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The High Court allowed the writ petition, quashing and setting aside the notice dated 27.08.2024 issued by the Jurisdictional Assessing Officer (JAO) for Assessment Year 2018-2019 and all consequential orders. The Court relied on its previous decisions in D.B. Civil Writ Petition No.11787/2024 and CWP No.21509/2023. The reasoning was that the mandate of Section 151A of the Act, requiring adherence to an algorithm-based random assessing system for assessment and reassessment under Sections 147, 148, and 148A, must be strictly followed. The JAO does not have the jurisdiction to issue notices under Section 148, as doing so weakens Section 151A and goes against the legislative purpose of making the system transparent and impartial through technology. The Court held that notices issued by the JAO under Section 148, without conducting faceless assessment as envisaged under Section 144B, are contrary to the provisions of the Act. The respondents were granted liberty to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, keeping the FAO as the assessing officer. The time spent during the litigation was to be excluded for limitation purposes for 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 such notices by a JAO would weaken Section 151A and potentially lead to its diminishing activation. The Court emphasized that the legislative intention, vision, and wisdom behind infusing technology for a transparent and impartial taxation system, including randomized allocations via algorithms, must be given full meaning. The co-ordinate bench's decision in Sharda Devi Chhajer & Anr. Vs The Income Tax Officer & Anr. was followed. Consequently, the impugned notice dated 28.06.2025 issued by the JAO for Assessment Year 2021-2022 and all consequential orders were quashed and set aside. 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 fresh notices.
The Tribunal held that jurisdiction vests exclusively with the Faceless Assessing Officer. Therefore, as long as the judgments in Sharda Devi Chhajer and Hexaware Technologies Ltd. continue to hold the field, the issuance of notices by the Jurisdictional Assessing Officer is legally unsustainable. Consequently, the impugned notice dated 18.11.2022 issued under Section 148 and the consequential assessment order dated 21.03.2024, along with all proceedings, were quashed for lack of jurisdiction. Liberty was granted to the Revenue to initiate proceedings afresh through the Faceless Assessing Officer, subject to compliance with limitation and other legal requirements. The Revenue was also granted liberty to act in accordance with any reversal or material modification of the Hexaware Technologies Ltd. and Sharda Devi Chhajer judgments by the Supreme Court. The petitioner stated that other grounds were not pressed and would be kept open. The writ petition was disposed of.
The Tribunal held that jurisdiction vests exclusively with the Faceless Assessing Officer. Therefore, so long as the judgments in Sharda Devi Chhajer and Hexaware Technologies Ltd. continue to hold the field, the issuance of notices by the Jurisdictional Assessing Officer is legally unsustainable. Accordingly, the impugned notice dated 20.03.2025 issued under Section 148 of the Income Tax Act, 1961, for A.Y. 2022-2023, along with all consequential proceedings, were quashed for lack of jurisdiction. Liberty was granted to the Revenue to initiate proceedings afresh through the Faceless Assessing Officer, in accordance with law, subject to limitation and other legal requirements. The Revenue was also granted liberty to act afresh if the aforementioned judgments are reversed, set aside, or materially modified by the Hon'ble Supreme Court. The petitioner stated that other grounds raised were not pressed at that stage.
The Tribunal held that the notice dated 14.03.2023 issued under Section 148 of the Income Tax Act, 1961, for AY 2017-18, and the consequential assessment order dated 23.03.2024 passed under Section 147 of the Act, along with all proceedings, are quashed for lack of jurisdiction. This decision is based on the established principle that jurisdiction vests exclusively with the Faceless Assessing Officer, and notices issued by the Jurisdictional Assessing Officer are legally unsustainable, as per the High Court's own prior judgments in Sharda Devi Chhajer and the Bombay High Court's decision in Hexaware Technologies Ltd. The court granted liberty to the respondents-Revenue to initiate proceedings afresh through the Faceless Assessing Officer, subject to legal requirements and limitations. Furthermore, liberty was granted to the Revenue to act in accordance with any reversal or material modification of the Hexaware Technologies Ltd. and Sharda Devi Chhajer judgments by the Hon'ble Supreme Court. The petitioner stated that other grounds were not pressed and would be urged later, and undertook to withdraw a related appeal.
