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The Tribunal quashed and set aside the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act. The Court found the facts of the Gujarat High Court case (Talati and Talati LLP) to be entirely different from the present case. The Court disagreed with the reasoning in Talati and Talati LLP, stating that the Gujarat High Court's judgment was not based on a comprehensive reading of the notification dated March 29, 2022, along with earlier CBDT orders dated March 31, 2021, and September 6, 2021. The Court noted that the Bombay High Court in Hexaware Technologies Ltd. and Abhin Anilkumar Shah, and the Telangana High Court in Venkataramana Reddy Patloola (whose order was upheld by the Supreme Court in SLP), had taken a different view. The Court held that the faceless regime, as framed under Section 151A and notified on March 29, 2022, does not include exceptions for orders dated March 31, 2021, and September 6, 2021. The Court granted liberty to the Revenue to revive the notice if the Apex Court were to interfere with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. The petitioner did not press other grounds.
The High Court held that the issue was no longer res integra and was squarely covered by a series of its own judgments. Specifically, the court referred to D.B. Civil Writ Petition No.19953/2025 (Ravindra Singh vs. Principal Commissioner of Income Tax) and D.B. Civil Writ Petition No.18987/2025 (Jaskaran Singh Brar vs. Principle Commissioner of Income Tax). These judgments had quashed and set aside reassessment proceedings initiated in search cases where notices under Section 148 were issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO). The court found that the Gujarat High Court's differing view in Talati and Talati LLP was based on a different factual matrix and an incomplete understanding of the relevant CBDT orders and the Bombay High Court's reasoning in Hexaware Technologies Ltd. The Supreme Court's dismissal of an SLP against a Telangana High Court order further supported the assessee's position. Consequently, the court quashed and set aside the notice dated 24.03.2024 issued under Section 148 and the assessment order dated 17.03.2025 passed under Section 147, keeping open all rights and contentions of the parties.
The High Court allowed the writ petition, quashing and setting aside the notice dated 27.03.2025 issued by the Jurisdictional Assessing Officer (JAO) and all consequential orders passed on that basis. The Court relied on the decision in D.B. Civil Writ Petition No.11787/2024, which held that notices issued under Section 148 by the JAO are invalid as they do not comply with the broader scheme of automated allocation based on algorithms and random assignment of assessing officers, as mandated by Section 151A of the Income Tax Act, 1961, and relevant CBDT Notifications. The Court emphasized that the mandate of Section 151A must be strictly followed, and JAOs lack the jurisdiction to issue such notices, which would weaken Section 151A. The Court also referenced another judgment from one of its judges, which held that circulars or instructions cannot override statutory provisions and that faceless assessment as envisaged under Section 144B must be followed. The time spent during the litigation was to be excluded for computing the limitation for issuing fresh notices, if required, in compliance with the law.
The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, is liable to be quashed and set aside. The Court found that the facts of the Gujarat High Court case (Talati and Talati LLP) were entirely different from the present case. The Court noted that the Gujarat High Court's reasoning was based on an understanding that the FAO does not draw a satisfaction note before issuing a Section 148 notice in search cases and that pre-requisite conditions cannot be fulfilled by an algorithm. However, the Court disagreed with this reasoning. The Court also considered the Bombay High Court's decision in Abhin Anilkumar Shah, which dealt with exceptions to the faceless mechanism for Central Charges, and the Supreme Court's dismissal of an SLP against a Telangana High Court order based on similar grounds. The Court quashed the notice, keeping open all rights and contentions of the parties and granting liberty to the revenue to revive the notice if the Apex Court were to interfere with the relevant judgments. The petitioner did not press other grounds.
The Tribunal held that the notice dated March 29, 2024, issued under Section 148 of the Income Tax Act, 1961, and the assessment order dated March 31, 2025, passed under Section 147 of the Act, were liable to be quashed and set aside. This decision was based on the reasoning that the issue was squarely covered by a series of judgments passed by the Rajasthan High Court, including *Ravindra Singh vs. Principal Commissioner of Income Tax (Central, Jaipur & Ors.)* and *Jaskaran Singh Brar vs. Principle Commissioner of Income Tax (Central) Jaipur & Ors.*. These judgments had quashed and set aside reassessment proceedings initiated in search cases where notices were issued by the JAO instead of the FAO. The court found the Gujarat High Court's reasoning in *Talati and Talati LLP* to be distinguishable and not applicable. The Supreme Court's dismissal of the Revenue's SLP against a similar Telangana High Court order further supported this view. The operative direction was to quash and set aside the impugned notice and assessment order.
