AJAY SEHGAL vs. INCOME TAX OFFICER WARD 1(1) FARIDABAD AND OTHERS

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CWP/12347/2025HC Punjab & HaryanaPHHC01068938202502 May 2025Bench: MRS. JUSTICE LISA GILL,MRS. JUSTICE SUDEEPTI SHARMA2 pages
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What did the High Court hold?

The High Court allowed the writ petition, disposing of it in terms of its previous judgments in Jatinder Singh Bhangu vs. Union of India and Jasjit Singh vs. Union of India. These prior judgments had allowed writ petitions on similar grounds, finding that the issuing authority lacked jurisdiction due to the exclusive power vested in the NFAC by the CBDT circular dated March 29, 2022. The Court granted liberty to the revenue to follow the procedure laid down under the Act, 1961, and proceed accordingly, if so advised. The ratio decidendi is that notices under Section 148 of the Income Tax Act, 1961, issued by authorities other than the NFAC, are without jurisdiction, rendering them invalid, subject to the revenue's right to re-initiate proceedings correctly.

What were the facts?

The petitioner, Ajay Sehgal, challenged a notice dated March 29, 2025, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2021-2022. The challenge was based on the assertion that the issuing authority lacked jurisdiction. The petitioner argued that a CBDT circular dated March 29, 2022, specifically grants exclusive power to the National Faceless Assessment Centre (NFAC) to issue such notices. The revenue, represented by the Union of India, did not dispute this contention. The High Court considered prior judgments on similar issues.

What were the issues?

1. Whether the notice dated March 29, 2025, issued under Section 148 of the Income Tax Act, 1961, for AY 2021-2022 is invalid due to lack of jurisdiction by the issuing authority, in light of the CBDT circular dated March 29, 2022, which purportedly vests exclusive power in the NFAC to issue such notices? (Question of law) Assessee's contention: The notice is invalid as the issuing authority lacked jurisdiction, citing the CBDT circular dated March 29, 2022, which designates the NFAC with exclusive power to issue Section 148 notices. The petitioner relies on the High Court's judgments in Jatinder Singh Bhangu vs. Union of India and Jasjit Singh vs. Union of India. Revenue's contention: The revenue did not dispute the assessee's contention.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

CWP-12347-2025 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 126 CWP-12347-2025(O&M) Date of Decision:-02.05.2025 Ajay Sehgal ....Petitioner Vs. Income Tax Officer, Ward 1 (1), Faridabad & ors. ...Respondents CORAM: HON'BLE MRS. JUSTICE LISA GILL HON'BLE MRS. JUSTICE SUDEEPTI SHARMA Present: Mr. Kartik Bansal, Advocate for the petitioner. Mr. Varun Issar, Sr. Standing counsel for the respondents. *** SUDEEPTI SHARMA, J. 1. Challenge in the present petition is to notice dated 29.03.2025 issued under Section 148 of the Income Tax Act, 1961 (for short ‘Act 1961”) and all consequential actions, for AY 2021-2022. 2. Learned counsel for the petitioner contends that the issue involved in the present writ petition is covered by the judgment passed by a Co-ordinate Bench of this Court in the cases of Jatinder Singh Bhangu vs. Union of India and others, passed in CWP No. 15745-2024 and connected matter, decided on 19.07.2024 and Jasjit Singh vs. Union of India and others (CWP No. 21509- 2023 and other connected matters), decided on 29.07.2024. 3. Learned counsel appearing for Union of India has also not disputed the same. 4. We have heard learned counsel for the parties and perused the whole records of the case. 5. The petitioner has challenged the notice dated 29.03.2025 issued under Section 148 of the Act, 1961 and all consequential actions, for AY Gaurav Arora 2025.05.05 12:42 I attest to the accuracy and integrity of this document

CWP-12347-2025 2 2021-2022, on the ground that the Issuing Authority had no jurisdiction to issue the same, in view of the circular/notification dated 29.03.2022 of the CBDT, wherein, it has been specifically enumerated that the NFAC has exclusive power to issue the notice under Section 148 of the Act, 1961. 6. A Co-ordinate Bench of this Court in Jatinder Singh Bhangu’s case (supra) and Jasjit Singh’s case (supra), allowed the writ petitions on the same issue, as raised in the present writ petition, by granting liberty to the revenue to follow the procedure as laid down under the Act, 1961 and proceed accordingly, if so advised. 7. In view of the above, the present writ petition is disposed of, in terms of Jatinder Singh Bhangu’s case (supra), decided on 19.07.2024 and Jasjit Singh’s case (supra), decided on 29.07.2024. 8. All the pending applications, if any, also stand disposed of. (LISA GILL)

(SUDEEPTI SHARMA) JUDGE JUDGE 02.05.2025

Gaurav Arora Whether speaking/reasoned : Yes/No Whether reportable : Yes/No Gaurav Arora 2025.05.05 12:42 I attest to the accuracy and integrity of this document

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