The Tribunal, in respectful agreement with the Division Bench of the Rajasthan High Court in Sharda Devi Chhajer (supra) and the Bombay High Court in Hexaware Technologies Ltd. (supra), held that jurisdiction vests exclusively with the Faceless Assessing Officer. Consequently, as long as these judgments remained in force, notices issued by the Jurisdictional Assessing Officer were legally unsustainable. The impugned notice dated 20.03.2025 issued under Section 148 of the Income Tax Act, 1961, for A.Y. 2022-2023, along with all consequential proceedings, were quashed for lack of jurisdiction. Liberty was granted to the Revenue to initiate proceedings afresh through the Faceless Assessing Officer, subject to legal requirements and limitation. The Revenue was also granted liberty to act afresh if the Supreme Court reversed or materially modified the judgments in Hexaware Technologies Ltd. and Sharda Devi Chhajer.
The High Court held that jurisdiction vests exclusively with the Faceless Assessing Officer. Therefore, as long as the judgments in Sharda Devi Chhajer and Hexaware Technologies Ltd. hold the field, notices issued by the Jurisdictional Assessing Officer are legally unsustainable. Consequently, the impugned notice dated 20.03.2025 issued under Section 148 of the Income Tax Act, 1961, for AY 2023-2024, along with all consequential proceedings, were quashed for lack of jurisdiction. The Revenue was granted liberty to initiate proceedings afresh through the Faceless Assessing Officer, subject to compliance with statutory frameworks, limitation, and other legal requirements. Furthermore, the Revenue was granted liberty to act afresh if the Supreme Court reverses, sets aside, or materially modifies the judgments in Hexaware Technologies Ltd. and Sharda Devi Chhajer.
The Tribunal, in respectful agreement with the Division Bench of the Rajasthan High Court in Sharda Devi Chhajer (supra) and the Bombay High Court in Hexaware Technologies Ltd. (supra), held that jurisdiction vests exclusively with the Faceless Assessing Officer. Consequently, as long as these judgments remain in effect, notices issued by the Jurisdictional Assessing Officer are legally unsustainable. The impugned notice dated March 20, 2025, issued under Section 148 of the Income Tax Act, 1961, for AY 2022-2023, along with all consequential proceedings, were quashed for lack of jurisdiction. Liberty was granted to the Revenue to initiate proceedings afresh through the Faceless Assessing Officer in accordance with law, subject to compliance with limitation and other legal requirements. The Revenue was also granted liberty to act afresh if the judgments in Hexaware Technologies Ltd. and Sharda Devi Chhajer are reversed or materially modified by the Supreme Court. The petitioner stated that other grounds were not pressed at this stage.
The Tribunal, in respectful agreement with the Division Bench of the Rajasthan High Court in Sharda Devi Chhajer (supra) and the Bombay High Court in Hexaware Technologies Ltd. (supra), held that jurisdiction vests exclusively with the Faceless Assessing Officer. Consequently, as long as these judgments remain in effect, notices issued by the Jurisdictional Assessing Officer are legally unsustainable. The impugned notice dated March 22, 2024, issued under Section 148 for AY 2020-2021, and the consequential assessment order dated February 11, 2025, passed under Section 147 read with Section 144-B, along with all consequential proceedings, were quashed for lack of jurisdiction. Liberty was granted to the Revenue to initiate proceedings afresh through the Faceless Assessing Officer, subject to compliance with limitation and other legal requirements. The Revenue was also granted liberty to act afresh if the judgments in Hexaware Technologies Ltd. and Sharda Devi Chhajer are reversed or materially modified by the Supreme Court. The petitioner stated that other grounds were not pressed and reserved the right to urge them later, undertaking to withdraw the appeal filed within two weeks.
The High Court, referencing its own prior judgments in D.B. Civil Writ Petition No.11787/2024 (Sharda Devi Chhajer & Anr. Vs The Income Tax Officer & Anr.) and the order passed by one of the judges in CWP No.21509/2023 (Jasjit Singh vs. Union of India & Ors.), held that notices issued by the JAO under Section 148 of the Act, 1961, and subsequent proceedings initiated without conducting faceless assessment as envisaged under Section 144B of the Act, 1961, are contrary to the provisions of the Act. The Court reiterated that the mandate of Section 151A of the Act, 1961, must be strictly followed, and the JAO lacks the jurisdiction to issue such notices, as it weakens Section 151A. While the impugned notices and proceedings were found to be without jurisdiction and liable to be quashed, the Court noted that a final order had been passed and an appeal was pending before the Commissioner of Income Tax (Appeals). To avoid making the appeal redundant, the Court directed the petitioner to file an application before the CIT(A), who was directed to consider it and pass appropriate orders within 15 days, taking into account the High Court's judgments quashing proceedings based on notices issued by the JAO. The time spent during the litigation was to be excluded for limitation purposes for fresh notices, if needed.