The High Court quashed and set aside the notice dated 30.03.2024 issued under Section 148 and the assessment order dated 31.03.2025 passed under Section 147. The Court found that the issue was squarely covered by its previous judgments, including 'Ravindra Singh vs. Principal Commissioner of Income Tax (Central, Jaipur & Ors.)' and 'Jaskaran Singh Brar vs. Principle Commissioner of Income Tax (Central) Jaipur & Ors.'. These judgments had held that notices issued by the Jurisdictional Assessing Officer (JAO) in search cases, instead of a Faceless Assessing Officer (FAO), were invalid. The Court noted that the Gujarat High Court's differing view in 'Talati and Talati LLP' was distinguished and that the Supreme Court had dismissed an SLP against a Telangana High Court order on a similar issue. The Court explicitly stated that it did not agree with the Gujarat High Court's reasoning. The rights and contentions of all parties were kept open.
The High Court quashed and set aside the notice dated 27.03.2024 issued under Section 148 of the Income Tax Act, 1961, and the assessment order dated 29.03.2025 passed under Section 147 of the Act. The Court's decision was based on its previous judgments, particularly in Ravindra Singh's case, which had held that notices issued under Section 148 in search cases by a JAO, rather than an FAO, were invalid. The Court found that the Gujarat High Court's reasoning in Talati and Talati LLP was based on a different factual matrix and an incomplete understanding of the faceless assessment scheme and related CBDT orders. The dismissal of the Revenue's Special Leave Petition by the Supreme Court against a similar Telangana High Court order further supported the assessee's position. The Court explicitly stated that it was keeping open all rights and contentions of the parties.
The High Court quashed and set aside the notice dated March 22, 2024, issued under Section 148 of the Income Tax Act, 1961, and the assessment order dated March 29, 2025, passed under Section 147 of the Act. The Court's decision was based on the submission that the issue was covered by previous judgments of the High Court, particularly Ravindra Singh vs. Principal Commissioner of Income Tax and Jaskaran Singh Brar vs. Principle Commissioner of Income Tax. These judgments had held that reassessment proceedings initiated in search cases, where notices were issued by the Jurisdictional Assessing Officer (JAO) and not the Faceless Assessing Officer (FAO), were invalid. The Court noted that the Gujarat High Court's differing view in Talati and Talati LLP was distinguishable and that the Bombay High Court's decision in Hexaware Technologies Ltd. was supported by the Telangana High Court's ruling in Venkataramana Reddy Patloola, against which the Supreme Court had dismissed the Revenue's SLP. The Court explicitly stated that all rights and contentions of the parties were kept open. The operative direction was to quash and set aside the impugned notice and assessment order.
The High Court disposed of the petition in terms of its earlier order dated 21.08.2025 in D.B. Civil Writ Petition No.14638/2022 and connected matters. This order, in turn, referred to recent judgments of the Supreme Court in Assistant Commissioner of Income tax Vs. Vikram Kapahi ([2025] 170 taxmann.com 593 (SC)), Income Tax Officer Vs. Ashish Acharatlal Varaiya ([2024] 168 taxmann.com 588 (SC)), and Income Tax Officer Vs. Pradeep Himatlal Shah ([2025] 170 taxmann.com 472 (SC)). In these Supreme Court cases, Special Leave Petitions were disposed of in terms of the judgment in Rajeev Bansal (supra), with the observation that the Assessing Officer shall dispose of the petitions in accordance with the law laid down therein. Therefore, the High Court implicitly held that the reassessment proceedings were indeed barred by limitation as per the law laid down by the Supreme Court, and the petition was disposed of accordingly. No issue was expressly left undecided.
The High Court held that the writ petition is not maintainable as a statutory remedy of appeal is available to the petitioner under the Prohibition of Benami Property Transaction Act, 1988. The Court noted that the petitioner had previously been relegated to the appellate remedy in a similar challenge. While disposing of the writ petition, the Court granted the petitioner liberty to approach the Appellate Authority. Considering the pendency of the writ petition since 2020 and the existing interim protection, the Court directed that if the petitioner files an appeal within four weeks from the date of the order, the appellate authority shall consider it on merits. The interim protection granted earlier was extended until the filing of the appeal and for one week thereafter.
