INDER DEV GUPTA vs ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2

Headnote:(A) Income Tax Act, 1961 - Sections 147, 148, 144B, 151A - Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2022 - E Assessment of Income Escaping Assessment Scheme, 2022 - Reassessment proceedings - Jurisdiction - Whether Jurisdictional Assessing Officer (JAO) has jurisdiction to issue notice under Section 148 after insertion of Section 151A and the Scheme - Delhi High Court held that JAO and Faceless Assessing Officer (FAO) have concurrent jurisdiction - Dismissal of Special Leave Petition in limine does not constitute declaration of law or binding precedent under Article 141 - Principle of merger does not apply - Pending SLP against Delhi High Court's earlier judgment does not affect its binding nature in the absence of stay. (Paras 16-25)

Facts of the case:
The petitioners filed writ petitions challenging notices issued under Section 148 of the Income Tax Act, 1961 by the Jurisdictional Assessing Officer. They contended that after the insertion of Section 151A by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2022 and the notification of the E Assessment of Income Escaping Assessment Scheme, 2022, only the Faceless Assessing Officer has the authority to issue such notices. The respondent Revenue argued that the Delhi High Court had consistently held that both JAO and FAO have concurrent jurisdiction.

Findings of Court:
The court dismissed the petitions, holding that its earlier decision in TKS Builders (P.) Ltd. v. Income Tax Officer (2024) 167 taxmann.com 759 (Delhi) had settled the law in Delhi that JAO and FAO have concurrent jurisdiction. The court rejected the argument that the Supreme Court's dismissal of the SLP against the Bombay High Court judgment in Prakash Pandurang Patil affirmed that only FAO has jurisdiction, as dismissal in limine does not constitute a binding precedent. The court relied on Supreme Court decisions in Fuljit Kaur v. State of Punjab, State of Orissa v. Dhirendra Sundar Das, and Kunhayammed v. State of Kerala. The court also noted that the SLP against TKS Builders is still pending and not stayed, and the mere fact that the Supreme Court had issued notice and stayed assessment proceedings in some other cases did not affect the binding nature of TKS Builders.

Issues: The main issue was whether the Jurisdictional Assessing Officer has the jurisdiction to initiate reassessment proceedings under Section 148 of the Income Tax Act after the introduction of Section 151A and the E Assessment Scheme, 2022.

Ratio Decidendi: The court ruled that as per its earlier decision in TKS Builders, which is binding within the jurisdiction of the Delhi High Court and has not been stayed by the Supreme Court, both the Jurisdictional Assessing Officer and the Faceless Assessing Officer have concurrent jurisdiction to issue notices under Section 148. The dismissal of the SLP against the contrary view of the Bombay High Court does not override the Delhi High Court's position because such dismissal does not create a binding precedent.

Result: Petitions dismissed. Pending applications also dismissed as infructuous.

Legal Category Hierarchy

1. Challenge to reassessment notices under Section 148 of Income Tax Act on ground that only Faceless Assessing Officer has jurisdiction. (Para 1 , 2 )

2. Petitioners contend that only Faceless Assessing Officer has jurisdiction; Revenue asserts concurrent jurisdiction of JAO and FAO. (Para 3 , 13 )

3. Petitions dismissed; Court holds concurrent jurisdiction of JAO and FAO to initiate reassessment under Section 148. (Para 16 , 17 , 25 , 28 )

4. Does the Jurisdictional Assessing Officer have jurisdiction to issue notices under Section 148 after insertion of Section 151A?

Yes, this Court holds that both JAO and FAO have concurrent jurisdiction to initiate reassessment proceedings under Section 148 of the Act. (Para 16 , 17 , 18 , 25 )

5. What is the legal effect of the Supreme Court dismissing a special leave petition in limine without assigning reasons?

Such dismissal does not constitute a declaration of law or affirmation of the lower court's reasoning; it does not operate as res judicata or merge the order. (Para 19 , 20 , 21 , 22 , 23 , 24 )

6. Is the judgment in TKS Builders binding on this Court despite pending appeals before the Supreme Court?

Yes, the judgment remains binding precedent for Delhi as it has not been stayed and is pending adjudication. (Para 25 , 26 )

V. KAMESWAR RAO , J. (ORAL)

1. The captioned petitions have been filed impugning notices issued under Section 148 of the Income Tax Act, 1961 (the Act) by the respondent who is the Jurisdictional Assessing Officer (JAO). The contentions of the petitioner is that the said notices and all subsequent proceedings emanating there from are wholly without jurisdiction void ab intio and in contravention to the statutory scheme under Section 151A of the Act read with “E Assessment of Income Escaping Assessment Scheme, 2022” (the Scheme).

2. As the present petitions agitate a common issue, i.e., whether the JAO would have the jurisdiction to initiate reassessment proceedings under Section 148 of the Act, we may proceed to decide them together.