The Tribunal noted that the issue raised by the petitioner regarding the invalidity of notices issued by a Jurisdictional Assessing Officer in contravention of the faceless regime and Section 151A of the Income Tax Act, 1961, has been adjudicated by a coordinate bench in D.B. Civil Writ Petition No.11787/2024: Sharda Devi Chhajer & Anr. Vs The Income Tax Officer & Anr. and other connected writ petitions decided on 19.03.2025. The coordinate bench held that notices issued under Section 148 by a JAO are not sustainable as they do not adhere to the automated allocation based on algorithms and random assignment of assessing officers, as mandated by the scheme and Section 151A. The court also referred to an order by one of its judges in CWP No.21509/2023: Jasjit Singh vs. Union of India & Ors., which reiterated that circulars cannot override statutory provisions and that notices issued by JAOs without conducting faceless assessment are contrary to the Act. However, in the present case, a final assessment order was passed after the notice was issued by the JAO, and an appeal against this order is pending before the CIT(A). The court found it inappropriate to pass orders that would render the pending appeal redundant. Therefore, the petitioner was directed to file an application before the concerned Commissioner of Income Tax (Appeals), who was directed to pass appropriate orders within 15 days, taking into consideration the judgments of the High Court quashing proceedings based on notices issued by JAOs.
The High Court, referencing its own prior judgments in D.B. Civil Writ Petition No.11787/2024 (Sharda Devi Chhajer & Anr. Vs The Income Tax Officer & Anr.) and the order passed by one of the judges in CWP No.21509/2023 (Jasjit Singh vs. Union of India & Ors.), held that notices issued by the JAO under Section 148 of the Act, 1961, and subsequent proceedings initiated without adhering to the faceless assessment regime as envisaged under Section 144B of the Act, 1961, are contrary to the provisions of the Act. The Court acknowledged that the present case involved a pending appeal before the CIT(A) against the final assessment order, which was passed after the notice by the JAO. To avoid making the appeal redundant, the Court directed the petitioner to file an application before the concerned Commissioner of Income Tax (Appeal). The CIT(A) is to consider this application and pass appropriate orders within 15 days, taking into account the court's prior judgments quashing proceedings based on notices issued by the JAO. The writ petition was disposed of with this direction.
The High Court acknowledged that the notices were issued by the JAO, and the final order was passed after the faceless regime was introduced. Citing the judgments in Sharda Devi Chhajer and Jasjit Singh, the Court held that proceedings could not have been initiated by the JAO, nor could the faceless regime have later passed orders if the initial notice was invalid. However, since an appeal had already been preferred against the final assessment order, the Court deemed it inappropriate to pass an order that would render the pending appeal redundant. Consequently, the Court directed the petitioner to file an application before the concerned Commissioner of Income Tax (Appeals). The CIT(A) was directed to consider this application and pass appropriate orders within 15 days, taking into account the High Court's previous judgments quashing proceedings based on notices issued by the JAO. The present Civil Writ Petition was disposed of.
The Court noted that the final assessment order was passed after the notice was issued by the Jurisdictional Assessing Officer, even though the faceless regime had been introduced. Citing previous judgments in Jasjit Singh vs. Union of India & Ors. and Sharda Devi Chhajer & Anr. Vs The Income Tax Officer & Anr., the Court reiterated that proceedings could not have been initiated by the JAO, and the faceless regime could not subsequently validate orders passed without adhering to the prescribed procedure. However, as an appeal against the final order was already preferred and pending, the Court deemed it inappropriate to make the appeal redundant by quashing the proceedings outright. Instead, the Court directed the petitioner to file an application before the Commissioner of Income Tax (Appeals), who was instructed to consider the matter and pass appropriate orders within 15 days, taking into account the Court's prior judgments on quashing proceedings initiated by the JAO. The time spent during the pendency of the litigation was to be excluded for computing the limitation for issuing fresh notices, if necessary.
