Rajasthan High Court - Jodhpur
Jugal Kishore Jhanwar vs Deputy Commissioner Of Income Tax ... on 4 November, 2025
Author: Pushpendra Singh Bhati
Bench: Pushpendra Singh Bhati
[2025:RJ-JD:47473-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Writ Petition No. 21519/2025
Jugal Kishore Jhanwar S/o Madan Lal Jhanwar, Aged About 69
Years, Resident Of 96, Nehru Park, Jodhpur 342003.
----Petitioner
Versus
Deputy Commissioner Of Income Tax, Central Circle - 1, Jodhpur
Having Its Address Aayakar Bhawan, Paota C Road, Jodhpur-
342010.
----Respondent
For Petitioner(s) : Mr. Harsh Vardhan Singh
For Respondent(s) : Mr. KK Bissa
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
HON'BLE MR. JUSTICE ANUROOP SINGHI
Order
04/11/2025
1. Mr. Harsh Vardhan Singh, learned counsel for the petitioner
submits that petitioner is unhappy with notice dated 24th March
2024 issued under Section 148 and assessment order dated 28 th
March 2025 passed under Section 147 of the Income Tax Act,
1961 (for short 'the Act').
2. Mr. Singh further submits that apart from various grounds taken
in the petition, one of the grounds is that notice has been issued
by Jurisdictional Assessing Officer (JAO) and not Faceless
Assessing Officer (FAO). He also submits that this Court in Shree
Cement Limited vs. Assistant Commissioner of Income-Tax
& Others and Sharda Devi Chhajer vs. The Income Tax
Officer & Another following judgment of Bombay High Court in
Hexaware Technologies Ltd. vs. Assistant Commissioner of
(Uploaded on 07/11/2025 at 04:21:37 PM)
[2025:RJ-JD:47473-DB] (2 of 6) [CW-21519/2025]
Income-Tax, Circle 15(1)(2) has held that such a notice issued
by JAO will be invalid. Therefore any assessment order passed on
an invalid notice will also be bad in law.
3. Mr. Bissa submits that there is a Gujarat High Court judgment
in the case of Talati and Talati LLP vs. Office of Assistant
Commissioner of Income Tax, Circle 4(1)(1), Ahmedabad
wherein Court considered validity of show cause notice issued
under Section 148 of the Act and the proceedings initiated under
Section 153A of the Act. He further submits that Gujarat High
Court did not interfere with notice but directed assessee to file
reply to notice.
4. We find that facts of the Gujarat High Court case in Talati and
Talati LLP (supra) are entirely different from the facts of present
case.
In Talati and Talati LLP (supra), Gujarat High Court has
held that notification dated 29th March 2022 (prescribing e-
assessment scheme) does not cover a case where notice under
Section 148 is issued by the JAO, the information received by him
in the matter of search and seizure under Section 132 of the Act,
1961, or requisitioned under Section 132A.
5. The Gujarat High Court has relied on Explanation 2 to Section
148 (as it existed at the relevant time) to approve the contention
of the Revenue that the concept of automated allocation, i.e.
application of algorithm for randomized allocation of cases by
using suitable technological tools including Artificial Intelligence
and Machine Learning, as defined in Clause 2(1)(b) of the Scheme
dated 29th March 2022, cannot be applied in a case of search and
seizure under Section 132.
(Uploaded on 07/11/2025 at 04:21:37 PM)
[2025:RJ-JD:47473-DB] (3 of 6) [CW-21519/2025]
6. While upholding the said contention the Gujarat High Court was
perhaps under an understanding that the FAO does not draw a
satisfaction note before proceeding to issue a notice under Section
148 in search cases. The Gujarat High Court has taken cognizance
of the contention that pre-requisite conditions before issuance of
notice under Section 148, as provided in Explanation 2 of Section
148 would require human application of mind and cannot be
fulfilled by algorithm under the Faceless Regime.
7. The decision of the Division Bench of the Bombay High Court in
the case of Hexaware Technologies Ltd. (supra) has been
distinguished as having been rendered in a case, which falls within
the arena of Explanation 1 to Section 148 and not where
Explanation 2 to Section 148 of the Income Tax Act' 1961, would
be attracted.
8. It is pertinent to note that the Gujarat High Court was not made
aware of the reasoning adopted by Bombay High Court in the case
of Abhin Anilkumar Shah vs. Income Tax Officer,
International Tax Ward Circle-4(2)(1), Mumbai and Ors.
where the orders dated 31st March 2021 and 06th September
2021 issued by the CBDT creating exception for the assessment
proceedings undertaken by the International taxation
charges/Central Charges were subject matter of deliberation.
