Facts of the Case

The petitioner, M/s Empire Fasteners, filed two writ petitions challenging the order dated 27.06.2025 passed under Section 148A(3) of the Income-tax Act, 1961 and the consequential notice dated 27.06.2025 issued under Section 148 for Assessment Year 2019–20.

The primary challenge raised by the petitioner was that the notice dated 08.03.2025 issued under Section 148A(1) had been issued by the Jurisdictional Assessing Officer and not by the Faceless Assessing Officer. According to the petitioner, after introduction of the faceless reassessment regime, only the Faceless Assessing Officer had jurisdiction to initiate reassessment proceedings, rendering the entire proceedings void.

Issues Involved

Whether reassessment proceedings initiated by the Jurisdictional Assessing Officer are without jurisdiction after introduction of the faceless reassessment regime, and whether the order passed under Section 148A(3) and the notice issued under Section 148 are liable to be quashed on that ground alone.

Petitioner’s Arguments

The petitioner contended that the issue stood concluded in favour of assessees by the judgment of the Bombay High Court in Hexaware Technologies Ltd. and Prakash Pandurang Patil, and that dismissal of the Special Leave Petition by the Supreme Court in Prakash Pandurang Patil amounted to affirmation of the view that only the Faceless Assessing Officer has jurisdiction.

It was argued that the reassessment proceedings initiated by the Jurisdictional Assessing Officer were contrary to Section 151A and the faceless reassessment scheme, and therefore deserved to be quashed.

Respondents’ Arguments

The Revenue opposed the petitions by relying on the binding decision of the Delhi High Court in TKS Builders Pvt. Ltd. v. Income Tax Officer, which held that both the Jurisdictional Assessing Officer and the Faceless Assessing Officer have concurrent jurisdiction to initiate reassessment proceedings.

It was submitted that the judgment in TKS Builders continued to bind the Delhi High Court as it had not been stayed by the Supreme Court. The Revenue 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.

Court Order / Findings

The Delhi High Court examined the rival submissions and held that the issue was squarely covered by the judgment in TKS Builders Pvt. Ltd., which conclusively settled the question of jurisdiction within the territorial jurisdiction of the Delhi High Court.

The Court relied on settled Supreme Court precedents including Kunhayammed and Khoday Distilleries to hold that dismissal of Special Leave Petitions in limine or without reasons does not attract the doctrine of merger nor constitute binding precedent.

The Court further noted that similar petitions had consistently been dismissed by the Delhi High Court by following TKS Builders, including in PC Jeweller Ltd., Mehak Jagga, Mala Petrochemicals and All India Kataria Education Society.

Important Clarification

The Court clarified that until the judgment in TKS Builders is set aside or stayed by the Supreme Court, it continues to be binding within the 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.

Final Outcome

Both writ petitions filed by M/s Empire Fasteners were dismissed. The Delhi High Court upheld the validity of reassessment proceedings initiated by the Jurisdictional Assessing Officer under Sections 148A and 148 of the Income-tax Act and reaffirmed that the Jurisdictional Assessing Officer and the Faceless Assessing Officer have concurrent jurisdiction to initiate reassessment proceedings. Pending applications were dismissed as infructuous.

Link to download order- https://www.mytaxexpert.co.in/uploads/1769681930_MSEMPIREFASTENERSVsTHEASSISTENTCOMMISSIONEROFINCOMETAXANDANR.ANR..pdf

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