The Court noted that a co-ordinate bench had previously held in Sharda Devi Chhajer & Anr. Vs The Income Tax Officer & Anr. that notices issued under Section 148 by the JAO are not sustainable and must be quashed as they do not comply with the mandate of Section 151A of the Act and the faceless assessment scheme. The Court also referred to an order by one of its judges in Jasjit Singh vs. Union of India & Ors., which reiterated that circulars cannot override statutory provisions and that notices issued by the JAO without conducting faceless assessment are contrary to the Act. However, in the present case, a final assessment order had been passed and an appeal was pending. The Court deemed it inappropriate to pass an order that would render the pending appeal redundant. Therefore, the Court directed the petitioner to file an application before the Commissioner of Income Tax (Appeals), who was directed to consider it and pass appropriate orders within 15 days, taking into account the previous judgments quashing proceedings based on notices issued by the JAO. The writ petition was disposed of on these directions.
The Tribunal held that notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, are liable to be quashed. This is because 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 reasoned that allowing JAOs to issue such notices would weaken Section 151A and diminish its activation. The legislative intent behind introducing technology and an algorithm for randomized allocation of cases, as outlined in Part 2(i)(a) of the Scheme and emphasized in CBDT Circulars, is to enhance transparency and impartiality. Any attempt to circumvent this technological mandate, including retaining local control, undermines the legislative wisdom and the gains of the progressive faceless regime. The co-ordinate bench's decision in Sharda Devi Chhajer was followed. The impugned notice dated 01.03.2025 and consequential orders were quashed. Liberty was granted to the respondents to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, keeping the FAO as the assessing officer. The time spent during litigation was excluded for limitation purposes.
The Tribunal held that the issuance of notices by the Jurisdictional Assessing Officer, instead of the Faceless Assessing Officer, is legally unsustainable as jurisdiction vests exclusively with the Faceless Assessing Officer, citing the judgments in Sharda Devi Chhajer and Hexaware Technologies Ltd. The impugned notice dated 27.03.2025, issued under Section 148 of the Income Tax Act, 1961, for AY 2021-2022, along with all consequential proceedings, was quashed for lack of jurisdiction. However, liberty was granted to the Revenue to initiate proceedings afresh through the Faceless Assessing Officer in accordance with law, subject to limitation and other legal requirements. The Revenue was also granted liberty to act afresh if the judgments in Hexaware Technologies Ltd. and Sharda Devi Chhajer are reversed, set aside, or materially modified by the Supreme Court. The petitioner stated that other grounds were not pressed at this stage.
The Tribunal, in respectful agreement with the views of the Rajasthan High Court in Sharda Devi Chhajer and the Bombay High Court in Hexaware Technologies Ltd., held that jurisdiction vests exclusively with the Faceless Assessing Officer. Consequently, the issuance of notices by the Jurisdictional Assessing Officer is legally unsustainable as long as these judgments hold the field. Accordingly, the impugned notice dated 27.03.2025 issued under Section 148 of the Income Tax Act, 1961, for A.Y. 2022-2023, along with all consequential proceedings, were quashed for lack of jurisdiction. Liberty was granted to the Revenue to initiate proceedings afresh through the Faceless Assessing Officer, in accordance with law and subject to limitation and other legal requirements. The Tribunal also clarified that if the judgments in Hexaware Technologies Ltd. and Sharda Devi Chhajer are reversed, set aside, or materially modified by the Hon'ble Supreme Court, the Revenue shall be at liberty to act afresh accordingly. Other grounds raised by the petitioner were not pressed at this stage.
The Tribunal held that the notice dated 27.03.2025, issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2023-2024, along with all consequential proceedings, is quashed for lack of jurisdiction. The reasoning was based on the respectful agreement with the view taken by the Division Bench of the Rajasthan High Court in Sharda Devi Chhajer and the Bombay High Court in Hexaware Technologies Ltd., which established that jurisdiction vests exclusively with the Faceless Assessing Officer. Therefore, notices issued by the Jurisdictional Assessing Officer are legally unsustainable as long as these judgments hold the field. The operative direction is to quash the impugned notice. Liberty was granted to the Revenue to initiate proceedings afresh through the Faceless Assessing Officer, subject to compliance with limitation and other legal requirements. It was further clarified that if the judgments in Hexaware Technologies Ltd. and Sharda Devi Chhajer are reversed or materially modified by the Supreme Court, the Revenue shall be at liberty to act accordingly. The other grounds raised by the petitioner were not pressed at this stage.
