Facts of the Case

The petitioner, Rhiti Talent Management Private Limited, filed a writ petition as part of a batch of connected matters challenging reassessment proceedings initiated under Section 148 of the Income-tax Act, 1961. The principal challenge was to the jurisdiction of the Jurisdictional Assessing Officer to issue reassessment notices, with the petitioner contending that, in view of the faceless assessment regime and Section 151A of the Act, only the Faceless Assessing Officer was empowered to initiate reassessment proceedings. The petitioner relied upon judgments of various High Courts, including the Bombay High Court and Telangana High Court, which had taken a view that only the Faceless Assessing Officer could issue notices under Section 148.

Issues Involved

Whether reassessment proceedings under Section 148 can be validly initiated by the Jurisdictional Assessing Officer within the territorial jurisdiction of the Delhi High Court, whether Section 151A mandates exclusive jurisdiction of the Faceless Assessing Officer, and whether dismissal of Special Leave Petitions by the Supreme Court against judgments of other High Courts alters the binding nature of Delhi High Court precedents.

Petitioner’s Arguments

The petitioner contended that the issue was no longer res integra in view of multiple High Court judgments holding that only the Faceless Assessing Officer has jurisdiction to issue reassessment notices under Section 148. It was argued that the Supreme Court, by dismissing SLPs in Prakash Pandurang Patil and Deepanjan Roy, had settled the law under Article 141 of the Constitution, thereby impliedly affirming the view taken by other High Courts and rendering the Delhi High Court decision in TKS Builders Pvt. Ltd. per incuriam. The petitioner further argued that Section 151A statutorily mandates reassessment proceedings to be conducted only in a faceless manner.

Respondent’s Arguments

The Revenue submitted that within the jurisdiction of the Delhi High Court, the issue stood conclusively settled by the decision in TKS Builders Pvt. Ltd. v. Income Tax Officer, which recognises concurrent jurisdiction of the Jurisdictional Assessing Officer and the Faceless Assessing Officer. It was argued that dismissal of SLPs by the Supreme Court without a reasoned judgment does not amount to declaration of law under Article 141 and does not negate binding Delhi High Court precedents. The Revenue further pointed out that the judgment in TKS Builders had not been stayed by the Supreme Court.

Court Order / Findings

The Delhi High Court examined the rival submissions and held that it was bound by its earlier decision in TKS Builders Pvt. Ltd., which clearly holds that both the Jurisdictional Assessing Officer and the Faceless Assessing Officer possess concurrent jurisdiction to initiate reassessment proceedings under Section 148. The Court analysed the effect of dismissal of SLPs by the Supreme Court and reiterated settled principles that dismissal of an SLP in limine, even with a brief observation, does not constitute affirmation of the High Court judgment nor declaration of law under Article 141 unless reasons are assigned. Relying on authoritative Supreme Court decisions including Kunhayammed, Fuljit Kaur, and Khoday Distilleries, the Court rejected the contention that dismissal of SLPs against judgments of other High Courts rendered TKS Builders per incuriam. The Court further noted that several recent Delhi High Court decisions had consistently followed TKS Builders and dismissed similar challenges.

Important Clarification

The Court clarified that until the Supreme Court finally decides the issue or stays the operation of TKS Builders, the said judgment continues to bind benches of the Delhi High Court. Divergent views of other High Courts or dismissal of SLPs against such views without a reasoned order do not dilute the binding nature of jurisdictional precedents.

Final Outcome

The writ petition filed by Rhiti Talent Management Private Limited was dismissed. The reassessment proceedings initiated under Section 148 by the Jurisdictional Assessing Officer were upheld as valid in law. All pending applications were dismissed as infructuous, and the decision was rendered in favour of the Revenue and against the petitioner.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1769681424_RHITITALENTMANAGEMENTPRIVATELIMITEDVsTHEINCOMETAXOFFICERWARD211.pdf

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