Case Law Details
Bhagwati Ferro Metal Pvt. Ltd. Vs ACIT (Bombay High Court)
The Bombay High Court heard a writ petition challenging a notice issued under Section 148 of the Income Tax Act, 1961, which had earlier been stayed by interim relief. The petitioner argued that the notice was invalid as it had been issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer, as mandated by law, rendering it a fatal defect requiring quashing. The petitioner relied on a prior Division Bench decision which had addressed the same issue.
The Revenue acknowledged that the issue was covered by the earlier decision but submitted that the ruling had been challenged before the Supreme Court and may be reconsidered. It was also clarified that no stay had been granted on that decision.
The High Court noted that since the issue was squarely covered by the binding precedent and there was no stay on that ruling, it was obligated to follow it. Accordingly, the Court set aside the impugned notice issued under Section 148 along with all consequential proceedings.
At the same time, the Court granted liberty to the Revenue to revive the writ petition if the earlier decision is overturned by the Supreme Court. It clarified that revival could be sought by filing a praecipe without the need for a separate application, and that upon revival, the case would be decided on its own merits, including other grounds raised in the petition.
The writ petition was disposed of with no order as to costs.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. In the above Petition Rule was issued on 30th September 2024 and interim relief was also granted interalia staying the Notice issued under Section 148 of the Income Tax Act, 1961. Today, though the matter has come up under the caption “for directions”, we have, with the consent of parties, heard it finally.
2. The above Writ Petition interalia challenges the Notice issued under Section 148 of the Income Tax Act, 1961 on various grounds. One of the grounds is that the Notice has been issued by the Jurisdictional Assessing Officer when the law mandates that it has to be issued by the Faceless Assessing Officer. This is a fatal defect and therefore the Notice has to be quashed, is the argument of the Petitioner.
3. It is the Petitioners’ contention that this issue is squarely covered by a decision of a Division Bench of this Court in the case of Hexaware Technologies Ltd. V/S Assistant Commissioner of Income-tax, Circle 15(1)(2) [(2024) 162 com 225 (Bombay)].
4. On the other hand, the learned advocate appearing on behalf of the Revenue stated that though it is true that this issue is concluded by the decision in Hexaware Technologies Ltd (supra), the said decision has been challenged before the Hon’ble Supreme Court, and the Hon’ble Supreme Court is likely to take up the matter immediately on re-opening. He has fairly stated that there is no stay to the judgment in Hexaware Technologies Ltd (supra).
5. Considering these facts, we do not propose to keep the matter pending in this Court. Once it is fully covered by the decision in Hexaware Technologies Ltd (supra) we are bound to follow it.
6. We accordingly set aside the impugned Notice issued under Section 148 and all other proceedings/orders emanating therefrom.
7. We however grant liberty to the Revenue to revive the above Writ Petition in the event the decision in Hexaware Technologies Ltd (supra) is set aside by the Hon’ble Supreme Court on this issue. We make it clear that it will not be necessary for the Revenue to file a separate Interim Application to seek a revival of this Petition and the same can be done simply by moving a Praecipe before this Court.
8. We also make it clear that once the Petition is revived and restored, the same would have to be decided on its own merits considering that several other issues are also raised challenging the Notice issued under Section 148.
9. Rule is accordingly made absolute and the Writ Petition is also disposed of in terms thereof. However, there shall be no order as to costs.
10. This order will be digitally signed by the Private Secretary/ Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.
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