VINOD PARASMAL SETHIA vs. INCOME TAX OFFICER WARD 2(3) AND ORS

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WP/9150/2025HC BombayHCBM07035436202507 July 2025Author: HON'BLE SHRI JUSTICE B.P. COLABAWALLA,HON'BLE SHRI JUSTICE FIRDOSH PHIROZE POONIWALLA4 pages
AI SummaryRemanded

What did the High Court hold?

The Bombay High Court, following its own Division Bench decision in Hexaware Technologies Ltd. V/S Assistant Commissioner of Income-tax, Circle 15(1)(2), held that the impugned Notice issued under Section 148 of the Income Tax Act, 1961, was liable to be set aside. The Court reasoned that it is bound to follow the precedent set by the Hexaware Technologies Ltd. judgment, which addressed the issue of the authority issuing the Section 148 Notice. The Court accordingly set aside the impugned Notice and all consequential proceedings or orders. However, to allow the Revenue to pursue the matter further if the Supreme Court overturns the Hexaware Technologies Ltd. decision, the Court granted liberty to the Revenue to revive the Writ Petition. The Court clarified that revival could be done by a Praecipe, and upon revival, the Petition would be decided on its merits, considering other grounds raised by the petitioner.

What were the facts?

The petitioner, Vinod Parasmal Sethia, filed a Writ Petition challenging a Notice issued under Section 148 of the Income Tax Act, 1961. The primary ground for challenge was that the Notice was issued by a Jurisdictional Assessing Officer, whereas the law mandates it should be issued by a Faceless Assessing Officer. The petitioner contended that this constituted a fatal defect. The assessment year(s) are not specified. The respondents are the Income Tax Officer, Ward-2(3), Solapur, and others. The procedural history indicates that the rule was issued and waived by the respondents, and the matter was heard finally with the consent of parties.

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 a Jurisdictional Assessing Officer instead of a Faceless Assessing Officer, as mandated by law? Assessee's Contention: The petitioner argued that the issuance of the Section 148 Notice by a Jurisdictional Assessing Officer, when the law requires it to be issued by a Faceless Assessing Officer, is a fatal defect that warrants quashing the Notice. The petitioner relied on the Division Bench 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 acknowledged that the issue is covered by the Hexaware Technologies Ltd. decision. However, they stated that this decision has been challenged before the Hon'ble Supreme Court and is likely to be taken up soon. The Revenue fairly conceded that there is no stay granted to the judgment in Hexaware Technologies Ltd.

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.9150 OF 2025 Vinod Parasmal Sethia .. Petitioner Versus Income Tax Officer, Ward-2(3), Solapur & Ors. .. Respondents Ms.Rutuja Pawar (through V.C.) a/w Hetal Laghave, Advocates for the Petitioner. Mr.Akhileshwar Sharma, Advocate for the Respondents.

CORAM : B. P. COLABAWALLA & FIRDOSH P. POONIWALLA, JJ. DATE : JULY 07, 2025 P. C.

1.

Rule. Respondents waive service. With the consent of the parties, Rule made returnable forthwith and heard 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 grounds is that the Notice has been issued by the Jurisdictional Assessing Officer when the law mandates that it has to be JULY 07, 2025 Utkarsh UTKARSH KAKASAHEB BHALERAO UTKARSH KAKASAHEB BHALERAO Date: 2025.07.10 11:48:15 +0530

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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 07, 2025 Utkarsh

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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 07, 2025 Utkarsh

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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 07, 2025 Utkarsh

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