The High Court of Judicature for Rajasthan, Bench at Jaipur, disposed of the writ petition as infructuous. The Court noted the submission of the petitioner's counsel that an assessment order had been passed during the pendency of the petition and that the petitioner had pursued the remedy of appeal. Consequently, the Court found that no cause of action survived for the continuation of the writ petition. The petitioner was granted liberty to raise all the issues that were raised in the writ petition before the Appellate Authority. The Court did not decide the merits of the issues that would have been considered had the writ petition proceeded.
The High Court noted that the learned counsel for the petitioner, after receiving instructions from the client, stated that the instant civil writ petition was not being pressed. The court allowed the petitioner to raise all objections before the concerned authority. Consequently, the civil writ petition was disposed of as not pressed, with liberty granted to the petitioner as prayed for. The court directed that the authority concerned shall deal with all objections in accordance with law. No specific finding was given on the validity of the Section 153C order as the petition was not pressed.
The High Court allowed the petitioner's request to withdraw the writ petition. The court noted that the petitioner had filed an application under an Amnesty Scheme and consequently sought permission to withdraw the petition. The court's reasoning was based on the petitioner's stated intention to withdraw due to the Amnesty Scheme application. The operative direction was to dismiss the writ petition as withdrawn. No issues were decided on merits.
The Tribunal held that the mandate of Section 151A of the Income Tax Act, 1961, must be strictly followed. It found that the 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. The Court observed that 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 necessary. Consequently, the impugned notices issued by the JAO were quashed and set aside for want of jurisdiction. The Tribunal allowed the respondents 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 issuing fresh notices, if needed. The operative direction was to quash the notice dated 30.06.2025 and all consequential orders.
The Tribunal held that the mandate of Section 151A of the Income Tax Act, 1961, must be strictly followed. It was further held that the Jurisdictional Assessing Officer (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, the impugned notices were quashed and set aside. The Court granted liberty to the respondents to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, by keeping the FAO (Faceless Assessing Officer) as the assessing officer. The time spent during the pendency of the litigation was to be excluded for computing the limitation for issuing fresh notices, if needed. The operative direction was to quash the notice dated 05.06.2025 and all consequential orders.
The High Court held that the issue regarding the interpretation of the provisions for exemption benefits should be construed liberally, unlike provisions related to prosecution which require strict construction. The Court noted that the Tribunal had followed the decision of the Karnataka High Court, which was also supported by the Punjab and Haryana High Court and the Gauhati High Court. These High Courts had taken a view that allowed for the deduction even when the return was filed under Section 139(4), contrary to the Kerala High Court's decision. Therefore, the High Court found that the issue should be answered in favour of the assessee and against the department. The appeal filed by the Revenue was dismissed. The specific amounts of Rs. 1,60,00,000/- and Rs. 52,00,000/- were allowed as deductions to the assessee.
The Tribunal disagreed with the Revenue's contention that jurisdictional issues cannot be raised at any stage. The Tribunal agreed with the assessee that the assessment proceedings had to be set aside, relying on the judgment in Sharda Devi Chhajer (supra). This judgment, in turn, relied on the Bombay High Court's decision in Hexaware Technologies Ltd. (supra), which was noted to be under challenge before the Supreme Court. The Revenue sought liberty to revive the notice under Section 148 if the Apex Court interfered with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. The Court quashed and set aside the notice dated 13th March, 2025, issued under Section 148 and the assessment order dated 11.09.2025 passed under Section 147, with liberty as prayed by the Revenue. The Court clarified that the petitioner did not press other grounds. The petition was disposed of.
The Tribunal held that the mandate of Section 151A of the Income Tax Act, 1961, must be strictly followed, and there cannot be a way to circumvent it. It was further held that the JAO does not have the jurisdiction to issue notices under Section 148 of the Act, as this would weaken Section 151A and potentially lead to its diminishing 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, the impugned notices were quashed and set aside for want of jurisdiction. The court also held that circulars or instructions issued by the Board cannot override statutory provisions or make them obsolete. Instructions and circulars can only supplement statutory provisions and aid in their implementation. The time spent during litigation was to be excluded for computing the limitation for issuing fresh notices, if needed. The respondents were granted liberty to follow the prescribed procedure and issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, by keeping the FAO as the assessing officer.
