[2025:RJ-JD:48505-DB]

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 22127/2025 Rahul Bagrecha S/o Loon Chand Bagrech, Aged About 30 Years, R/o Bhaiyon Ki Pole, Ghantaghar, Jodhpur.

----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. K.K. Bissa HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI HON'BLE MR. JUSTICE ANUROOP SINGHI

Order

12/11/2025

1. Mr. Harsh Vardhan Singh, learned counsel for the petitioner submits that petitioner is unhappy with notice dated 24^th March 2024 issued under Section 148 of the Income Tax Act, 1961 and assessment order dated 17^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 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.

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 ord