Facts of the Case

The petitioner, Inder Dev Gupta, filed a writ petition challenging the reassessment proceedings initiated by the Income Tax Officer, Ward-27(1), by issuance of notice under Section 148 of the Income-tax Act, 1961. The challenge was founded solely on the ground of lack of jurisdiction, contending that after the introduction of the faceless reassessment regime, only the Faceless Assessing Officer could validly initiate reassessment proceedings and that the Jurisdictional Assessing Officer lacked such authority.

The writ petition formed part of a batch of connected matters raising an identical question of law concerning reassessment jurisdiction.

Issues Involved

Whether, after introduction of the faceless reassessment scheme and Section 151A of the Income-tax Act, reassessment proceedings under Section 148 can be validly initiated by the Jurisdictional Assessing Officer, or whether such power vests exclusively in the Faceless Assessing Officer.

Petitioner’s Arguments

The petitioner argued that the issue was no longer res integra in view of multiple High Court decisions, particularly from the Bombay, Telangana and Punjab & Haryana High Courts, holding that only the Faceless Assessing Officer has jurisdiction to issue notices under Section 148. It was contended that dismissal of Special Leave Petitions by the Supreme Court in certain cases amounted to affirmation of those High Court judgments, thereby rendering the contrary view of the Delhi High Court per incuriam.

The petitioner further submitted that Section 151A statutorily mandates faceless reassessment and excludes the jurisdiction of the Jurisdictional Assessing Officer.

Respondent’s Arguments

The Revenue opposed the petition and submitted that the Delhi High Court has consistently taken the view that both the Jurisdictional Assessing Officer and the Faceless Assessing Officer possess concurrent jurisdiction to initiate reassessment proceedings. Reliance was placed on the binding judgment of the Delhi High Court in TKS Builders Pvt. Ltd. vs. Income Tax Officer, which had been repeatedly followed in subsequent cases.

It was further argued that dismissal of SLPs by the Supreme Court without a speaking order does not amount to declaration of law under Article 141 of the Constitution and does not dilute the binding effect of the Delhi High Court’s decisions within its territorial jurisdiction.

Court Order / Findings

The Delhi High Court examined the rival submissions and held that the issue stood conclusively settled by its earlier decision in TKS Builders Pvt. Ltd., wherein it was held that both the Jurisdictional Assessing Officer and the Faceless Assessing Officer have concurrent jurisdiction to initiate reassessment proceedings under Section 148.

The Court rejected the contention that dismissal of SLPs by the Supreme Court against contrary High Court judgments amounted to affirmation of those views or rendered the Delhi High Court’s decisions per incuriam. Relying on settled principles laid down by the Supreme Court in Kunhayammed, Fuljit Kaur, Dhirendra Sundar Das and Khoday Distilleries, the Court held that dismissal of an SLP without a speaking order does not constitute a declaration of law under Article 141.

The Court further noted that the judgment in TKS Builders continues to hold the field in Delhi, as the SLP against it was still pending and had not been stayed. Judicial discipline required adherence to the binding precedent.

Important Clarification

The Court clarified that within the territorial jurisdiction of the Delhi High Court, reassessment proceedings initiated by the Jurisdictional Assessing Officer cannot be invalidated solely on the ground that the Faceless Assessing Officer did not issue the notice. Challenges limited only to jurisdiction are untenable in view of binding precedent, though assessees remain free to raise all other permissible objections in reassessment proceedings.

Final Outcome

The writ petition filed by Inder Dev Gupta was dismissed. The Delhi High Court upheld the validity of reassessment proceedings initiated by the Jurisdictional Assessing Officer under Section 148 and reaffirmed that both the Jurisdictional Assessing Officer and the Faceless Assessing Officer have concurrent jurisdiction to initiate reassessment proceedings under the Income-tax Act. Pending applications were dismissed as infructuous.

Link to download order- https://www.mytaxexpert.co.in/uploads/1769682155_INDERDEVGUPTAVsTHEINCOMETAXOFFICERWARD271.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.