The Tribunal held that notices issued under Section 148 of the Income Tax Act, 1961, by the JAO for assessment and reassessment, which do not adhere to the algorithm-based random assignment system as envisaged by the faceless assessment scheme and Section 151A of the Act, are invalid. The court reasoned that the legislative intention behind Section 151A and the faceless regime, aimed at transparency and efficiency through technology, would be undermined if local control and manual allocation persisted. The JAO lacks the jurisdiction to issue such notices, as it weakens Section 151A and diminishes its activation. Therefore, 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, 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 operative direction was to quash the notice dated 28.06.2025 and all consequential orders.
The Tribunal, in respectful agreement with the Division Bench of the High Court in Sharda Devi Chhajer (supra) and the Bombay High Court in Hexaware Technologies Ltd. (supra), held that jurisdiction vests exclusively with the Faceless Assessing Officer. Consequently, as long as these judgments remain in force, notices issued by the Jurisdictional Assessing Officer are legally unsustainable. The impugned notice dated 18.11.2022 under Section 148 and the consequential assessment order dated 20.03.2024 under Section 147, along with all proceedings, were quashed for lack of jurisdiction. Liberty was granted to the respondents-Revenue to initiate proceedings afresh through the Faceless Assessing Officer, subject to compliance with limitation and other legal requirements. The Revenue was also granted liberty to act afresh if the Supreme Court reverses, sets aside, or materially modifies the judgments in Hexaware Technologies Ltd. and Sharda Devi Chhajer. The petitioner stated that other grounds were not pressed and reserved the right to urge them later, undertaking to withdraw the appeal already filed.
The Rajasthan High Court, Jaipur Bench, noted that the issue raised by the petitioner had been adjudicated by a coordinate bench in D.B. Civil Writ Petition No.11787/2024: Sharda Devi Chhajer & Anr. Vs The Income Tax Officer & Anr., and other connected writ petitions decided on 19.03.2025. This prior judgment held that notices issued under Section 148 of the Act by the JAO for assessment and reassessment do not withstand the broader scheme of law requiring automated allocation based on an algorithm. The Court emphasized that Section 151A of the Act mandates adherence to the algorithm-based random assessing system, and notices issued by the JAO under Section 148 and 148A are liable to be quashed. However, in the present case, a final order was passed after the notice was issued by the JAO, and an appeal was already preferred against this final order. The Court found it inappropriate to pass orders that would render the pending appeal redundant. Therefore, the Court directed the petitioner to file an application before the concerned Commissioner of Income Tax (Appeal), who was directed to consider it and pass appropriate orders within 15 days, taking into account the previous judgments of the High Court quashing proceedings based on notices issued by the JAO.
The Tribunal held that the issuance of notices by the Jurisdictional Assessing Officer, instead of the Faceless Assessing Officer, is legally unsustainable as jurisdiction vests exclusively with the Faceless Assessing Officer. This decision was based on the respectful agreement with the views taken in Sharda Devi Chhajer (supra) and Hexaware Technologies Ltd. (supra). Consequently, the impugned notice dated 29.03.2024 under Section 148 and the consequential assessment order dated 27.12.2024 under Section 147, along with all proceedings, were quashed for lack of jurisdiction. The Revenue was granted liberty to initiate proceedings afresh through the Faceless Assessing Officer, subject to compliance with limitation and other legal requirements. Furthermore, the Revenue was granted liberty to act afresh if the Supreme Court reverses or materially modifies the judgments in Hexaware Technologies Ltd. and Sharda Devi Chhajer. The petitioner stated that other grounds were not pressed and would be kept open. The writ petition was disposed of.
The High Court allowed the writ petition, quashing and setting aside the notice dated 27.06.2025 issued by the Jurisdictional Assessing Officer (JAO) for Assessment Year 2021-22, and all consequential orders. The Court followed the decision of a co-ordinate bench in D.B. Civil Writ Petition No.11787/2024, which held that notices issued under Section 148 of the Income Tax Act, 1961, by the JAO are invalid when they do not adhere to the broader scheme of automated allocation based on algorithms and random assignment of assessing officers, as mandated by the faceless assessment regime and Section 151A of the Act. The Court reasoned that the legislative intent behind Section 151A and the faceless regime is to enhance transparency and impartiality, and any attempt to revert to local control undermines this purpose. The ratio decidendi is that adherence to the algorithm-based random assessing system is mandatory for assessments and reassessments under Sections 147, 148, and 148A, in light of the sanction under Section 151A. The respondents were granted liberty to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, keeping the Face-less 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 Tribunal granted the Revenue's request to withdraw the appeal. The appeal was accordingly dismissed as withdrawn. The formulated substantial question of law was expressly kept open. The department was granted liberty to move an appropriate application for revival of the appeal if the need arises. The reasoning for the withdrawal was based on the tax effect being below Rupees Two Crores, as per the CBDT circular dated 17.09.2024. No decision was made on the merits of the substantial question of law.
