AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1501
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng the assessment year 2016-17, a notice u/s. 148 of the Act was issued on 27.03.2023 by the AO, Non Corp Ward-10(6), Chennai, after obtaining the prior approval of the competent authority. In response, the assessee did not file his return of income against notice u/s. 148 of the Act. Further, the AO was issued notice u/s. 133(6) and obtained copy of purchase deed from M/s.Mall Constructions Pvt Ltd. Since, the assessee did not participate in assessment proceedings, on perusal of the reply received from M/s.Mall Constructions Pvt Ltd, the assessment was completed exparte by the Income Tax Officer, Non-Corp Ward-10(6), Chennai dated 25.03.2024 u/s. 147 r.w.s 144 of the Act by making an addition of Rs. 3,96,347/- as unexplained investment u/s. 69 of the Act. Aggrieved by the order of the AO, the assessee filed appeal before the ld.CIT(A) and the ld.CIT(A) has dismissed the appeal by confirming the order of the AO dated 25.03.2024. 3. Aggrieved by the order of the ld.CIT(A), the assessee is in present appeal before us. 4. The Ld.AR for the assessee referred to the notice u/s. 148 of the Act and order under Clause (d) of section 148A of the Act, both dated 27.03.2023 and pointed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(d) dated 27.03.2023 have been issued by the Income Tax Officer, Non-Corp.Ward-10(6), Chennai [JAO] and not by the NFAC which is not in accordance with the aforesaid Scheme. We find that though the order under Clause(d) to Section 148A of the Act dated 27.03.2023 has been passed, the notice u/s. 148 of the Act was issued on 27.03.2023 after the CBDT Notification dated 29.03.2022. Hence, the aforesaid CBDT Notification dated 29.03.2022 is directly applicable in this case. 7. The Hon'ble Telangana High Court in Kankanala Ravindra Reddy Vs. ITO (2023) 156 taxmann.com 178 (Telangana) and Hon'ble Bombay High Court in Hexaware Technologies Ltd Vs ACIT (2024) 464 ITR 430 (Bom) has decided the controversy in favour of the assessee. 8. Furthermore, the above view is affirmed by the Hon'ble Telangana High Court in M/s.Ta Infra Projects Limited Vs The DCIT [Writ Petition Nos.26645, 26654, 26667, 28497, 26788 of 2024 and 12437, 9561, 14549, 14664, 14674, 12873 of 2025 dated 14.07.2025], following the judgments of the Hon'ble Telangana High Court in Kankanala Ravindra Reddy Vs ITO (2023) 156 taxmann.com 178 (Telangana) and Hon'ble Bombay High Court in Hexaware Technologies Ltd Vs ACIT (20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on is, accordingly, dismissed. 4. Pending applications, if any, shall also stand disposed of." 12. We further note that the revenue's SLP(C) No.021188/ 2024 in the case of Hexaware Technologies Ltd against the judgment of the Hon'ble Bombay High Court in Hexaware Technologies Ltd Vs ACIT (2024) 464 ITR 430 (Bom) is still pending adjudication before the Hon'ble Supreme Court. 13. The Supreme Court in a landmark judgement in the case of Kunhayammed v. State of Kerala [2000] 113 Taxman 470/245 ITR 360 (SC) has summarised the doctrine of merger as follows:- "Where an appeal or revision is provided before a superior forum against an order passed by a Court, Tribunal or any other authority and such superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the subordinate forum merges with the decision by the superior forum and it is the latter which subsists, remains operative and is capable of enforcement in the eye of law" 14. The Supreme Court in the aforesaid case has concluded as follows:- (i) Where an appeal or revision is provided against an order passed by a court, tribunal or any other authority before superior f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ourt of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting the special leave petition or that the order of the Supreme Court is the only order binding as res judicata in subsequent proceedings between the parties. (vi) Once leave to appeal has been granted and appellate jurisdiction of Supreme Court has been invoked the order passed in appeal would attract the doctrine of merger; the order may be of reversal, modification or merely affirmation. 15. In the case of S.Shanmugavel Nadar v. State of Tamil Nadu [2003] 263 ITR 658 (SC), the Apex Court held that what merges is the operative part i.e. the mandate decree issued by the court which may have been expressed in positive or negative form. The application of the doctrine depends on the nature of the appellate or revisional order, the scope of the statutory provisions conferring jurisdiction and the subject matter of challenge with the following remarks:- "...........Though loosely an expression "merger of judgement, order or decision of a Court or forum into the judgement, order or decision of a s....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to be placed before the Chief Justice for constituting a Division Bench to consider the divergent views. It is, therefore, all these matters were listed before us today. 4. We follow the law as laid down in Hexaware Technologies Ltd (supra), the said judgment was authored by one of us (Chief Justice), that it is mandatory for the FAO to issue the concerned notices and issuance thereof by the JAO would make the notice invalid. 5. Counsels for assessee's are ad idem that the law as laid down in Hexaware Technologies Ltd (supra) will apply. Learned Additional Solicitor-General, however, submits that the Revenue does not accept the law as laid down in Hexaware Technologies Ltd (supra); and that there is a special leave petition filed against the order and judgment in Hexaware Technologies Ltd (supra) and the same is expected to be taken up after the Supreme Court reopens. 6. Admittedly, learned Additional Solicitor-General, in fairness, states that there is no stay. Therefore, the law as laid down by Hexaware Technologies Ltd (supra) applies. 7. It is clarified that if the Apex Court reverses the judgment of Hexaware Technologies Ltd (supra), partie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....our of Revenue, was reversed by the Hon'ble Division Bench by order dated 24.06.2025 by holding as under: This appeal impugns an order passed by the learned Single Judge. 2. The learned Single Judge was pleased to dismiss the petition on the ground that even if the notice has been issued by Jurisdictional Assessment Officer and not Faceless Assessment Officer, the notice issued under Section 148A/148 of the Income Tax Act will be valid. 3. Ms.Vardhini Karthik submitted that this Court has, in many matters, held, following the judgment of the Bombay High Court in Hexaware Technologies Limited v. Assistant Commissioner of Income Tax', that notice that has to be issued by Faceless Assessment Officer has to be issued Faceless Assessment Office and if issued by Jurisdictional Assessment Officer, the same is not valid. 4. Ms.Premalatha, who takes notice for the Revenue, states that the law as proposed by Ms.Vardini Karthick is correct and therefore, the Court may quash and set aside the notices, but keep open liberty of the Revenue to re-ignite the notices in case the Apex Court interferes with the order and judgment of the Bombay High Court in Hex....