The Tribunal quashed and set aside the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961. The Court found that the facts of the Gujarat High Court case in Talati and Talati LLP were entirely different from the present case. The Court disagreed with the understanding that the pre-requisites for issuing a notice under Section 148 in search cases cannot be met by a Faceless Assessing Officer (FAO). The Court noted that the Gujarat High Court was not made aware of the reasoning in the Bombay High Court case of Abhin Anilkumar Shah, which dealt with exceptions to the faceless mechanism for Central Charges and International Tax Charges. The Court also took note of the Supreme Court's dismissal of an SLP against a Telangana High Court order based on the Abhin Anilkumar Shah judgment. The revenue was granted liberty to revive the notice if the Apex Court were to interfere with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. The petitioner was not pressing other grounds at this stage.
The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, was liable to be quashed and set aside. The Court found that the facts of the Gujarat High Court case in *Talati and Talati LLP* were entirely different from the present case. The Court disagreed with the Gujarat High Court's understanding that the pre-requisite conditions for issuing a notice under Section 148 in search cases could not be met by a Faceless Assessing Officer (FAO) through an algorithm. The Court noted that the Bombay High Court's decision in *Hexaware Technologies Ltd.* was distinguished as being rendered in a case falling under Explanation 1 to Section 148, not Explanation 2. The Court also referred to the Supreme Court's dismissal of an SLP against a Telangana High Court order based on similar reasoning. The petitioners were granted liberty to revive the notice if the Apex Court were to interfere with the judgments in *Hexaware Technologies Ltd.*, *Sharda Devi Chhajer*, or *Shree Cement Limited*. The other grounds raised by the petitioners were not pressed.
The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, is liable to be quashed and set aside. The Court found that the facts of the Gujarat High Court case (Talati and Talati LLP) were entirely different from the present case. The Gujarat High Court's reasoning was based on an understanding that the FAO does not draw a satisfaction note before issuing a Section 148 notice in search cases, and that pre-requisite conditions for such notice require human application of mind, not algorithmic fulfillment. The Tribunal disagreed with this reasoning. The Court also noted that the Bombay High Court in Hexaware Technologies Ltd. distinguished its earlier ruling from cases involving Explanation 2 to Section 148. Furthermore, the Court referred to the Supreme Court's dismissal of an SLP against a Telangana High Court order, which was based on similar reasoning. The Tribunal quashed the notice, keeping open all rights and contentions of the parties, and granted liberty to the revenue to revive the notice if the Apex Court were to interfere with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited.
The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, is liable to be quashed and set aside. The Court found that the facts of the Gujarat High Court case in Talati and Talati LLP were entirely different from the present case and that the Gujarat High Court's reasoning was not based on a comprehensive understanding of all relevant judgments and the scheme. Specifically, the Court noted that the Gujarat High Court was not made aware of the Bombay High Court's reasoning in Abhin Anilkumar Shah, which dealt with exceptions to the faceless mechanism for Central Charges, nor the Supreme Court's dismissal of an SLP against a Telangana High Court order on similar grounds. The Court agreed with the petitioner's contention that a notice issued by a JAO, rather than an FAO, is invalid in this context. The Court quashed the notice with liberty to the revenue to revive it if the Apex Court interferes with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. Other grounds raised by the petitioner were not pressed.
The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, is liable to be quashed and set aside. The Court found the facts of the Gujarat High Court case (Talati and Talati LLP) to be entirely different from the present case. It noted that the Gujarat High Court was not made aware of the reasoning adopted by the Bombay High Court in Abhin Anilkumar Shah vs. Income Tax Officer, International Tax Ward Circle-4(2)(1), Mumbai and Ors., which dealt with exceptions to the faceless mechanism. The Court also considered the dismissal of an SLP by the Supreme Court against a Telangana High Court order in Venkataramana Reddy Patloola vs. Deputy Commissioner of Income Tax, Circle 1(1) and Ors. The Court concluded that the notice issued by the JAO was invalid. The revenue was granted liberty to revive the notice if the Apex Court were to interfere with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. Other grounds raised by the petitioner were not pressed.