The High Court held that the present writ petition is disposed of in terms of its previous order dated August 21, 2025, in the case of *Rajesh Sharma*. The observations and directions made in that order shall apply mutatis mutandis to the present case. The previous order 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* and to determine if the proceedings were time-barred. Cases involving amounts less than Rs. 50,00,000/- were to be dropped, considering the revenue's stand before the Apex Court. The concerned officer was directed to conduct this exercise expeditiously, preferably within two months, and communicate the decision to the assessee as per the faceless regime and Section 144-B. The court rejected the contentions raised before it, noting that recent Supreme Court judgments in *Vikram Kapahi*, *Ashish Acharatlal Varaiya*, and *Pradeep Himatlal Shah* also disposed of SLPs in terms of the *Rajeev Bansal* judgment. The court also noted that in cases where assessees had appealed against final assessment orders, those appeals would stand decided in view of the findings in the *Rajesh Sharma* judgment.
The Tribunal held that the notice dated 15th March 2023 issued under Section 148 and the assessment order dated 20th March 2024 passed under Section 147, along with consequential proceedings, are 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 Gujarat High Court's reasoning, which relied on Explanation 2 to Section 148 (as it existed at the relevant time) and the understanding that pre-requisites for issuing a Section 148 notice in search cases cannot be met by a Faceless Assessing Officer (FAO), was not agreed with by the Rajasthan High Court. The Court noted that the Gujarat High Court was not made aware of the Bombay High Court's reasoning in Abhin Anilkumar Shah vs. Income Tax Officer, which dealt with CBDT orders creating exceptions for assessment proceedings in Central Charges and International Tax Charges, and held that such orders did not alter the applicability of the faceless scheme as notified on 29th March 2022. The Rajasthan High Court followed its own precedents and the Bombay High Court's decision in Hexaware Technologies Ltd. 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 undertook to withdraw a previously filed appeal.
The Tribunal held that the mandate of Section 151A of the Income Tax Act, 1961, must be strictly followed. Notices issued by the JAO under Section 148 of the Act, for assessment and reassessment under Sections 147, 148, and 148A, in light of the sanction under Section 151A, must adhere to the algorithm-based random assessing system. The JAO does not have the jurisdiction to issue such notices as it weakens Section 151A and may lead to its diminishing activation. The Court found that instructions and circulars cannot override statutory provisions or make them obsolete. The impugned notices, issued by the JAO without conducting faceless assessment as envisaged under Section 144B, were found to be contrary to the provisions of the Act. Consequently, the notice dated 24.06.2025 issued by the JAO for AY 2021-22 and all consequential orders were quashed and set aside for want of jurisdiction. The respondents were granted 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 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 quashed and set aside the notice dated March 30, 2025, issued under Section 148 of the Income Tax Act, 1961. 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 Gujarat High Court's reasoning, which relied on Explanation 2 to Section 148 and the understanding that pre-requisites for issuing a Section 148 notice in search cases cannot be met by the FAO, was not agreed with by the Rajasthan High Court. 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. The Supreme Court's dismissal of an SLP against a Telangana High Court order based on Venkataramana Reddy Patloola further supported the assessee's position. 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 other grounds raised by the petitioner were not pressed.
