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The High Court held that the Jurisdictional Assessing Officer (JAO) would continue to have jurisdiction to decide notices that were originally issued by him, even under the new faceless regime. The Court reasoned that the Supreme Court, in exercising its power under Article 142 of the Constitution in Ashish Aggarwal's case, specifically provided jurisdiction to the JAO by a deemed fiction of law under the new faceless regime. The initial notice was treated as a notice under Section 148A and Section 148 of the old Act. Therefore, the JAO is best placed to assess and re-assess. The Court also stated that the procedure laid down under the new regime will have to be followed by the JAO, and no prejudice would be caused by this approach. The Court disagreed with the view taken by the Telangana High Court in Kankanala Ravindra Reddy's case and found the contention regarding the non-application of Rajeev Bansal's case to be misconceived. The Court directed the revenue to examine each case relating to deemed notices under Section 148 in light of the Supreme Court's observations in Rajeev Bansal's case, considering limitations and time-bar provisions, and to drop cases below Rs. 50,00,000/- as per the revenue's stand before the Apex Court. This exercise is to be completed expeditiously within two months. The Court also noted that recent Supreme Court judgments in Vikram Kapahi, Ashish Acharatlal Varaiya, and Pradeep Himatlal Shah were disposed of in terms of Rajeev Bansal's case. All petitions were disposed of accordingly, with liberty to the assessee to avail remedies under the Act if aggrieved by the final order.
The Tribunal held that the Jurisdictional Assessing Officer (JAO) retains jurisdiction to issue notices under Section 148A and Section 148 of the Income Tax Act, 1961, and to proceed with reassessment proceedings, even after the introduction of the faceless regime. The Court reasoned that the initial notice was issued by the JAO and was treated as a notice under Section 148A and Section 148 of the Act. Therefore, the JAO is the appropriate authority to assess and re-assess the provisions of law. The Court emphasized that the procedure laid down under the new regime must be followed by the JAO and that no prejudice would be caused to the assessees by this course of action. The Court disagreed with the view taken by the Telangana High Court in Kankanala Ravindra Reddy's case and found the contention regarding the non-application of the judgment in Rajeev Bansal's case to be misconceived. The Court directed the revenue to examine each case relating to deemed notices issued under Section 148 in light of the Supreme Court's observations in Rajeev Bansal's case, considering limitations and time-barring provisions. Cases below Rs. 50,00,000/- are to be dropped based on the revenue's stand before the Supreme Court. The exercise is to be completed expeditiously within two months. The Court also noted that recent Supreme Court judgments in Vikram Kapahi, Ashish Acharatlal Varaiya, and Pradeep Himatlal Shah disposed of SLPs in terms of Rajeev Bansal's judgment.
The High Court held that the Jurisdictional Assessing Officer (JAO) would continue to have jurisdiction to decide notices that were originally issued by him, even if they were deemed to be under Section 148A and Section 148 of the Act. The Court reasoned that the initial notice was issued by the JAO, and it would be logical for him to conclude the proceedings. The Court clarified that the procedure laid down under the new faceless regime would have to be followed by the JAO, and no prejudice would be caused to the assessees by this course of action. The Court disagreed with the view taken by the Telangana High Court in Kankanala Ravindra Reddy's case and found the contention regarding the non-application of the judgment in Rajeev Bansal's case to be misconceived. The Court directed the revenue to examine each case individually in light of the Supreme Court's observations in Rajeev Bansal's case, particularly concerning limitation and the dropping of cases below Rs. 50,00,000/-. The exercise was to be completed expeditiously, preferably within two months. The Court also noted that appeals against final assessment orders would be decided in view of the findings arrived at. The Court did not expressly leave any issue undecided.
The High Court held that the Jurisdictional Assessing Officer (JAO) would continue to have jurisdiction to decide notices that were originally issued by him, even under the new faceless regime. The Court reasoned that the procedure laid down under the new regime would have to be followed by the JAO, and no prejudice would be caused to the assessee by this course of action. The Court disagreed with the view taken by the Telangana High Court in Kankanala Ravindra Reddy's case and found the petitioners' submission regarding the non-application of the judgment in Rajeev Bansal's case to be misconceived. The Court clarified that its own judgment in Jasjit Singh's case dealt with notices issued after the faceless regime came into force. The Court directed the revenue to examine each case relating to deemed notices issued under Section 148 in light of the Supreme Court's observations in Rajeev Bansal's case, considering limitations and time-bar provisions. Cases below Rs. 50,00,000/- were to be dropped, as per the revenue's stand before the Supreme Court. The exercise was to be conducted expeditiously, and the decision conveyed to the assessee under the faceless regime. The Court noted that the Supreme Court had also disposed of SLPs in terms of the Rajeev Bansal judgment in related cases. All petitions were disposed of with liberty to the assessee to avail remedies under the Act if aggrieved by subsequent orders.