The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, was liable to be quashed and set aside. The Court found that the facts of the Gujarat High Court case (Talati and Talati LLP) were entirely different from the present case. The Gujarat High Court's decision was based on an understanding that the Faceless Assessing Officer (FAO) does not draw a satisfaction note before issuing a notice under Section 148 in search cases, and that pre-requisite conditions would require human application of mind, not an algorithm. However, the Rajasthan High Court disagreed with this reasoning. The Court also noted that the Bombay High Court in Abhin Anilkumar Shah vs. Income Tax Officer, International Tax Ward Circle-4(2)(1), Mumbai, had held that CBDT orders creating exceptions for assessment proceedings in Central Charges did not alter the faceless scheme. The Supreme Court's dismissal of an SLP against a Telangana High Court order further supported this view. The notice was quashed, with liberty to the revenue to revive it if the Apex Court were to interfere with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited.
The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, is liable to be quashed and set aside. The Court found that the facts of the Gujarat High Court case in Talati and Talati LLP were entirely different from the present case. The Court distinguished the Gujarat High Court's reasoning, stating it was not based on a reading of the notification dated March 29, 2022, along with earlier CBDT orders dated March 31, 2021, and September 06, 2021. The Court agreed with the Bombay High Court's reasoning in Abhin Anilkumar Shah, which held that the scheme notified on March 29, 2022, did not include or refer to the earlier CBDT orders. The Court also noted that the Supreme Court had dismissed an SLP against a Telangana High Court order based on similar reasoning. The Court quashed the notice with liberty to the revenue to revive it if the Apex Court interferes with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. The petitioner did not press other grounds.
The Tribunal, following a co-ordinate bench's judgment in Majdoor Kisan Akali Dal Vs. Joint Commissioner of Income Tax-Exemptions & Ors. (D.B. Civil Writ Petition No.18885/2025), quashed and set aside the notice dated June 13, 2025, issued under Section 148 of the Income Tax Act, 1961. The reasoning was that the notice was issued by a Jurisdictional Assessing Officer (JAO) and not a Faceless Assessing Officer (FAO), which was held to be bad and invalid by this Court in Shree Cement Limited Vs. Assistant Commissioner of Income-Tax & Others, following Sharda Devi Chhajer Vs. The Income Tax Officer & Another and Hexaware Technologies Ltd. Vs. Assistant Commissioner of Income-tax, Circle 15(1)(2). The respondent revenue authority conceded this point. However, the Court granted liberty to the revenue to revive the notice if the Apex Court were to interfere with the aforementioned judgments in the pending SLP. The petition was disposed of on these terms, keeping open all rights and contentions of the parties. Any re-assessment order passed subsequently would also stand quashed and set aside.
The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, is liable to be quashed and set aside. The Court found the facts of the Gujarat High Court case in Talati and Talati LLP to be entirely different from the present case. The Court noted that the Gujarat High Court's reasoning was based on an understanding that the FAO does not draw a satisfaction note before issuing a notice under Section 148 in search cases, and that pre-requisite conditions for such notice cannot be fulfilled by an algorithm. The Tribunal disagreed with this reasoning. The Court also considered the Bombay High Court's decision in Abhin Anilkumar Shah, which held that CBDT orders creating exceptions for assessment proceedings in Central Charges and International Taxation Charges did not apply to the faceless scheme notified on March 29, 2022. Furthermore, the Supreme Court had dismissed the Revenue's SLP against a Telangana High Court order based on Venkataramana Reddy Patloola, finding no good reason to interfere with the High Court's impugned order. The Tribunal quashed the notice with liberty to the parties to take appropriate steps at a later stage if the Apex Court were to interfere with the relevant judgments. The petitioner stated that other grounds were not being pressed.
The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, was liable to be quashed and set aside. The Court found that the facts of the Gujarat High Court case in Talati and Talati LLP were entirely different from the present case. The Gujarat High Court's reasoning was based on an understanding that the FAO does not draw a satisfaction note before issuing a notice under Section 148 in search cases and that pre-requisite conditions under Explanation 2 to Section 148 require human application of mind, which cannot be fulfilled by an algorithm. The Tribunal disagreed with this reasoning. The Court also noted that the Bombay High Court's decision in Hexaware Technologies Ltd. was distinguished as applying to cases within Explanation 1 to Section 148, not Explanation 2. Furthermore, the Telangana High Court's decision in Venkataramana Reddy Patloola, which was based on similar reasoning, was upheld by the Supreme Court when it dismissed the Revenue's SLP. The Tribunal quashed the notice with liberty to the revenue to revive it if the Apex Court interferes with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. The petitioner did not press other grounds.
