc

grounds is that the Notice has been issued by the Jurisdictional Assessing Officer when the law mandates that it has to be issued by the Faceless Assessing Officer. This is a fatal defect and therefore the Notice has to be quashed, is the argument of the Petitioner.

3.

It is the Petitioners’ contention that this issue is squarely covered by a decision of a Division Bench of this Court in the case of Hexaware Technologies Ltd. V/S Assistant Commissioner of Income-tax, Circle 15(1)(2) [(2024) 162 taxmann.com 225 (Bombay)].

4.

On the other hand, the learned advocate appearing on behalf of the Revenue stated that though it is true that this issue is concluded by the decision in Hexaware Technologies Ltd (supra), the said decision has been challenged before the Hon’ble Supreme Court, and the Hon’ble Supreme Court is likely to take up the matter immediately on re-opening. He has fairly stated that there is no stay to the judgment in Hexaware Technologies Ltd (supra).

5.

Considering these facts, we do not propose to keep the matter pending in this Court. Once it is fully covered by the decision in Hexaware Technologies Ltd (supra) we are bound to follow it. JULY 22, 2025 Mansi shelke

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6.

We accordingly set aside the impugned Notice issued under Section 148 and all other proceedings/orders emanating therefrom.

7.

We however grant liberty to the Revenue to revive the above Writ Petition in the event the decision in Hexaware Technologies Ltd (supra) is set aside by the Hon’ble Supreme Court on this issue. We make it clear that it will not be necessary for the Revenue to file a separate Interim Application to seek a revival of this Petition and the same can be done simply by moving a Praecipe before this Court. It is needless to clarify that if the Hon’ble Supreme Court dismisses the SLP challenging the decision in Hexaware Technologies Ltd (Supra), there would be no question of any revival.

8.

We also make it clear that once the Petition is revived and restored, the same would have to be decided on its own merits considering that several other issues are also raised challenging the Notice issued under Section 148. 9. Rule is accordingly made absolute and the Writ Petition is also disposed of in terms thereof. However, there shall be no order as to costs. JULY 22, 2025 Mansi shelke

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10.

This order will be Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order. [FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.] JULY 22, 2025 Mansi shelke

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