The High Court held that the jurisdictional assessing officer (JAO) retains jurisdiction to proceed with notices originally issued by them, even under the new faceless regime. The court reasoned that the initial notice was issued by the JAO, and this should be treated as a notice under Section 148A and Section 148 of the Act. The court emphasized that the procedure laid down under the new regime must be followed by the JAO, and no prejudice would be caused by this course of action. The court disagreed with the Telangana High Court's view in Kankanala Ravindra Reddy's case and found the petitioners' contentions to be without force. The court directed the revenue to examine each case individually in light of the Supreme Court's observations in Rajeev Bansal's case, considering limitations and time-barring provisions. Cases involving amounts less than Rs. 50,00,000/- were to be dropped, aligning with the revenue's stand before the Supreme Court. The exercise was to be completed expeditiously, preferably within two months, and decisions conveyed under the faceless regime. Appeals against final assessment orders would be decided based on these findings.
The Tribunal held that the Jurisdictional Assessing Officer (JAO) would continue to have jurisdiction to decide notices that were originally issued by him, even after the introduction of the faceless regime. The Court reasoned that no prejudice would be caused by this course of action and that the JAO is the best person to assess and re-assess the provisions of law. The Court explicitly disagreed with the view taken by the Telangana High Court in Kankanala Ravindra Reddy's case and found the contention regarding the non-application of the judgment in Rajeev Bansal's case to be misconceived. The Court directed the revenue to examine each case relating to deemed notices issued under Section 148 in light of the Supreme Court's observations in Rajeev Bansal's case, considering limitations and time-barred proceedings. Cases involving amounts less than Rs. 50,00,000/- were to be dropped, aligning with the revenue's stand before the Supreme Court. The exercise was to be conducted expeditiously, preferably within two months, and decisions conveyed to the assessees under the faceless regime. The Court also noted that recent Supreme Court judgments in Vikram Kapahi, Ashish Acharatlal Varaiya, and Pradeep Himatlal Shah disposed of SLPs in terms of Rajeev Bansal's case. Any aggrieved party could avail remedies under the Act. Appeals against final assessment orders were to be decided in view of the findings.
The High Court held that the Jurisdictional Assessing Officer (JAO) would continue to have jurisdiction to decide notices originally issued by them, even in the context of the new faceless regime. The Court reasoned that the Supreme Court, in exercising its power under Article 142 of the Constitution in Ashish Aggarwal's case, had provided jurisdiction to the JAO by a deemed fiction of law under the new faceless regime. The Court found that if the initial notice was issued by the JAO and treated as a notice under Section 148A, the JAO is the appropriate authority to assess and re-assess. The Court also stated that the procedure laid down under the new regime would have to be followed by the JAO and no prejudice would be caused to the petitioners. The Court disagreed with the view taken by the Telangana High Court in Kankanala Ravindra Reddy's case and found the contention regarding the non-application of Rajeev Bansal's case to be misconceived. The Court clarified that for cases where appeals against final assessment orders were filed, those appeals would be decided in view of the observations and findings herein. The Court directed the revenue to examine each case relating to deemed notices under Section 148 in light of the Supreme Court's observations in Rajeev Bansal's case, considering limitations and the revenue's stand before the Apex Court regarding cases below Rs. 50,00,000/-. This exercise was to be completed expeditiously, preferably within two months. The Court also noted that recent Supreme Court judgments in Vikram Kapahi, Ashish Acharatlal Varaiya, and Pradeep Himatlal Shah were disposed of in terms of the Rajeev Bansal judgment. All petitions were disposed of accordingly, with the option for assessees to avail remedies under the Act if aggrieved by subsequent orders.
The High Court granted the petitioner's request to withdraw the writ petition. Liberty was granted to the petitioner to take up the matter before the Revisional Court. The Court made it clear that the Revisional Court shall examine the matter and consider all aspects. The writ petition was dismissed as withdrawn with the liberty granted. Any pending applications were also disposed of.
The High Court dismissed the writ petition. The Court observed that the satisfaction note for initiating proceedings under Section 153C, referencing the petitioner for AY 2011-2012, indicated that Dinesh Kumar Khatoria's documents were found on a pen drive during search proceedings related to Ramesh Chand Maheshwari. These documents contained entries about the petitioner paying cash loans to various individuals. The Court also noted that the petitioner had previously challenged a notice under Section 148 for the same assessment year, and this Court had quashed those proceedings on 19.03.2024, granting liberty to the authorities to proceed as per law. Given this liberty, the Court found no reason to interfere with the Section 153C notice concerning undisclosed cash loans of Rs. 3,55,00,000. The petitioner was advised to raise all necessary arguments and defenses before the tax authorities, who were directed to pass a speaking order.