The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, is liable to be quashed and set aside. The reasoning was that the facts of the Gujarat High Court case (Talati and Talati LLP) were entirely different from the present case. The Tribunal found that the Gujarat High Court's decision was based on an understanding that the FAO does not draw a satisfaction note before issuing a notice under Section 148 in search cases, and that pre-requisite conditions for Section 148 notices require human application of mind, not algorithm. The Tribunal disagreed with this understanding. Furthermore, the Tribunal noted that the Supreme Court had dismissed an SLP against a Telangana High Court order in Venkataramana Reddy Patloola, which was based on similar reasoning. The Tribunal quashed the notice with liberty to the revenue to revive it if the Apex Court interferes with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. The petitioner did not press other grounds.
The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, is liable to be quashed and set aside. The Court found that the facts of the Gujarat High Court case (Talati and Talati LLP) were entirely different from the present case. The Gujarat High Court's reasoning was based on an understanding that the FAO does not draw a satisfaction note before issuing a notice under Section 148 in search cases and that pre-requisite conditions require human application of mind, not algorithms. The Rajasthan High Court disagreed with this reasoning. The Court noted that the Bombay High Court in Abhin Anilkumar Shah had distinguished Hexaware Technologies Ltd. as being applicable to Explanation 1 to Section 148, not Explanation 2. Furthermore, the Supreme Court had dismissed an SLP against a Telangana High Court order based on Venkataramana Reddy Patloola, upholding the principle that such notices issued by JAOs are invalid. The Court quashed the notice with liberty to the revenue to revive it if the Apex Court interferes with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited.
The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, was liable to be quashed and set aside. The Court found that the facts of the Gujarat High Court case (Talati and Talati LLP) were entirely different from the present case. The Gujarat High Court's reasoning was based on a reading of Explanation 2 to Section 148 and an understanding that the pre-requisites for issuing a Section 148 notice in search cases could not be met by an FAO. The Rajasthan High Court disagreed with this reasoning. The Court also noted that the Gujarat High Court was not made aware of the Bombay High Court's reasoning in Abhin Anilkumar Shah, which dealt with exceptions to the faceless mechanism for Central Charges. Furthermore, the Supreme Court had dismissed an SLP against a Telangana High Court order based on Venkataramana Reddy Patloola, which was similar to the present issue. The revenue was granted liberty to revive the notice if the Apex Court were to interfere with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. Consequently, the notice under Section 148 was quashed and set aside.
The High Court, while acknowledging that the case technically fell within the exception recognized under the CBDT Circulars, opted to dismiss the appeal. The Court reasoned that in view of the insignificant tax effect (Rs. 1,11,136/-) and the overall policy of reducing unnecessary litigation, it would be appropriate to close the present appeal. The Court explicitly stated that the dismissal was without entering into the merits of the controversy. The substantial question of law proposed by the appellant was kept open for consideration in a more appropriate case where the factual matrix or tax effect justifies judicial examination. The dismissal was based solely on the aforementioned circulars and the policy of reducing litigation.
The High Court held that the mandate of Section 151A of the Income Tax Act, 1961, must be strictly followed. It was decided that the Jurisdictional Assessing Officer (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, the impugned notices were quashed and set aside for want of jurisdiction. The Court clarified that the time spent during the pendency of the litigation would be excluded for computing the limitation period for issuing fresh notices, if required, in compliance with the CBDT Notification dated 29.03.2022, keeping the Faceless Assessing Officer (FAO) as the assessing officer. The judgment also referenced a prior decision by one of the judges that circulars or instructions cannot override statutory provisions.
The Tribunal held that the writ petition had become infructuous. This finding was based on the submission made by the learned counsel for the petitioner. Consequently, the Tribunal dismissed the writ petition as having become infructuous. The reasoning provided is solely that the petitioner's counsel stated the matter was infructuous. The ratio decidendi would be that a writ petition, when stated to be infructuous by the petitioner, will be dismissed on that ground. No other issues were decided, and no operative directions were issued beyond the dismissal of the petition. Pending applications were also disposed of.
