Talati And Talati LLP Vs Office of Assistant Commissioner of Income Tax (Gujarat High Court)
Gujarat High Court addressed the validity of show-cause notices issued under Section 148 of the Income Tax Act, 1961, in two petitions, Talati And Talati LLP Vs Office of Assistant Commissioner of Income Tax. The core issue was whether a Jurisdictional Assessing Officer (JAO) could issue such notices following a search and seizure under Section 132, or if the process must be exclusively through automated, faceless allocation as per Section 151A and related schemes. The petitioner challenged the notice, arguing it violated the faceless assessment provisions introduced by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, and the subsequent “E-Assessment of Income Escaping Assessment” scheme of 2022.
The petitioners contended that the 2022 scheme mandated automated allocation for Section 148 notices, leaving no room for JAO intervention. They pointed to the Bombay High Court’s decision in Hexaware Technologies v. Assistant Commissioner of Income Tax, which emphasized strict adherence to the scheme. The petitioners argued that the JAO’s issuance of the notice in physical mode, without automated allocation, rendered it invalid. They also claimed the revenue failed to provide necessary reasons, satisfaction notes, or approvals required under Section 151 of the Act.
