The Bombay High Court reaffirmed that, where statutory law mandates the issuance of reassessment notices by a Faceless Assessing Officer, any notice issued by a Jurisdictional Assessing Officer is invalid. This approach strictly follows the precedent in Hexaware Technologies Ltd. The authority is binding within the jurisdiction unless overruled by the Supreme Court, with provision for revival if the precedent is reversed.
Summary
| Category | Data |
|---|---|
| Case Name | WP/6497/2025 of ZAVRON FINANCE PRIVATE LIMITED, NAGPUR, THR. DIRECTOR, MR. BHARAT VASWANI Vs INCOME TAX OFFICER WARD 1 (4), NAGPUR AND OTHERS |
| CNR | HCBM040328842025 |
| Date of Registration | 16-10-2025 |
| Decision Date | 17-10-2025 |
| Disposal Nature | DISPOSED OFF |
| Judgment Author | HON’BLE SHRI JUSTICE ANIL L. PANSARE, HON’BLE SHRI JUSTICE YANSHIVRAJ GOPICHAND KHOBRAGADE |
| Court | Bombay High Court |
| Bench | Division Bench: ANIL L. PANSARE, Y. G. KHOBRAGADE |
| Precedent Value | Binding within Bombay High Court’s jurisdiction (subject to Supreme Court outcome) |
| Overrules / Affirms | Follows and affirms Hexaware Technologies Ltd. [(2024) 162 taxmann.com 225 (Bombay)] |
| Type of Law | Taxation / Income Tax Act, 1961 |
| Questions of Law | Whether a notice under Section 148 issued by the Jurisdictional Assessing Officer is valid when the statute prescribes issuance by a Faceless Assessing Officer |
| Ratio Decidendi |
The Court held that where the statutory scheme requires reassessment notices under Section 148 to be issued by a Faceless Assessing Officer, the issuance of such a notice by a Jurisdictional Assessing Officer constitutes a fundamental defect. Relying on the binding precedent in Hexaware Technologies Ltd., the Court concluded that such notices are invalid and liable to be quashed. The Court explicitly clarified that this holding is binding unless Hexaware is overturned by the Supreme Court. The respondents (Revenue) retain liberty for revival should the underlying precedent be reversed. Any future revived proceedings will remain stayed until further order. Multiple other grounds challenging the notice remain open for adjudication upon revival. |
| Judgments Relied Upon | Hexaware Technologies Ltd. vs. Assistant Commissioner of Income-tax, Circle 15(1)(2) [(2024) 162 taxmann.com 225 (Bombay)] |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Precedent established by Hexaware Technologies Ltd. on the statutory requirements for faceless regime under the Income Tax Act, 1961 |
| Facts as Summarised by the Court |
Petitioner challenged notice under Section 148 of the Income Tax Act on the ground that it was issued by the Jurisdictional Assessing Officer when the law requires such notice to be issued by a Faceless Assessing Officer. Both parties agreed that the issue is directly covered by the Hexaware judgment. The Revenue submitted that the precedent is under challenge before the Supreme Court, but no stay exists. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts and tax authorities within the Bombay High Court’s jurisdiction |
| Persuasive For | Other High Courts; may be cited by practitioners in similar matters nationally |
| Follows | Hexaware Technologies Ltd. vs. Assistant Commissioner of Income-tax, Circle 15(1)(2) [(2024) 162 taxmann.com 225 (Bombay)] |
What’s New / What Lawyers Should Note
- The judgment solidifies the position that, under current law, reassessment notices under Section 148 must be issued only by a Faceless Assessing Officer if the statute so prescribes.
- Notices issued by the Jurisdictional Assessing Officer in such a context are fundamentally defective and liable to be quashed.
- Revival mechanism specified: Revenue may seek revival—without a separate application—if Supreme Court overturns the precedent in Hexaware Technologies Ltd.; until then, proceedings remain stayed.
- Lawyers should promptly raise the jurisdictional objection if Section 148 notice is not issued by the correct statutory authority per the faceless regime.
- If the Supreme Court upholds Hexaware, revival of proceedings is barred; if reversed, challenge on other factual or legal grounds remains open.
Summary of Legal Reasoning
- The Petitioner challenged the notice under Section 148 for being issued by the Jurisdictional Assessing Officer rather than a Faceless Assessing Officer as required by law.
- The Court noted that the issue was squarely covered by its prior decision in Hexaware Technologies Ltd., which held such notices invalid.
- Revenue acknowledged the relevance of Hexaware but noted that it is under challenge before the Supreme Court—however, as no stay was granted, the binding nature of the precedent remained.
- The Court declined to keep the matter pending merely due to the Supreme Court challenge and proceeded to dispose it in alignment with the binding precedent.
- The notice and subsequent proceedings were set aside, with explicit liberty provided for revival (on simple pursis) if Hexaware is subsequently overruled.
- The Court clarified that, upon revival, all grounds raised would be considered on merits, and the impugned notice would remain stayed until further orders.
- No costs were imposed.
Arguments by the Parties
Petitioner
- The Section 148 notice was issued by the Jurisdictional Assessing Officer rather than the Faceless Assessing Officer mandated by statute.
- The legal issue is directly covered by the Bombay High Court’s decision in Hexaware Technologies Ltd., which renders such notices invalid.
- The impugned notice is, therefore, fundamentally defective and liable to be quashed.
Respondent (Revenue)
- Acknowledged the relevance and applicability of Hexaware Technologies Ltd. to the present case.
- Submitted that the precedent is under challenge before the Supreme Court, though no stay on its operation has been granted.
- Requested the Court to take note of the pending Supreme Court challenge.
Factual Background
The petitioner, a company based in Nagpur, challenged the validity of a notice issued to it under Section 148 of the Income Tax Act, 1961. The main contention was that, under the faceless assessment regime now mandated by law, such notices must be issued by a Faceless Assessing Officer. In the instant matter, the Jurisdictional Assessing Officer had issued the impugned notice. Both parties agreed that the point in issue was already decided by the Bombay High Court in Hexaware Technologies Ltd., with the respondents noting that the decision is under appeal to the Supreme Court but without any stay in operation.
Statutory Analysis
- The Court considered the statutory provisions pertaining to Section 148 of the Income Tax Act, 1961, specifically in the context of amendments requiring reassessment notices to be issued under a faceless regime.
- The interpretation affirms that where the statutory scheme mandates the authority of a Faceless Assessing Officer, jurisdictional officers cannot issue valid notices under Section 148.
- The Court followed the reading and construction as applied in Hexaware Technologies Ltd., strictly enforcing the legislative framework for faceless assessments.
Procedural Innovations
- The judgment allows for a streamlined process of revival for the Revenue: should the Supreme Court overturn the Hexaware decision, the Revenue may file a simple pursis (informal note) rather than a full application to reopen the disposed petition.
- Upon such revival, the previously impugned notice remains stayed until further orders—a procedural innovation safeguarding the petitioner pending adjudication on merits.
Alert Indicators
- ✔ Precedent Followed – When existing law is affirmed.