9. In Abhin Anilkumar Shah (supra) the Court held that said
orders dated 31st March 2021 and 06th September 2021 issued
by the CBDT only carve out exception in relation to the
assessment proceedings. What has been done by order dated 06th
September 2021 is to modify the order dated 31st March 2021 to
the extent of what is set out in paragraph 3 thereof, namely, that
(Uploaded on 07/11/2025 at 04:21:37 PM)
[2025:RJ-JD:47473-DB] (4 of 6) [CW-21519/2025]
in addition to such exceptions to the applicability of the faceless
mechanism to assessment orders in relation to Central Charges
and International Tax Charges, an additional exception was added,
namely, to the assessment order in cases where pendency could
not be created on ITBA because of technical reasons or cases not
having a PAN, as the case may be. Thus, the scheme as framed
under section 151A and notified under the notification dated 29th
March 2022 does not include the applicability, inclusion or even
reference to the orders dated 31st March 2021 and 06th
September 2021. It was further held that it would be doing
violence to the language of the notification/scheme dated 29th
March 2022 to read into such notification what has not been
expressly provided for and/or something which is kept outside the
purview of the said notification, namely, the orders dated 31st
March 2021 and 06th September 2021. It would be uncalled for to
read into the scheme dated 29th March 2022, something which is
not included.
10. The Bombay High Court also relied upon the order passed by
the Telangana High Court in the case of Venkataramana Reddy
Patloola Vs. Deputy Commissioner of Income Tax, Circle
1(1) and Ors.
11. The Revenue filed an SLP against another order passed by
Telangana High Court based on the aforesaid Order in
Venkataramana Reddy Patloola (supra). The said SLP came to
be dismissed by the Hon'ble Supreme Court vide order dated 16th
July 2025 in SLP (Civil) Diary No. 33956/2025 stating the
following-
1. "Delay condoned.
2. Exemption Application is allowed.
(Uploaded on 07/11/2025 at 04:21:37 PM)
[2025:RJ-JD:47473-DB] (5 of 6) [CW-21519/2025]
3. Having heard the learned counsel appearing for the
petitioners - Revenue and having gone through the
materials on record, we find no good reason to
interfere with the impugned order passed by the High
Court.
3. The Special Leave Petition is, accordingly,
dismissed.
4. Pending applications, if any, shall also stand
disposed of."
12. Thus the judgment passed by the Gujarat High Court is not
based on the reading of notification dated 29th March 2022 along
with orders dated 31st March 2021/ 06th September 2021 but is
based on the simple reading of Explanation 2 to Section 148 along
with understanding that the pre-requisites for issuing notice under
Section 148 in search cases cannot be met by the FAO. With due
respect, we do not agree.
13. In these circumstances, notice dated 24th March 2024 issued
under Section 148 of the Act and assessment order dated 28th
March 2025 passed under Section 147 of the Act are liable to be
quashed and set aside.
14. At this stage, Mr. Bissa submits that in judgment of
Hexaware Technologies Ltd. (supra), Revenue has preferred a
Special Leave Petition and notice has been issued. Counsel states
that in view of the law as it stands today, Court may grant the
prayer of petitioner but in case the Apex Court interferes with
judgment in Hexaware Technologies Ltd. (supra), Sharda
Devi Chhajer (supra) or Shree Cement Limited (supra), then
Revenue should be given liberty to revive the notice issued under
Section 148 of the Act.
(Uploaded on 07/11/2025 at 04:21:37 PM)
[2025:RJ-JD:47473-DB] (6 of 6) [CW-21519/2025]
15. In view of above, counsel for petitioner states that other
grounds raised are not being pressed upon and they will be taken
at appropriate stage, if required.
16. Therefore, keeping open all rights and contentions of parties,
we quash and set aside notice dated 24th March 2024 issued
under Section 148 of the Act and assessment order dated 28th
March 2025 passed under Section 147 of the Act with liberty as
prayed.
17. In view of above, Mr. Harsh Vardhan Singh undertakes to
apply within two weeks to withdraw the appeal already filed.
18. Undertaking accepted.
19. Petition disposed.
20. Consequently, all pending applications, if any, also stand
disposed.
(ANUROOP SINGHI),J (DR.PUSHPENDRA SINGH BHATI),J
115-nirmala/-
(Uploaded on 07/11/2025 at 04:21:37 PM)
Powered by TCPDF (www.tcpdf.org)