The Tribunal held that the appeal was dismissed. The reasoning was based on the previous order-sheet dated March 17, 2025, which stated that the appeal would stand dismissed automatically if defects were not cured within three weeks. The reader confirmed that all defects had not been cured. Therefore, the Tribunal found the appeal to be self-operative and dismissed it. No specific relief was granted or denied on the merits of the case. No issues were expressly left undecided.
The High Court held that it did not find any question of law, more so of any public importance, arising from the order of the Income Tax Appellate Tribunal (ITAT). The ITAT had only remanded the matter back to the Assessing Officer to examine the issue of addition concerning an amount already surrendered by the husband of the assessee, which was before the Settlement Commissioner. Based on this finding, the High Court dismissed the appeals. No specific issue was left undecided; the court found no basis to proceed with the appeals.
The High Court held that considering the ITAT had only remanded the matter back to the Assessing Officer to examine whether an addition could be made in relation to an amount already surrendered by the husband (which was before the Settlement Commissioner), there was no substantial question of law, or more importantly, no question of law of public importance, arising from the ITAT's order. Therefore, the appeals filed by the revenue were dismissed. The High Court did not decide on the merits of the addition or the surrender. The operative direction was the dismissal of the appeals.
The High Court allowed the writ petitions, quashing the notices dated 26.07.2022 issued by the Jurisdictional Assessing Officer (JAO) and all consequential orders. The Court held that the mandate of Section 151A of the Income Tax Act, 1961, must be strictly followed, and adherence to the algorithm-based random assessing system is required for assessments and reassessments under Sections 147, 148, and 148A. The Court found that the JAO does not have the jurisdiction to issue notices under Section 148, as doing so weakens Section 151A and undermines the legislative purpose of the faceless regime. The reasoning is based on the principle that legislative intent for technological advancement and transparency in taxation must be upheld, and any attempt to revert to manual control is detrimental. The Court relied on its own prior decisions and a decision by a coordinate bench, which held that notices issued without adhering to the faceless assessment scheme and Section 151A are contrary to the Act. The respondents were granted liberty to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, keeping the Faceless Assessing Officer (FAO) as the assessing officer. The time spent during the litigation was to be excluded for limitation purposes for issuing fresh notices.
The High Court allowed the petition. The Court noted that the issue had been adjudicated by the Supreme Court in Deepak Steel And Power Limited Vs. Central Board of Direct Taxes & Ors., which relied on the Revenue's concession in Union of India & Ors. Vs. Rajeev Bansal. The Revenue had conceded that for Assessment Year 2015-2016, all notices issued on or after April 1, 2021, would have to be dropped as they would not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Since the notices in the present litigation were dated June 25, 2021, and July 27, 2022, and considering the concession and the co-ordinate bench's view that limitation for AY 2015-16 expired on March 31, 2022, the Court held that the proceedings continued by the Revenue deserved to be quashed as time-barred. The operative direction was to quash the proceedings.
The Tribunal held that notices issued under Section 148 of the Income Tax Act, 1961, by a Jurisdictional Assessing Officer (JAO) are invalid. The court reasoned that the mandate of Section 151A of the Act, which emphasizes algorithm-based random allocation of cases for assessment and reassessment, must be strictly followed. Issuing notices by a JAO undermines this legislative intent, weakens Section 151A, and diminishes its activation. The court affirmed that the scheme of faceless assessment, utilizing technological tools for randomized allocation, is designed to enhance transparency and impartiality. Therefore, any attempt to circumvent this system through manual control or by allowing JAOs to issue such notices is contrary to the legislative purpose. The impugned notices were quashed and set aside for want of jurisdiction. The respondents were granted liberty to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, keeping the Faceless Assessing Officer (FAO) as the assessing officer. The time spent during the litigation was to be excluded for computing the limitation for issuing fresh notices.
The High Court allowed the writ petitions, quashing the notices dated 26.07.2022 issued by the Jurisdictional Assessing Officer (JAO) and all consequential orders. The Court held that the mandate of Section 151A of the Income Tax Act, 1961, must be strictly followed, and adherence to the algorithm-based random assessing system is required for assessments and reassessments under Sections 147, 148, and 148A. The Court found that the JAO does not have the jurisdiction to issue notices under Section 148, as doing so weakens Section 151A and undermines the legislative purpose of the faceless regime. The reasoning is based on the principle that legislative intent for technological advancement and transparency in taxation must be upheld, and any attempt to revert to manual control is detrimental. The Court relied on its own prior decisions and a decision by a coordinate bench, which held that notices issued without adhering to the faceless assessment scheme and Section 151A are contrary to the Act. The respondents were granted liberty to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, keeping the Faceless Assessing Officer (FAO) as the assessing officer. The time spent during the litigation was to be excluded for limitation purposes for issuing fresh notices.