The Tribunal quashed and set aside the notice dated March 26, 2025, issued under Section 148 of the Income Tax Act, 1961, for the assessment year 2022-23. 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 of the Gujarat High Court, stating that the judgment 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, but rather on a simple reading of Explanation 2 to Section 148 and an understanding that the pre-requisites for issuing a Section 148 notice in search cases cannot be met by the FAO. The Court noted that the Supreme Court had dismissed an SLP against a Telangana High Court order based on the reasoning in Venkataramana Reddy Patloola, which was similar to the reasoning in Hexaware Technologies Ltd. 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 Rajasthan High Court quashed and set aside the notice dated March 18, 2025, issued under Section 148 of the Income Tax Act, 1961, for the assessment year 2021-22. 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 decision was based on an understanding that the pre-requisites for issuing a Section 148 notice in search cases could not be fulfilled by an algorithm under the faceless regime, and that the Bombay High Court's decision in Hexaware Technologies Ltd. was distinguished as applying to Explanation 1, not Explanation 2, to Section 148. Crucially, the Court observed that the Gujarat High Court was not made aware of the Bombay High Court's reasoning in Abhin Anilkumar Shah, which dealt with CBDT orders creating exceptions for assessment proceedings in Central Charges and International Taxation Charges, and the subsequent dismissal of an SLP by the Supreme Court against a Telangana High Court order in Venkataramana Reddy Patloola. The Court explicitly disagreed with the Gujarat High Court's reasoning. 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 quashed and set aside the notice dated March 18, 2025, issued under Section 148 of the Income Tax Act, 1961, for assessment year 2022-23. The Tribunal found the facts of the Gujarat High Court case in Talati and Talati LLP to be entirely different from the present case. The Tribunal disagreed with the Gujarat High Court's reasoning that the pre-requisite conditions for issuing a Section 148 notice in search cases could not be met by the FAO. The Tribunal noted that the Gujarat High Court was not made aware of the Bombay High Court's reasoning in Abhin Anilkumar Shah, which distinguished the Hexaware Technologies Ltd. judgment and held that CBDT orders creating exceptions for assessment proceedings in Central and International Taxation charges did not apply to the faceless scheme notified on March 29, 2022. Furthermore, the Supreme Court's dismissal of the Revenue's SLP against a Telangana High Court order based on the Abhin Anilkumar Shah reasoning supported the petitioner's stance. The Tribunal 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 other grounds raised by the petitioner were not pressed.
The Tribunal quashed and set aside the notice dated March 14, 2023, issued under Section 148 of the Income Tax Act, 1961, and the assessment order and demand notice dated March 19, 2024, passed under Section 147 of the Act, along with consequential proceedings. 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 noted that 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 Section 148 notice in search cases could not be met by a Faceless Assessing Officer (FAO). The Tribunal disagreed with this reasoning, implicitly favoring the Bombay High Court's approach in Hexaware Technologies Ltd. and Abhin Anilkumar Shah, which considered the applicability of the faceless scheme and relevant CBDT orders. 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 stated that other grounds were not being pressed.
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 out of adhering to it. It was held that a JAO does not have the jurisdiction to issue notices under Section 148 of the Act, as doing so weakens Section 151A and may 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. Therefore, notices issued by JAOs for such purposes are liable to be quashed. The court also noted that instructions and circulars can only supplement statutory provisions and cannot override them. Consequently, the impugned notice dated 01.03.2025 issued by the JAO for Assessment Year 2021-2022, and all consequential orders, were quashed and set aside for want of jurisdiction. The revenue was granted liberty to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, keeping the FAO as the assessing officer. The time spent during litigation was to be excluded for limitation purposes for issuing fresh notices.
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. For assessments and reassessments under Sections 147, 148, and 148A, adherence to the algorithm-based random assessing system, as envisaged by the faceless assessment scheme and Section 144B, is mandatory. Consequently, notices issued by the JAO under Section 148, without conducting faceless assessment as per Section 144B, were found to be contrary to the provisions of the Act. The impugned notice dated 24.06.2025 issued by the JAO for AY 2021-2022 and all consequential orders were quashed and set aside for want of jurisdiction. The revenue was 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 limitation for fresh notices. The court also referred to a prior decision by one of its judges which held that circulars or instructions cannot override statutory provisions and that authorities cannot usurp legal provisions for convenience, causing hardship.
The Tribunal held that notices issued by the JAO under Section 148 of the Income Tax Act, 1961, for assessment and reassessment are invalid and deserve to be quashed. This is because the mandate of Section 151A of the Act, which requires adherence to an algorithm-based random assessing system, has to be strictly followed. The JAO does not have the jurisdiction to issue such notices, as it would weaken Section 151A and potentially lead to its diminishing activation. The Court emphasized that legislative intent, vision, and wisdom, particularly in infusing technology for transparency and impartiality through randomized allocations, must be given full meaning. The Court quashed the impugned notice dated 23.06.2025 issued by the JAO for Assessment Year 2021-2022 and all 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 the mandate of Section 151A of the Income Tax Act, 1961, must be strictly followed. Notices issued under Section 148 of the Act by the JAO are not valid as they undermine Section 151A and lead to diminishing activation of the algorithm-based random assessing system. For assessment and reassessment under Sections 147, 148, and 148A, adherence to the algorithm-based random system is mandatory. Consequently, the impugned notices issued by the JAO are 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 is to be excluded for computing the limitation for issuing fresh notices, if required. The judgment allows the writ petition in terms of the cited judgments, quashing the notice dated 31.03.2025 and consequential orders.
