Facts of the Case

The petitioner, Sumanglam Sewa Aivam Education Samiti, filed a writ petition challenging notices issued under Section 148 of the Income-tax Act by the Assistant Commissioner of Income Tax, Central Circle-2, Delhi. The petitioner 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 functioning under the National Faceless Assessment Centre and not by the Jurisdictional Assessing Officer. The challenge was part of a batch of petitions raising an identical jurisdictional issue.

Issues Involved

Whether reassessment notices issued under Section 148 by the Jurisdictional Assessing Officer are without jurisdiction in view of Section 151A and the Faceless Assessment Scheme, whether centralisation of cases under the Central Circle alters the applicability of the faceless regime, and whether dismissal of SLPs by the Supreme Court against contrary High Court judgments overrides binding Delhi High Court precedent.

Petitioner’s Arguments

The petitioner argued that Section 151A mandates faceless issuance of notices under Section 148 and that CBDT notifications implementing the Faceless Assessment Scheme divest the Jurisdictional Assessing Officer of authority to initiate reassessment. Reliance was placed on judgments of the Bombay, Telangana, Punjab & Haryana and Rajasthan High Courts holding that only the Faceless Assessing Officer has jurisdiction. It was further contended that dismissal of the Revenue’s SLPs by the Supreme Court against such judgments settled the law and rendered the Delhi High Court’s decision in TKS Builders per incuriam.

Respondent’s Arguments

The Revenue submitted that within the jurisdiction of Delhi, the issue stood settled by the Delhi High Court in TKS Builders and subsequent decisions, which recognise concurrent jurisdiction of the Jurisdictional Assessing Officer and the Faceless Assessing Officer. It was argued that dismissal of SLPs in limine does not amount to declaration of law under Article 141 and does not dilute binding Delhi High Court precedent, particularly when judgments such as TKS Builders have not been stayed or set aside by the Supreme Court.

Court Order / Findings

The Delhi High Court held that the issue was squarely covered by its earlier judgment in TKS Builders, which continues to hold the field in Delhi. The Court reiterated that dismissal of SLPs by the Supreme Court without detailed reasons does not amount to affirmation of High Court judgments or declaration of law. Relying on Supreme Court decisions in Kunhayammed, Fuljit Kaur and Khoday Distilleries, the Court held that the doctrine of merger does not apply to non-speaking dismissal of SLPs. The Court further observed that centralisation of cases under the Central Circle 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 between the Jurisdictional Assessing Officer and the Faceless Assessing Officer, as laid down in TKS Builders, remains binding within the territorial jurisdiction of Delhi.

Final Outcome

The writ petition was dismissed. The Delhi High Court upheld the validity of reassessment notices issued under Section 148 by the Jurisdictional Assessing Officer, and all pending applications were dismissed as infructuous.

Link to Download order- https://mytaxexpert.co.in/uploads/1769503153_SUMANGLAMSEWAAIVAMEDUCATIONSAMITIVsASSISTANTCOMMISSIONEROFINCOMETAXCENTRALCIRCLE2.pdf

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