The High Court allowed the writ petitions, quashing the notices dated 26.07.2022 issued by the Jurisdictional Assessing Officer (JAO) and all consequential orders. The Court held that the mandate of Section 151A of the Income Tax Act, 1961, must be strictly followed, and adherence to the algorithm-based random assessing system is required for assessments and reassessments under Sections 147, 148, and 148A. The Court found that the JAO does not have the jurisdiction to issue notices under Section 148, as doing so weakens Section 151A and undermines the legislative purpose of the faceless regime. The reasoning is based on the principle that legislative intent for technological advancement and transparency in taxation must be upheld, and any attempt to revert to manual control is detrimental. The Court relied on its own prior decisions and a decision by a coordinate bench, which held that notices issued without adhering to the faceless assessment scheme and Section 151A are contrary to the Act. The respondents were granted liberty to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, keeping the Faceless Assessing Officer (FAO) as the assessing officer. The time spent during the litigation was to be excluded for limitation purposes for issuing fresh notices.
The High Court held that the appeal filed under Section 263 of the Income Tax Act, 1961, did not raise any question of law, much less one of public importance. The Court noted that the CIT(A) had made factual findings that the assessee's purchases and sales were genuine and that the non-maintenance of a stock register was not a valid reason for rejecting the books of accounts, which were duly audited. The ITAT had examined the record and concurred with these factual findings. Consequently, the High Court found no reason to entertain the appeal and dismissed it. No specific issue was left undecided; the appeal was dismissed on the grounds that it lacked substantial questions of law.
The Tribunal, following its previous order in D.B. Wealth Tax Appeal No.4/2023, decided that there was confusion by the introduction of faceless hearings, which led the appellant to file an appeal before the wrong CIT(A). The appellant's prayer for transfer of appeal and the explanation for the delay were considered. The Tribunal found that the appellant was pursuing a remedy, albeit on wrong advice. Consequently, the impugned order was set aside, the delay in filing the appeal before the Tribunal was condoned, and the matter was remitted back to the Tribunal to decide the appeal on merits. The appeal was allowed. The ratio decidendi is that procedural confusions and delays caused by administrative changes, if properly explained and pursued diligently, should not prejudice the assessee's right to a decision on merits.
The Tribunal held that the delay in filing Form 10B should be condoned. The reasoning was that there was no allegation of mala fide intention on the part of the petitioner in filing the form belatedly, and the charitable nature of the trust was not disputed. The Tribunal emphasized that in such cases involving public charitable trusts with a history of charitable activities, the approach should be equitious, balancing, and judicious. While technically the respondent might have grounds to reject the application based on strict interpretation, denying the exemption solely on the bar of limitation, especially when the legislature has granted wide discretionary powers for condonation, would be unjust. The Tribunal found support in judgments from the Bombay High Court (Al Jamia Mohammediyah Education Society) and Gujarat High Court (Sarvodaya Charitable Trust), which advocate for a liberal and judicious approach in such matters. The Tribunal concluded that the petitioner was not lethargic or lacking bona fide. Consequently, the delay was condoned, and the impugned order was quashed and set aside, allowing the petitioner's application for condonation of delay.
The Tribunal granted the appellant's request to withdraw the appeal. The appeal was accordingly dismissed as withdrawn. The Tribunal explicitly stated that the formulated substantial question of law is kept open. Furthermore, the Department was granted liberty to move an application for revival of the appeal if the matter is not covered under the aforementioned circular. No specific findings were made on the merits of the case, as the appeal was disposed of on a procedural ground.
The Tribunal quashed and set aside the notice dated 28.03.2024, issued under Section 148 of the Income-tax Act, 1961. The primary reason for this decision was that the notice was issued by the Jurisdictional Assessing Officer (JAO) and not the Faceless Assessing Officer (FAO). The Tribunal found merit in the petitioner's submission that this issue had been extensively dealt with in prior High Court judgments, including Hexaware Technologies Ltd., Sharda Devi Chhajer, and Shree Cement Limited. While acknowledging the revenue's submission regarding an ongoing SLP in the Hexaware case and their request for liberty to revive the notice, the Tribunal proceeded to quash the notice. However, the Tribunal granted liberty to the revenue to revive the notice issued under Section 148 of the Act, contingent upon any adverse decision by the Apex Court in the aforementioned cases.