The Tribunal held that the mandate of Section 151A of the Income Tax Act, 1961, has to be strictly followed. It was further held that a JAO shall not have the jurisdiction to issue notices under Section 148 of the Act, as this would weaken Section 151A and potentially lead to its diminishing 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, the impugned notices were quashed and set aside for want of jurisdiction. The Court allowed the respondents liberty to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, by keeping the FAO as the assessing officer. The time spent during the pendency of the litigation was to be excluded for computing the limitation for issuing fresh notices. The operative direction was to quash the notice dated 30.06.2025 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 valid when the assessment or reassessment is to be conducted under the faceless assessment scheme as envisaged under Section 144B. The Court found that such notices, issued without adherence to the algorithm-based random assessing system mandated by Section 151A and the CBDT's scheme, are contrary to the provisions of the Act. The reasoning is that Section 151A mandates strict adherence to the algorithm-based random system for issuing notices for assessment and reassessment, and the JAO lacks the jurisdiction to issue such notices, which would weaken Section 151A. The Court quashed the impugned notice dated 28.06.2025 and any consequential orders. 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 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 requires adherence to an algorithm-based random assessing system for assessment and reassessment under Sections 147, 148, and 148A, must be strictly followed. Issuing notices by a JAO would weaken Section 151A and potentially lead to its diminished activation. The court emphasized that the legislative intention, vision, and wisdom behind introducing technology and a faceless regime for enhanced efficiency, transparency, and impartiality must be given full meaning. Any attempt to manually control or defeat the technology goes against the legislative purpose. Consequently, the impugned notices were quashed and set aside for want of jurisdiction. The court also noted that the time spent during the pendency of the litigation would be excluded for computing the limitation for issuing fresh notices, if required, in compliance with the CBDT Notification dated 29.03.2022, by keeping the Faceless Assessing Officer (FAO) as the assessing officer.
The High Court, upon being informed by the learned counsels for both the petitioner (assessee) and the respondent (revenue) that the controversy involved in the present writ petition was no longer res integra and had been resolved by a coordinate Bench order dated 16.09.2025 in the case of Shri Ravi Agarwal versus Income-Tax Officer & Ors. (DB Civil Writ Petition No.11981/2025), ordered accordingly. This implies that the Court accepted the submission that the present case should be decided on the same lines as the precedent. The operative direction was to dispose of the writ petition in similar terms as the cited case. No specific issue was left undecided; rather, the decision was based on the established precedent.
The High Court of Judicature for Rajasthan, Bench at Jaipur, disposed of the writ petition in terms of a coordinate Bench order dated 09.09.2025 passed in the case of Dileep Singh Shekhawat (2021-22) versus Union of India & Anr. (DB Civil Writ Petition No.6462/2025). The reasoning provided is that the controversy involved in the present petition is no longer res integra and has been resolved by the aforementioned coordinate Bench order. Therefore, the court found it appropriate to dispose of the present writ petition in similar terms. The operative direction was to dispose of the writ petition accordingly. Any pending applications were also disposed of.
The Tribunal, acknowledging the agreement between the parties on one of the grounds, quashed and set aside the notice dated June 19, 2025, issued under Section 148 of the Income Tax Act. The court relied on its previous judgments in Shree Cement Limited, which followed Sharda Devi Chhajer and Hexaware Technologies Ltd., holding that such notices issued by a JAO instead of an FAO are invalid. The revenue was granted liberty to revive the notice if the Apex Court were to overturn these precedents. The petitioner reserved the right to raise other grounds at an appropriate stage. The petition was disposed of, and any re-assessment order passed would also stand quashed and set aside.
The High Court quashed and set aside the notice dated June 26, 2025, issued under Section 148 of the Income Tax Act, 1961. The Court agreed with the petitioner's submission that such a notice, issued by a Jurisdictional Assessing Officer (JAO) and not a Faceless Assessing Officer (FAO), is invalid, citing its own previous judgments in Shree Cement Limited, Sharda Devi Chhajer, and Hexaware Technologies Ltd. The Court granted the petitioner's prayer for the present, keeping open all rights and contentions of both parties. Crucially, the Court granted liberty to the Revenue to revive the notice if the Supreme Court were to interfere with the aforementioned judgments. The petition was disposed of, and any re-assessment order passed after the petition's filing was also to stand quashed and set aside.
