Facts of the Case

A batch of writ petitions was filed by Inder Dev Gupta and connected petitioners challenging notices issued under Section 148 of the Income-tax Act by the Jurisdictional Assessing Officer of Central Circle-2, Delhi. The petitioners contended that after insertion of Section 151A and notification of the E-Assessment of Income Escaping Assessment Scheme, 2022, reassessment proceedings could be initiated only by the Faceless Assessing Officer and not by the Jurisdictional Assessing Officer. It was argued that the impugned notices and consequential proceedings were without jurisdiction and void ab initio.

Issues Involved

Whether, after insertion of Section 151A and introduction of the Faceless Assessment Scheme, reassessment notices under Section 148 can be validly issued by the Jurisdictional Assessing Officer, whether centralisation of cases excludes the application of faceless procedures, and whether dismissal of SLPs by the Supreme Court against contrary High Court judgments nullifies the binding effect of Delhi High Court precedents.

Petitioner’s Arguments

The petitioners argued that Section 151A mandates faceless issuance of notices under Section 148 and that CBDT notifications expressly require reassessment proceedings to be conducted only through the Faceless Assessing Officer. Reliance was placed on several judgments of the Bombay, Telangana, Punjab & Haryana and Rajasthan High Courts holding that the Jurisdictional Assessing Officer lacks authority to issue reassessment notices. It was further contended that dismissal of SLPs by the Supreme Court in certain cases amounted to affirmation of those High Court judgments, rendering the Delhi High Court’s decision in TKS Builders per incuriam.

Respondent’s Arguments

The Revenue submitted that the Delhi High Court has consistently held that both the Jurisdictional Assessing Officer and the Faceless Assessing Officer possess concurrent jurisdiction to initiate reassessment proceedings. It was argued that dismissal of SLPs in limine does not amount to declaration of law under Article 141 and does not override binding Delhi High Court judgments. The Revenue relied on precedents including TKS Builders, PC Jeweller Ltd., Mala Petrochemicals and Polymers, Mehak Jagga and other connected cases.

Court Order / Findings

The Delhi High Court held that the issue stood settled within the jurisdiction of Delhi by its decision in TKS Builders, which recognises concurrent jurisdiction of the Jurisdictional Assessing Officer and the Faceless Assessing Officer. The Court observed that dismissal of SLPs without reasons does not amount to affirmation of High Court judgments or declaration of law by the Supreme Court. Relying on settled Supreme Court jurisprudence in Kunhayammed, Fuljit Kaur and Khoday Distilleries, the Court held that TKS Builders continues to bind this Court as it has not been stayed or set aside. The Court further noted that centralisation of cases does not carve out any exception to the statutory authority of the Jurisdictional Assessing Officer 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 doctrine of concurrent jurisdiction laid down in TKS Builders remains binding within Delhi. Dismissal of SLPs in limine does not negate existing precedents.

Final Outcome

All writ petitions were dismissed. The reassessment notices issued under Section 148 by the Jurisdictional Assessing Officer were upheld as valid, and all pending applications were dismissed as infructuous.

Link to Download order- https://mytaxexpert.co.in/uploads/1769502900_KAWATRATENTANDCATERERSPRIVATELIMITEDVsASSISTANTCOMMISSIONEROFINCOMETAXCENTRALCIRCLE16DELHI.pdf

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