The High Court quashed and set aside the notice dated 15.03.2024 issued under Section 148 of the Income-tax Act, 1961. The Court found merit in the petitioner's submission that the notice was issued by the Jurisdictional Assessing Officer (JAO) and not the Faceless Assessing Officer (FAO), a point extensively dealt with in the cited precedents. While the revenue sought to preserve its rights pending the outcome of an SLP before the Apex Court in a related matter (Hexaware Technologies Ltd.), the Court granted the petitioner's prayer to quash the notice. However, the Court provided liberty to the revenue to revive the notice issued under Section 148 if the Apex Court's decision in the aforementioned cases impacts the current ruling. The petition was disposed of with these directions.
The Tribunal quashed and set aside the notice dated 19.03.2024 issued under Section 148 of the Income-tax Act, 1961. The primary reason for this decision was the petitioner's contention that the notice was issued by the Jurisdictional Assessing Officer (JAO) and not the Faceless Assessing Officer (FAO). The Tribunal found merit in this argument, referencing previous judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, and Shree Cement Limited, which dealt with similar issues. While quashing the notice, the Tribunal granted liberty to the revenue to revive it, subject to the outcome of any intervention by the Apex Court in the aforementioned cases. This conditional liberty was granted based on the revenue's submission regarding the pending SLP in the Hexaware Technologies Ltd. case. The petition was disposed of with these directions.
The High Court quashed and set aside the notice dated 28.03.2024 issued under Section 148 of the Income-tax Act, 1961. The Court acknowledged the petitioner's argument that the notice was issued by the JAO and not the FAO, citing relevant precedents. While the Revenue conceded that the Court might grant the petitioner's prayer based on the current legal position, it sought liberty to revive the notice if the Supreme Court were to interfere with the aforementioned judgments. The Court, therefore, quashed the notice with liberty to the Revenue to revive it as prayed, keeping open the rights and contentions of both parties. The petition was disposed of on these terms, with all pending applications also disposed of.
The Tribunal held that, in view of the law as it currently stands, originating from judgments in Hexaware Technologies Ltd. v. Assistant Commissioner of Income-Tax, Sharda Devi Chhajer v. The Income Tax Officer & Another, and Shree Cement Limited v. Assistant Commissioner of Income Tax, a notice under Section 148 of the Income Tax Act, 1961, must be issued by a Faceless Assessing Officer (FAO). Since the notice in this case was admittedly issued by the Jurisdictional Assessing Officer (JAO), it was deemed bad in law. The Court quashed and set aside the notice dated 22.03.2024 issued under Section 148A(b), the order dated 04.04.2024 passed under Section 148A(d), and the notice dated 04.04.2024 issued under Section 148 of the Act. The Court granted liberty to the revenue to revive the notice if the Apex Court were to interfere with the aforementioned judgments. The petition was disposed of accordingly.
The Tribunal quashed and set aside the notice dated 28.03.2024 issued under Section 148 of the Income-tax Act, 1961. The Court found merit in the petitioner's submission that the notice was issued by the JAO and not the FAO, aligning with the precedents cited. The revenue's submission regarding the pending SLP in the Hexaware Technologies Ltd. case and the request for liberty to revive the notice were also considered. Consequently, the Court granted liberty to the revenue to revive the notice if the Apex Court were to rule in their favour in the pending SLP. The petition was disposed of with these directions, keeping open the rights and contentions of both parties.
The Tribunal quashed and set aside the notice dated 30.03.2024 issued under Section 148 of the Income-tax Act, 1961. The Court found merit in the petitioner's submission that the notice was issued by the JAO and not the FAO, relying on the precedents of Hexaware Technologies Ltd., Sharda Devi Chhajer, and Shree Cement Limited. The Court acknowledged the revenue's submission regarding the pending SLP in the Hexaware case and granted liberty to the revenue to revive the notice if the Apex Court's decision impacts the cited judgments. The petition was disposed of with this liberty granted to the revenue, keeping open the rights and contentions of both parties.
The High Court held that the notices and order were bad in law. The Court acknowledged the submissions of both parties, particularly the revenue's concession based on established precedents like Hexaware Technologies Ltd. and Sharda Devi Chhajer. The Court found the revenue's request for liberty to revive the notice in case of a future change in the Apex Court's stance to be fair. Consequently, the notice dated 10.04.2023 issued under Section 148 of the Income Tax Act, 1961, and the order dated 10.04.2023 issued under Section 148A(d) of the Act were quashed and set aside. The Court granted liberty to the revenue to revive the notice if the Supreme Court were to alter the legal position established by the cited judgments. The writ petition was disposed of with these directions.
