Rajasthan High Court - Jodhpur
Vijay Parakh vs The Deputy Commissioner Of Income Tax ... on 18 November, 2025
Author: Pushpendra Singh Bhati
Bench: Pushpendra Singh Bhati
[2025:RJ-JD:49830-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Writ Petition No. 22659/2025
Vijay Parakh S/o Shri Pannalal Parakh, Aged About 42 Years,
Resident Of Jain Bhawan, 1St A Road Sardarpura, Jodhpur,
Rajathan-342003.
----Petitioner
Versus
The Deputy Commissioner Of Income Tax, Central Circle - 1,
Jodhpur Having Its Address At Aayakar Bhawan, Paota C Road,
Jodhpur, Rajasthan.
----Respondent
For Petitioner(s) : Mr. Rajat Arora
Mr. Dinesh Kumar
Mr. Lucky Rajpurohit
For Respondent(s) : Mr. K.K. Bissa with
Mr. G.S. Chouhan
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
HON'BLE MR. JUSTICE ANUROOP SINGHI
Order
18/11/2025
1. Learned counsel for the petitioner submits that petitioner is
unhappy with notice dated 22.03.2025 issued under Section 148 of the
Income Tax Act, 1961 (for short 'the Act').
2. He 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 Income-Tax, Circle 15(1)(2) has held
that such a notice issued by JAO will be invalid.
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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.
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
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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 06 th 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 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 29 th
March 2022 does not include the applicability, inclusion or even
reference to the orders dated 31st March 2021 and 06th September
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2021. It was further held that it would be doing violence to the
language of the notification/scheme dated 29 th 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 29 th 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. Thus the judgment passed by the Gujarat High Court is not based
on the reading of notification dated 29 th 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.
12. In these circumstances, notice dated 22.03.2025 passed under
Section 148 of the Act is liable to be quashed and set aside.
13. 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.
14. 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.
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15. Therefore, keeping open all rights and contentions of parties, we
quash and set aside notice dated 22.03.2025 passed under Section 148
of the Act with liberty as prayed.
16. Petition disposed.
17. Consequently, all pending applications, if any, also stand disposed.
(ANUROOP SINGHI),J (DR. PUSHPENDRA SINGH BHATI),J
96-Sudheer/-
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