3. The contention of Mr. Kumail Abbas, learned counsel for the petitioners is that on 31.03.2023, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2022 (TOLA) inserted Section 151A into the Act, mandating that all notices under Section 148 of the Act must be issued by the Faceless Assessing Officer (FAO) alone. In furtherance, the Central Board of Direct Taxes (CBDT) vide notification S.O.1466(E) dated 29.03.2022 introduced the Scheme which in paragraph 3 expressly provides that all assessment, re-assessment or re-computation under Section 147 of the Act and the issuance of notice under Section 148 of the Act shall be conducted in a faceless manner as per Section 144B of the Act. It is therefore, only the Assessment Unit functioning under the National Faceless Assessment Centre (NFAC) namely, the FAO, which has lawful authority to issue such notices, and the JAO is wholly divested of such power.

4. He submitted that consistent with the above statutory scheme, several High Courts have categorically held that the JAO has no jurisdiction to issue reopening notices under Section 148 of the Act, in the cases listed below:

a. Hexaware Technologies Ltd. v. ACIT [2024] 162 taxmann.com 225 (Bombay HC);

b. Prakash Pandurang Patil v. ITO [2024:BHC-AS:32759-DB] (Bombay HC);

c. Sri Venkataramana Reddy Patloola v. DCIT [W.P. Nos. 13353, 16141 & 16877 of 2024] (Telangana HC);

d. Deepanjan Roy v. ADIT (International Taxation)-2 [W.P. No. 23573 of 2024] (Telangana HC);

e. Jatinder Singh Bhangu v. Union of India [CWP 15745 of 2024] (Punjab & Haryana HC);

f. Royal Bitumen (P.) Ltd. v. ACIT [2024] 164 taxmann.com 606 (Bombay HC);

g. Everest Kanto Cylinder Ltd. v. DCIT/ACIT [2024] 165 taxmann.com 192 (Bombay HC);

h. Sundaram Multi Pap Ltd. v. ACIT [2024] 164 taxmann.com 608 (Bombay HC);

i. Venus Jewel v. ACIT [2024] 164 taxmann.com 414 (Bombay HC).

5. He stated that the Revenue carried some of these judgments in appeal before the Supreme Court, which has since conclusively settled the issue vide ADIT (International Taxation)-2, Hyderabad & Anr. v. Deepanjan Roy, SLP(C) Diary No.33956/2025 by dismissing the SLP of the Revenue on 16.07.2025. The ratio of the above judgments have thus been affirmed by the Supreme Court, thereby crystallising that only the FAO has jurisdiction to issue notices under Section 148 of the Act.

6. He has placed reliance on the judgment of the High Court of Judicature at Madras in Dadha Pharma LLP v. DCIT, WP No. 35385 of 2024 wherein the High Court, had followed the ratio laid in Hexaware Technologies Ltd. (supra), while noting that the SLP against the same is pending before the Supreme Court.

7. Further, he submitted that the High Court for the State of Telangana in Arene Life Sciences Pvt. Ltd. v. Assessment Unit, Writ Petition No. 26645/2024 & connected matters has also held that where the assessment is centralized, the mandate of Section 144B read with Section 151A would apply in full rigour. Further, even the High Court of Bombay in Ganesh Nivrutti Jagtap v. Assistant Commissioner of Income Tax, Central Circle 5(3), Mumbai & Ors., Writ Petition (L) No. 18265/2024 decided on 02.09.2024 has unequivocally held that the central circle charges are not carved out as an except

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2025 Supreme(Online)(Del) 8464

IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, Vinod Kumar, JJ
INDER DEV GUPTA – Appellant
Versus
ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2 – Respondent
W.P.(C)-16937/2025

The Delhi High Court held that the Jurisdictional Assessing Officer retains concurrent jurisdiction with the Faceless Assessing Officer to issue Section 148 notices, and the Supreme Court's dismissal of an SLP in limine does not constitute binding precedent.

Legal Category Hierarchy

Table of Contents

4. Does the Jurisdictional Assessing Officer have jurisdiction to issue notices under Section 148 after insertion of Section 151A?

5. What is the legal effect of the Supreme Court dismissing a special leave petition in limine without assigning reasons?

6. Is the judgment in TKS Builders binding on this Court despite pending appeals before the Supreme Court?

2025 Supreme(Online)(Del) 8464

IN THE HIGH COURT OF DELHI AT NEW DELHIV. Kameswar Rao, Vinod Kumar, JJINDER DEV GUPTA – AppellantVersusASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2 – RespondentW.P.(C)-16937/2025

The Delhi High Court held that the Jurisdictional Assessing Officer retains concurrent jurisdiction with the Faceless Assessing Officer to issue Section 148 notices, and the Supreme Court's dismissal of an SLP in limine does not constitute binding precedent.

Legal Category Hierarchy

Table of Contents

4. Does the Jurisdictional Assessing Officer have jurisdiction to issue notices under Section 148 after insertion of Section 151A?

5. What is the legal effect of the Supreme Court dismissing a special leave petition in limine without assigning reasons?

6. Is the judgment in TKS Builders binding on this Court despite pending appeals before the Supreme Court?

Cases Referred (4)

IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, Vinod Kumar, JJ
INDER DEV GUPTA – Appellant
Versus
ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2 – Respondent
W.P.(C)-16937/2025