The Tribunal quashed and set aside the notice dated 24.03.2024 issued under Section 148 of the Income-tax Act, 1961. The primary reasoning was based on the established legal position, as extensively dealt with in the cases of Hexaware Technologies Ltd., Sharda Devi Chhajer, and Shree Cement Limited, which held that such notices issued by the JAO instead of the FAO were invalid. The Tribunal granted the revenue liberty to revive the notice issued under Section 148 of the Act in the event the Apex Court were to interfere with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. The petition was disposed of with this liberty preserved, keeping open the rights and contentions of both parties. No issue was expressly left undecided.
The Tribunal held that the ITAT's findings on both issues were factual. Regarding the first issue, the Tribunal noted the ITAT's conclusion that payments made to an Indian Bank, to which the Bank Negotiation Act, 1949 applies, are exempt from TDS under Section 194A(3)(iii). Therefore, the PCIT's order remanding the matter to the Assessing Officer on this point was deemed illegal and factually incorrect. Concerning the second issue, the Tribunal observed that the ITAT factually determined that the assessee held more than the prescribed 26% shares under Section 115BBD, leading to the conclusion that income from the joint venture was to be treated as dividend income. As these were factual findings, the High Court did not interfere.
The High Court held that notices issued under Section 148 of the Income Tax Act, 1961, by a Jurisdictional Assessing Officer (JAO) are invalid as they do not withstand the broader scheme of law requiring automated allocation based on an algorithm and random assignment. The Court emphasized that the mandate of Section 151A of the Act has to be strictly followed, and JAOs do not have the jurisdiction to issue such notices, as it weakens Section 151A. The Court found that adherence to the algorithm-based random assessing system is necessary for assessment and reassessment under Sections 147, 148, and 148A, in light of the sanction under Section 151A. Consequently, the impugned notices were quashed and set aside for want of jurisdiction. The Court also held that circulars or instructions cannot override statutory provisions or make them obsolete. The time spent during litigation was excluded for computing the limitation for issuing fresh notices, if needed, and the respondents were at liberty to follow the prescribed procedure.
The High Court held that the mandate of Section 151A of the Income Tax Act, 1961, must be strictly followed. It ruled that a JAO does not have the jurisdiction to issue notices under Section 148 of the Act, as doing so weakens Section 151A and diminishes its activation. For assessment and reassessment under Sections 147, 148, and 148A, in light of the sanction under Section 151A, adherence to the algorithm-based random assessing system is mandatory. Consequently, notices issued by the JAO under Section 148, and any consequential orders, were quashed and set aside for want of jurisdiction. The Court also held that circulars or instructions by the CBDT cannot override statutory provisions or make them obsolete. The time spent during the pendency of the litigation was to be excluded for computing the limitation for issuing fresh notices, if required. The respondents were at liberty to follow the procedure laid down under the Act and issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, keeping the Faceless Assessing Officer (FAO) as the assessing officer.
The Tribunal held that notices issued for assessment and reassessment under Section 148 of the Income Tax Act, 1961, by the Jurisdictional Assessing Officer (JAO) are not valid. The Court reasoned that the mandate of Section 151A of the Act must be strictly followed, and there cannot be a way out of adhering to the algorithm-based random assessing system. Issuing notices by the JAO would not only weaken Section 151A but also lead to its diminishing activation. The Court further held that the JAO shall not have the jurisdiction to issue notices under Section 148 of the Act, as it would render Section 151A weak. For assessment and reassessment under Sections 147, 148, and 148A, in light of the sanction under Section 151A, adherence to the algorithm-based random assessing system is mandatory. Consequently, the impugned notices were quashed and set aside. The Court allowed the respondents liberty to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, keeping the Face-less Assessment Officer (FAO) as the assessing officer. The time spent during the pendency of the litigation was excluded for computing the limitation for issuance of fresh notices. The operative direction was to quash the notice dated 31.03.2024 and all consequential orders.
The High Court held that notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, are not sustainable. The Court relied on its previous decision in Sharda Devi Chhajer & Anr. Vs The Income Tax Officer & Anr. and the order in Jasjit Singh vs. Union of India & Ors. The reasoning was that the mandate of Section 151A of the Act, which requires adherence to an algorithm-based random assessing system for assessment and reassessment under Sections 147, 148, and 148A, must be strictly followed. The Court found that the JAO issuing such notices undermines Section 151A and defeats the legislative intent of a transparent and impartial taxation system infused with technology. Therefore, the impugned notice dated 31.03.2024 and all consequential orders were quashed and set aside for want of jurisdiction. The respondents were granted liberty to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, by keeping the Faceless Assessing Officer (FAO) as the assessing officer. The time spent during the litigation was to be excluded for computing the limitation for fresh notices.