The High Court quashed and set aside the notice dated June 26, 2025, issued under Section 148 of the Income Tax Act, 1961. The Court's decision was based on the agreement between the parties that one of the grounds raised by the petitioner was covered by a previous judgment of the High Court. Specifically, the Court referred to its own decision in Shree Cement Limited, which followed Sharda Devi Chhajer and Hexaware Technologies Ltd., holding that a Section 148 notice issued by a JAO and not an FAO is bad and invalid. The Revenue, while agreeing to the quashing of the notice for the present, sought liberty to revive it if the Supreme Court were to alter the legal position established in the aforementioned High Court judgments. The Court granted this liberty to the Revenue. The operative direction was to quash and set aside the notice with liberty as prayed. The petition was disposed of, keeping open all rights and contentions of the parties. Any re-assessment order passed after the filing of the petition was also to stand quashed and set aside.
The Tribunal (High Court) noted the submission made by the counsel for the petitioner. The petitioner's counsel stated that the writ petition had become infructuous. This was due to the fact that the order that was impugned in the present petition had already been quashed and set aside in a companion matter, D.B. Civil Writ Petition No. 6485/2025, which involved Gaze Fashion Trade Limited. Based on this submission, the High Court found no further necessity to adjudicate the present petition on its merits. The principle derived is that if the subject matter of a challenge is rendered moot by a prior or concurrent judicial decision, the subsequent proceeding may be disposed of as infructuous. The operative direction was to dispose of the petition accordingly.
The Tribunal held that the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, is liable to be quashed and set aside. The Court found that the facts of the Gujarat High Court case in Talati and Talati LLP were entirely different from the present case. The Gujarat High Court's decision was based on a reading of Explanation 2 to Section 148 and an understanding that pre-requisites for issuing a notice under Section 148 in search cases could not be met by a Faceless Assessing Officer (FAO). The Tribunal disagreed with this reasoning. The Court noted that the Bombay High Court in Hexaware Technologies Ltd. had distinguished cases falling under Explanation 2 from those under Explanation 1. Furthermore, the Tribunal referred to the Bombay High Court's decision in Abhin Anilkumar Shah, which dealt with exceptions carved out by CBDT orders for assessment proceedings in Central and International Taxation Charges, and how these exceptions were not incorporated into the faceless assessment scheme notified on March 29, 2022. The dismissal of an SLP by the Supreme Court against a Telangana High Court order based on Venkataramana Reddy Patloola further supported the view against the revenue. The Tribunal quashed the notice with liberty to the revenue to revive it if the Apex Court interferes with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. Other grounds raised by the petitioner were not pressed.
The Tribunal quashed and set aside the notice dated June 10, 2025, issued under Section 148 of the Income Tax Act, 1961. The reasoning was based on the established precedent of the High Court in Shree Cement Limited, which followed Sharda Devi Chhajer and Hexaware Technologies Ltd., holding that such notices issued by a JAO instead of an FAO are invalid. The Court granted the petitioner's prayer for the present. However, acknowledging the pendency of an SLP before the Apex Court concerning the Hexaware Technologies Ltd. judgment, the Court granted liberty to the Revenue to revive the notice issued under Section 148 if the Apex Court were to interfere with the judgments in Hexaware Technologies Ltd., Sharda Devi Chhajer, or Shree Cement Limited. The petitioner reserved its right to raise other grounds at an appropriate stage. The petition was disposed of, and any re-assessment order passed was also to stand quashed and set aside.
The Tribunal quashed and set aside the notice dated June 13, 2025, issued under Section 148 of the Income Tax Act, 1961. This decision was based on the concession made by the revenue that the notice was issued by a Jurisdictional Assessing Officer (JAO) and not a Faceless Assessing Officer (FAO), which is contrary to established High Court precedents. The Court relied on its own judgments in Shree Cement Limited, Sharda Devi Chhajer, and Hexaware Technologies Ltd. The revenue was granted liberty to revive the notice if the Apex Court were to interfere with the aforementioned High Court judgments. The petition was disposed of with this liberty, and any re-assessment order passed would also stand quashed and set aside. All other grounds were reserved by the petitioner for an appropriate stage.