Facts of the Case

A batch of writ petitions, including those filed by All India Kataria Educational Society and connected assessees, were filed before the Delhi High Court challenging notices issued under Section 148 of the Income-tax Act by the Jurisdictional Assessing Officer. The petitioners contended that after insertion of Section 151A and notification of the Faceless Assessment and Reassessment Scheme, 2022, only the Faceless Assessing Officer functioning under the National Faceless Assessment Centre had jurisdiction to issue reassessment notices. The notices issued by the Jurisdictional Assessing Officer were therefore alleged to be without jurisdiction and void ab initio.

Issues Involved

Whether, after insertion of Section 151A and notification of the Faceless Assessment Scheme, reassessment notices under Section 148 can be validly issued by the Jurisdictional Assessing Officer, whether the faceless regime excludes jurisdiction of the Jurisdictional Assessing Officer, and whether prior Delhi High Court precedents recognizing concurrent jurisdiction continue to hold the field.

Petitioner’s Arguments

The petitioners argued that Section 151A mandates faceless issuance of notices under Section 148 and that CBDT notifications implementing the Faceless Assessment Scheme expressly require reassessment proceedings to be conducted only through the Faceless Assessing Officer. Reliance was placed on judgments of the Bombay High Court, Telangana High Court, Punjab & Haryana High Court and Rajasthan High Court holding that reassessment notices issued by the Jurisdictional Assessing Officer were invalid. It was further contended that the Supreme Court’s dismissal of SLPs in certain cases effectively settled the law in favour of exclusive jurisdiction of the Faceless Assessing Officer and rendered the Delhi High Court’s decision in TKS Builders per incuriam.

 

 

Respondent’s Arguments

The Revenue submitted that the Delhi High Court had consistently held that both the Jurisdictional Assessing Officer and the Faceless Assessing Officer have concurrent jurisdiction to initiate reassessment proceedings. It was argued that dismissal of SLPs by the Supreme Court without reasons does not amount to affirmation of High Court judgments or declaration of law under Article 141. The Revenue relied on binding Delhi High Court precedents including TKS Builders, PC Jeweller Ltd., Mala Petrochemicals and Polymers, Mehak Jagga and other connected cases.

Court Order / Findings

The Delhi High Court rejected the challenge to reassessment notices and reaffirmed its earlier view that, within the jurisdiction of Delhi, both the Jurisdictional Assessing Officer and the Faceless Assessing Officer possess concurrent jurisdiction to issue notices under Section 148. The Court held that dismissal of SLPs by the Supreme Court in limine, without detailed reasons, does not amount to affirmation of the reasoning of High Courts nor does it override binding Delhi High Court precedents. The Court relied on settled Supreme Court jurisprudence on the effect of dismissal of SLPs, including Kunhayammed, Fuljit Kaur and Khoday Distilleries. It was noted that the judgment in TKS Builders continues to hold the field in Delhi as it has not been stayed or set aside by the Supreme Court. The Court further held that centralisation of cases or operation of the faceless scheme does not divest the Jurisdictional Assessing Officer of statutory authority under Section 148.

Important Clarification

The Court clarified that unless the Supreme Court expressly settles the issue by a reasoned judgment or stays the operation of Delhi High Court decisions, the principle of concurrent jurisdiction as laid down in TKS Builders remains binding within Delhi. Dismissal of SLPs in limine does not create binding precedent nor nullify existing High Court judgments.

Final Outcome

All writ petitions, including those filed by All India Kataria Educational Society, were dismissed. The reassessment notices issued under Section 148 by the Jurisdictional Assessing Officer were upheld as valid, and the pending applications were dismissed as infructuous.

Link to download order- https://mytaxexpert.co.in/uploads/1769502442_ALLINDIAKATARIAEDUCATIONALSOCIETYVsASSISTANTCOMMISSIONEROFINCOMETAXCENTRALCIRCLE2.pdf

 

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