The High Court held that the mandate of Section 151A of the Income Tax Act, 1961, must be strictly followed. Notices issued under Section 148 of the Act by a JAO are not sustainable as they weaken Section 151A and may lead to its diminished activation. For assessment and reassessment under Sections 147, 148, and 148A, in light of the sanction under Section 151A, adherence to the algorithm-based random assessing system is mandatory. The Court found that the notices issued by the JAO, without conducting faceless assessment as envisaged under Section 144B of the Act, were contrary to the provisions of the Act. Consequently, the impugned notice dated 31.03.2024 and all consequential orders were quashed and set aside for want of jurisdiction. The respondents were granted liberty to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, by keeping the Faceless Assessing Officer (FAO) as the assessing officer. The time spent during the pendency of the litigation was to be excluded for computing the limitation for issuance of fresh notices, if needed.
The High Court dismissed the writ petition. The Court found that the petitioner-company had been avoiding proceedings under Section 148 of the Act, initiated for assessment year 2011-2012. The Court noted that the previous High Court order had directed the respondents to decide objections in accordance with law after considering GKN Driveshafts (India) Ltd. and providing a personal hearing. The respondents had disposed of the objections on 02.02.2017 and provided the available material. The Court found no error in the respondents' disposal of the objections and the supply of material. The Court also noted that the petitioner's Special Leave Petition against the earlier High Court order was dismissed by the Supreme Court, with all questions of law kept open to be canvassed before the authority concerned. Therefore, the Court held that the petitioner-company should canvass all its arguments before the authority concerned, as per the Supreme Court's directions, and found no reason to interfere with the order passed by the respondents.
The High Court held that the controversy involved in the present writ petition is squarely covered by a judgment of even date rendered in D.B. Civil Writ Petition No.2989/2015 (Silver Spring Construction private limited Vs. Commissioner Of Income Tax Udaipur. and Anr.). For the self-same reasons as stated in that judgment, the present writ petition is also disposed of in terms of that judgment. The specific findings, reasoning, and ratio decidendi of the judgment in D.B. Civil Writ Petition No.2989/2015 are not detailed in this order, but the operative direction is to dispose of the present petition in accordance with it. No issue was expressly left undecided.
The High Court held that the order dated 16.03.2015 rejecting the petitioner's objections was unsustainable and deserved to be set aside. The Court found that the Assessing Officer had not properly considered the order passed by the ITAT in the assessee's own case for AY 2010-11, which had ruled in favour of the petitioner regarding the deduction under Section 80 IB(10). The Assessing Officer had merely brushed aside the ITAT's order, failing to give any finding on the submissions raised. The Court emphasized that while res judicata does not apply in income tax proceedings, the principles of consistency, propriety, and finality do. A higher authority's finding must be dealt with and considered. The Court cited the Supreme Court's decision in GKN Driveshafts (India) Ltd. v. Income Tax Officer & Ors. for the requirement of a speaking order and Bharat Sanchar Nigam Ltd. v. Union of India for the principle of consistency in subsequent assessment years when facts and law remain the same. The Court quashed the order dated 16.03.2015 and remanded the matter back to the Assessing Officer to decide the objections afresh after giving a reasonable opportunity of hearing.
The High Court acknowledged that an alternative and efficacious remedy in the form of an appeal before the Commissioner (Appeals) is available to the petitioner under Section 246A of the Income Tax Act, 1961. Therefore, the Court was of the view that the petitioner should exhaust this alternative remedy. However, considering that interim protection was granted to the petitioner from the inception of the writ petition, the Court directed that this protection should continue until the appeal is decided by the appellate authority. The writ petition was disposed of with liberty to the petitioner to file an appeal within two weeks, and the appellate authority was directed to decide the appeal expeditiously, preferably within eight weeks. The time spent in prosecuting the writ petition was to be excluded for computing the period of limitation for filing the appeal. The Court did not decide the merits of the petitioner's argument regarding the Faceless Assessment Scheme.
The Tribunal held that the issue involved in the present Civil Writ Petition is squarely covered by a judgment rendered by a Co-Ordinate Bench of the High Court in the case of Sharda Devi Chhajer Vs. Income Tax Officer, decided on 19.03.2025. Consequently, the present Civil Writ Petition was allowed in terms of the order passed in Sharda Devi Chhajer (supra). The reasoning is based on the agreement of both parties that the present case is on all fours with the precedent case. The ratio decidendi is that if a matter is squarely covered by a binding precedent of a coordinate bench, the same principle should be applied. The operative direction is that the petition is allowed in terms of the cited judgment. No issues were expressly left undecided.