The High Court held that the writ petition challenging the notice has been rendered infructuous. The reasoning provided is that since a final order has been passed for the assessment year 2015-16, the petitioner has the liberty to file an appeal against that final order and raise all available objections. The principle established is that a writ petition challenging a notice becomes infructuous when a final order is passed, and the assessee should pursue the statutory remedy of appeal. The operative direction was to dismiss the writ petition as infructuous. No issue was expressly left undecided.
The High Court held that in view of the final order having been passed by the revenue for the assessment year 2014-15, the writ petition challenging the notice has been rendered infructuous. The petitioner is at liberty to file an appeal against the concerned final order and raise all objections available to the assessee. The Court therefore dismissed the writ petition as infructuous. No specific findings were made on the merits of the original notice or the subsequent final order, as the petition was disposed of on procedural grounds.
The High Court held that the writ petition challenging the notice has been rendered infructuous because a final order has now been passed by the revenue for the assessment year 2013-14. The court advised the petitioner that they are at liberty to file an appeal against the concerned final order and raise all objections available to them. Consequently, the writ petition was dismissed as infructuous. All pending applications were also disposed of.
The High Court agreed with the view taken by the Central Administrative Tribunal and found no grounds for interference. The Tribunal had allowed the Original Application, directing the respondents to remove the pay anomaly and step up the salary of the applicants at par with their respective junior(s) within four months. The Tribunal's decision was based on judicial discipline, following orders from the Karnataka High Court in Union of India & Anr. Vs. Gautam Kumar & Ors. and the CAT, Principal Bench, Delhi in Akhilesh Kumar Rastogi Vs. UOI & Ors., which was upheld by the Delhi High Court. The High Court noted that these decisions had not been further challenged before the Apex Court. The principle established is that seniors are entitled to step up their pay to match their juniors if the anomaly arises due to reasons like juniors earning advance increments on passing departmental examinations later. The directions were made subject to any orders from the Hon'ble Apex Court. The operative direction was to step up the salary of the applicants at par with their junior(s).
The High Court allowed the writ petition, quashing and setting aside the notice dated 23.06.2025 issued by the Jurisdictional Assessing Officer (JAO) and all consequential orders. The Court relied on its previous decision in D.B. Civil Writ Petition No.11787/2024 (Sharda Devi Chhajer & Anr. Vs The Income Tax Officer & Anr.) and an order by one of its judges in CWP No.21509/2023 (Jasjit Singh vs. Union of India & Ors.). The reasoning was that the mandate of Section 151A of the Act, requiring adherence to an algorithm-based random assessing system for assessment and reassessment under Sections 147, 148, and 148A, must be strictly followed. Issuance of notices by the JAO without following this procedure renders them invalid and contrary to the provisions of the Act and the legislative intent of a faceless regime. The Court held that the JAO does not have the jurisdiction to issue notices under Section 148, as it weakens Section 151A. The revenue was granted liberty to issue fresh notices in compliance with the CBDT Notification dated 29.03.2022, keeping the FAO as the assessing officer. The time spent during the litigation was excluded for computing the limitation for fresh notices.
The High Court allowed the writ petition, quashing and setting aside the notice dated 15.04.2024 issued by the Jurisdictional Assessing Officer (JAO) for Assessment Year 2020-21, and all consequential orders. The Court held that the mandate of Section 151A of the Income Tax Act, 1961, must be strictly followed, and the JAO does not have the jurisdiction to issue notices under Section 148 of the Act. Adherence to the algorithm-based random assessing system is required for assessment and reassessment under Sections 147, 148, and 148A, in light of the sanction under Section 151A. The Court reiterated its previous finding that circulars or instructions cannot override statutory provisions or render them obsolete. Notices issued by the JAO under Section 148 without conducting faceless assessment as envisaged under Section 144B were found to be 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 Facilitation Centre 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.