Rajasthan High Court - Jodhpur
Mahaveer Lunia vs Deputy Commissioner Of Income-Tax ... on 25 November, 2025
Author: Pushpendra Singh Bhati
Bench: Pushpendra Singh Bhati
[2025:RJ-JD:50995-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Writ Petition No. 23118/2025
Mahaveer Lunia S/o Shri Jawrilal Lunia, Aged About 54 Years,
Lalit Kunj, Opposite Mapple Abhay Hotel, Paota, Jodhpur -
342001
----Petitioner
Versus
1. Deputy Commissioner Of Income-Tax, Central Circle -1,
Aayakar Bhawan, Paota C Road, Jodhpur.
2. The Commissioner Of Income-Tax (Appeals), Jaipur
Aaykar Bhawan, Lic Building - 2, Bhawani Singh Road,
Ambedkar Circle, Jaipur.
3. The Tax Recovery Officer, Central Circle Tro (Cent), Lic
Building - 2, Bhawani Singh Road, Ambedkar Circle,
Jaipur.
4. The Principal Commissioner Of Income-Tax (Central),
Jaipur Aaykar Bhawan, Lic Building - 2, Bhawani Singh
Road, Ambedkar Circle, Jaipur.
----Respondents
For Petitioner(s) : Mr. Amit Sharma for
Mr. Anjay Kothari
For Respondent(s) : Mr. Sunil Bhandari
Mr. G.S. Chouhan
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
HON'BLE MR. JUSTICE SANJEET PUROHIT
Order
25/11/2025
1. Learned counsel for the petitioner submits that petitioner is
unhappy with notice dated 24th March 2024 issued under Section
148 and assessment order dated 29th March, 2025 passed under
Section 147 of the Income Tax Act, 1961 (for short 'the Act').
2. Learned counsel further submits that apart from various
grounds taken in the petition, one of the grounds is that notice
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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 (D.B. Civil Writ Petition No.10540/2024, dated
05.08.2025, at Jaipur Bench) and Sharda Devi Chhajer vs. The
Income Tax Officer & Anr., reported in 2025 SCCOnLine Raj3386,
following judgment of Bombay High Court in Hexaware
Technologies Ltd. vs. Assistant Commissioner of Income-Tax,
Circle 15(1)(2), reported in (2024) 162 tazmann.com 225
(Bombay), 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, learned counsel for the respondent 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. This Court finds 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 eassessment
scheme) does not cover a case where notice under Section 148 is
issued by the JAO, the information received by him in the matter
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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 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. reported
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in (2024) 468 ITR 350 (Bom) 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
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.
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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. reported in (2024) 468 ITR 181. 11. 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.
12. In these circumstances, notice dated 24th March 2024 issued
under Section 148 and assessment order dated 29 th March, 2025
passed under Section 147 of the Act along with consequential
proceedings are 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 24 th March 2024 issued under
Section 148 and assessment order dated 29th March, 2025 passed
under Section 147 of the Act along with consequential
proceedings, with liberty as prayed.
16. In view of above, learned counsel for the petitioner
undertakes to apply within two weeks to withdraw the appeal
already filed.
17. Undertaking accepted.
18. Petition disposed.
19. Consequently, all pending applications, if any, also stand
disposed.
(SANJEET PUROHIT),J (DR.PUSHPENDRA SINGH BHATI),J
198-JatinS/Yagya/-
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