The Tribunal held that the notice dated May 1, 2024, issued under Section 148 of the Act is invalid and bad in law because it was issued by the Jurisdictional Assessing Officer (JAO) and not the Faceless Assessing Officer (FAO), which is contrary to Section 151A of the Act and the Scheme dated March 29, 2022. The Tribunal found that the Scheme mandates that notices under Section 148 must be issued through automated allocation and in a faceless manner by the NFAC. The Court relied on the decision in Hexaware Technologies Ltd. v. Assistant Commissioner of Income-tax, Circle 15(1)(2)1, and followed by a Division Bench of the same Court in Sharda Devi Chhajer Vs. The Income Tax Officer & Another, and by the Bombay High Court in Abhin Anilkumar Shah Vs. Income Tax Officer and Bmc Software India (P) Ltd. v. Deputy Commissioner of Income-tax. The Tribunal also noted the Telangana High Court's decision in Kankanala Ravindra Reddy v. ITO, which held that notices issued by JAOs are invalid. Due to these findings on the issue of notice issuance, the Tribunal deemed it unnecessary to answer the other points raised. The Tribunal quashed and set aside the notice dated May 1, 2024, and the order dated May 1, 2024. The Revenue's counsel stated that the judgment in Hexaware Technologies Ltd. is challenged before the Apex Court and requested the option to revive the notice if the Apex Court sets aside the law laid down therein. The petition was allowed.
The Tribunal quashed and set aside the notice dated 3rd May 2024 issued under Section 148 of the Income Tax Act, 1961, and the order dated 3rd May 2024 issued under Section 148A(d) of the Act. This decision was based on the concession made by the Revenue that the notice was invalid, aligning with the Court's prior ruling in Shree Cement Limited. The Court, however, kept open all rights and contentions of both parties to be agitated if the Hon'ble Apex Court were to interfere with the decision of the High Court of Bombay in Hexaware Technologies Ltd. The operative direction was to quash the impugned notice and order, effectively allowing the petition on the ground of invalid notice, while preserving the Revenue's right to pursue the matter further based on future Supreme Court pronouncements.
The High Court allowed the writ petition. It held that the petitioner was under no legal obligation to deduct tax at source at 5% under Section 195 of the Act in light of the beneficial provisions of the India-Mauritius DTAA read with Section 90(2) of the Act. The Court concurred with the reasoning of the Bombay High Court in Grasim Industries Ltd. (supra), stating that where the petitioner bonafidely deposited 5% under protest despite no statutory obligation, the Revenue could not be allowed to retain it and was bound to refund the same. The impugned action of the Revenue in denying the DTAA benefit was quashed. The respondents were directed to allow the petitioner to apply the beneficial lower rate of the DTAA, including a NIL rate if applicable, on interest payable to the foreign lender, in accordance with the DTAA and the approval granted under Section 194LC(2)(ia) of the Act. The Revenue was further directed to refund the 5% TDS amount deposited by the petitioner along with applicable interest under Section 244A of the Act within eight weeks.
The Court allowed the writ petition, quashing and setting aside the impugned notices issued under Section 148 and 148A of the Income Tax Act, 1961, to the extent that they were issued by the Jurisdictional Assessing Officer (JAO) without adhering to the faceless assessment scheme. The Court held that the mandate of Section 151A of the Act must be strictly followed, requiring adherence to an algorithm-based random assessing system for assessment and reassessment. The Court reasoned that any deviation from this faceless regime, particularly by retaining local control, undermines legislative wisdom and the gains of progressive steps towards transparency and efficiency. The Court granted liberty to the respondents to issue fresh notices in compliance with the CBDT Notification dated March 29, 2022, by keeping the Faceless Assessing Officer (FAO) as the assessing officer. The time spent during the litigation was excluded for computing the limitation for issuing fresh notices. The Court expressly left undecided any issues related to the merits of the assessment itself, stating parties could raise their respective issues before the Assessing Authority.
The High Court granted the Revenue's request to withdraw the appeal. The appeal was dismissed as withdrawn. The court explicitly stated that the formulated substantial question of law, though not detailed, was kept open. Furthermore, the department was granted liberty to file an appropriate application for revival of the appeal if the need arose in the future. No decision was made on the merits of the case.
The High Court held that the controversy in these writ petitions was squarely covered by its previous judgment in 'M/s. S.M. Industries vs. Union of India & Anr.' and 'Sharda Devi Chhajer'. The court observed that the dispute vis-à-vis the jurisdiction of Faceless and Jurisdictional Assessing Authorities had been settled. Based on the joint prayers and consensus, the court declared the notices issued by the Jurisdictional Assessing Officers as illegal and quashed them. The court granted liberty to the respondents to proceed via the mode of Faceless Assessment in terms of the judgment in 'Sharda Devi Chhajer'. The period during which the petitions remained pending was to be excluded for Faceless Assessing Officer proceedings. Any issues of limitation were to be decided by the Assessing Officer in terms of 'Rajeev Bansal'. Any other unadjudicated issues could be agitated again before the court. Proceedings under the Faceless Assessment Scheme were to be conducted strictly in accordance with law.