NIKHIL VYANKATESH VYAS vs. INCOME TAX OFFICER WARD I I SOLAPUR AND ORS

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WP/7637/2025HC BombayHCBM07030474202514 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 is bound to follow the decision of the Division Bench of the Bombay High Court in Hexaware Technologies Ltd. V/S Assistant Commissioner of Income-tax, as the present case is 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 and orders. The Court granted liberty to the Revenue to revive the writ petition if the decision in Hexaware Technologies Ltd. is set aside by the Supreme Court. The Court clarified that revival can be done by moving a Praecipe, and once revived, the petition would be decided on its merits, considering other issues raised. The Rule was made absolute, and the Writ Petition was disposed of.

What were the facts?

The petitioner, Nikhil Vyankatesh Vyas, filed a writ petition challenging a notice issued under Section 148 of the Income Tax Act, 1961. The petition was admitted, and interim relief was granted, staying the Section 148 notice. The matter was heard finally with the consent of both parties. The petitioner argued that the Section 148 notice was issued by the Jurisdictional Assessing Officer, whereas the law mandates it to be issued by a Faceless Assessing Officer, constituting a fatal defect. The petitioner relied on the Bombay High Court's decision in Hexaware Technologies Ltd. V/S Assistant Commissioner of Income-tax. The Revenue acknowledged the Hexaware Technologies Ltd. decision but stated it was challenged before the Supreme Court, though no stay was granted.

What were the issues?

1. Whether the Notice issued under Section 148 of the Income Tax Act, 1961, is invalid because it was 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 the Faceless Assessing Officer, is a fatal defect that warrants quashing the notice. This contention is supported by the Division Bench decision of the Bombay High Court in Hexaware Technologies Ltd. V/S Assistant Commissioner of Income-tax. Revenue's Contention: The Revenue conceded that the issue is covered by the Hexaware Technologies Ltd. decision. However, they informed the Court that this decision has been challenged before the Supreme Court and is likely to be taken up soon. The Revenue also stated that there is no stay granted by the Supreme Court on 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

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.7637 OF 2025 Nikhil Vyankatesh Vyas .. Petitioner Versus Income Tax Officer Ward -1(1), Solapur & Ors. .. Respondents Ms.Rutuja Pawar (Through V.C.) a/w Ms.Hetal Laghave a/w Ms.Sneha More, Advocate for the Petitioner. Mr.Akhileshwar Sharma, Advocate for the Respondents.

CORAM: B. P. COLABAWALLA & FIRDOSH P. POONIWALLA, JJ. DATE: JULY 14, 2025 P. C.

1.

In the above Petition Rule was issued on 17th 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 14, 2025 Mohite TRUSHA TUSHAR MOHITE TRUSHA TUSHAR MOHITE Date: 2025.07.16 11:33:08 +0530

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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 14, 2025 Mohite

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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.

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 14, 2025 Mohite

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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 14, 2025 Mohite

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