Rajasthan High Court - Jodhpur
Gaze Fashion Trade Limited (2016-17) vs Assistant Commissioner Of Income Tax ... on 18 September, 2025
[2025:RJ-JD:41761-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Writ Petition No. 6485/2025
Gaze Fashion Trade Limited (2016-17), Having its Registered
Office at Village Bedla Udaipur City Udaipur Girwa Rajasthan
India, 313001 through its Authorized Representative Mr. Sumeet
Agarwal Son of Shyam Sunder Agarwal having residence at
Bunglow No. 4 Anand Vihar Colony M M Choubey Ward Katni-
483201 M.P.
----Petitioner
Versus
Assistant Commissioner of Income Tax, Central Circle 1 Aaykar
Bhawan Subcity Centre Savina Udaipur Rajasthan, 313001
----Respondent
For Petitioner(s) : Mr. Sanjay Nahar
For Respondent(s) : Mr. K.K. Bissa
HON'BLE THE CHIEF JUSTICE MR. K.R. SHRIRAM
HON'BLE MRS. JUSTICE SANGEETA SHARMA
Order
18/09/2025
1. Mr. Nahar submits that petitioner is unhappy with notice
dated 24th March 2024 issued under Section 148 of the Income
Tax Act, 1961 (for short 'the Act').
2. Mr. Nahar 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
Accessing Officer (FAO). He also submits that this Court in Shree
Cement Limited vs. Assistant Commissioner of Income-Tax
& Others1 and Sharda Devi Chhajer vs. The Income Tax
Officer & Another2 following judgment of Bombay High Court in
1 DB Civil Writ Petition No.10540/2024, dated 05.08.2025 at Jaipur Bench (unreported)
2 2025 SCCOnLine Raj3386
(Uploaded on 19/09/2025 at 04:59:27 PM)
[2025:RJ-JD:41761-DB] (2 of 6) [CW-6485/2025]
Hexaware Technologies Ltd. vs. Assistant Commissioner of
Income-Tax, Circle 15(1)(2)3 has held that such a notice
issued by JAO will be invalid.
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),
Ahmedabad4 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
3 [2024] 162 taxmann.com 225 (Bombay)
4 R/Special Civil Application Nos.13198 of 2024 and 13225 of 2024, dated 01.10.2024 (unreported)
(Uploaded on 19/09/2025 at 04:59:27 PM)
[2025:RJ-JD:41761-DB] (3 of 6) [CW-6485/2025]
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. 5
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
5 [2024]468ITR350(Bom)
(Uploaded on 19/09/2025 at 04:59:27 PM)
[2025:RJ-JD:41761-DB] (4 of 6) [CW-6485/2025]
proceedings. What has been done by order dated 06 th September
2021 is to modify the order dated 31 st 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 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 31 st 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.6.
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 16 th
6 [2024]468ITR181
(Uploaded on 19/09/2025 at 04:59:27 PM)
[2025:RJ-JD:41761-DB] (5 of 6) [CW-6485/2025]
July 2025 in SLP (Civil) Diary No. 33956/2025 stating the
following-
1. "Delay condoned.
2. Exemption Application is allowed.
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 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.
13. In these circumstances, impugned notice dated 24 th March
2024 issued under Section 148 of the Act is 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 19/09/2025 at 04:59:27 PM)
[2025:RJ-JD:41761-DB] (6 of 6) [CW-6485/2025]
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 24 th March 2024 issued under
Section 148 of the Act with liberty as prayed.
17. Petition disposed.
18. Consequently, all pending applications, if any, also stand
disposed.
19. In case, if any re-assessment order is passed, the same will
also stand quashed and set aside.
(SANGEETA SHARMA),J (K.R. SHRIRAM),CJ
35-Amit/-
(Uploaded on 19/09/2025 at 04:59:27 PM)
Powered by TCPDF (www.tcpdf.org)
