Isabella Mariam

The High Court of Delhi Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar has held that both the Jurisdictional Assessing Officer (JAO) and the Faceless Assessing Officer (FAO) are competent to issue reassessment notices under Section 148 of the Income Tax Act, 1961. Deciding a batch of writ petitions challenging reassessment notices issued by the JAO as without authority, the Court addressed a controversy that arose after the E-Assessment of Income Escaping Assessment Scheme, 2022 introduced the National Faceless Assessment Centre and faceless assessing units. The Court concluded that the faceless regime does not displace the jurisdiction of local assessing officers and that reassessment proceedings initiated by either JAO or FAO are valid. Accordingly, the Court dismissed the petitions and declined to interfere with the notices.

The petitions were filed challenging the validity of reassessment notices issued under Section 148 of the Income Tax Act, 1961 by the Jurisdictional Assessing Officer. The petitioners asserted that the notices and subsequent proceedings were void ab initio and without jurisdiction as they allegedly contravened Section 151A of the Act read with the E-Assessment of Income Escaping Assessment Scheme, 2022. Their case was that reassessment notices could be issued only by the Faceless Assessing Officer functioning under the National Faceless Assessment Centre.

Also Read: Kerala Judicial Officer Moves Supreme Court Against High Court Penalty for Summary Disposal of 1,900 Petty Cases

The petitioners referred to the insertion of Section 151A through the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2022 and argued that the statutory structure required all actions relating to reassessment to be conducted under the faceless system. They relied on multiple decisions of the Bombay, Telangana, Punjab & Haryana, and Rajasthan High Courts which held that only the Faceless Assessing Officer had jurisdiction under Section 148. They further submitted that the dismissal of the Special Leave Petition in Deepanjan Roy settled the legal position and that the principle of parity justified grant of stay because the Supreme Court had stayed reassessment proceedings in similarly placed matters.

The Revenue opposed the petitions and submitted that this Court had consistently taken the view that both the Jurisdictional Assessing Officer and the Faceless Assessing Officer have concurrent jurisdiction to initiate reassessment proceedings. It relied on TKS Builders and subsequent Delhi High Court decisions that followed it, arguing that the Supreme Court had not stayed those judgements. The Revenue distinguished the dismissal of the SLP in Deepanjan Roy by stating that dismissal in limine without reasoning does not settle the law.

The Court recorded that “this Court has settled the law relating to the issue in TKS Builders (supra), which though under challenge before the Supreme Court, has not been stayed.” It noted that “both JAO and FAO possess concurrent jurisdiction to initiate reassessment proceedings under Section 148 of the Act.”

The Court further observed that “in PC Jeweller Ltd. (supra), a co-ordinate bench of this Court had dismissed a writ petition seeking similar relief by following the judgment in TKS Builders (supra). Though the said judgment has been taken in appeal before the Supreme Court, the Revenue has been permitted to continue the proceedings with a caveat that any order, if passed adverse to the petitioner therein shall not be given effect.”

Rejecting the reliance on the dismissal of the SLP in Deepanjan Roy, the Court stated that “the Supreme Court while dismissing the SLP, had only stated that it does not find any merit in the SLP, without giving any detailed reasons.”

The Court referred to Fuljit Kaur and recorded that “dismissal of the special leave petition in limine by this Court does not mean that the reasoning of the judgment of the High Court stands affirmed… nor such an order operates as res judicata.”

The Court additionally recorded: “May be that at the admission stage itself the opposite party appears on caveat or on notice and offers contest… In any case, the dismissal would remain a dismissal by a non-speaking order where no reasons have been assigned and no law has been declared by the Supreme Court.” The Bench also held that “as such, the judgment in TKS Builders (supra) would still hold the fort insofar as the jurisdiction of Delhi is concerned. We are bound by the same.”

Also Read: Petitioner Cannot Be Rendered Completely Remediless: Delhi HC Allows Time-Barred Appeal Against Customs’ Gold Confiscation After Traveller Says He Acted On Wrong Legal Advice

Regarding the plea for parity based on interim stays granted by the Supreme Court in other matters, the Court recorded that “the Supreme Court has not stayed the effect of the orders passed in the aforesaid two writ petitions based on the judgment in the case of TKS Builders (supra).”

Finally, the Court held that “in view of the above discussion, we find no merit in the present petitions, the same are dismissed.  The pending applications having become infructuous are also dismissed.”

Advocates Representing The Parties

For the Petitioners: Mr. Kumail Abbas, Mr. Deepanshu Mehta, Ms. Sahar Irfan and Ms. Riya Jain, Advs.
For the Respondents: Mr. Anurag Ojha, SSC, Mr. V. K. Saksena, JSC, Ms. Hemlata Rawat, JSC and Mr. Abhay Singh, Ms. Tanuja & Mr. Saurabh, Advs.; Mr. Sunil Agarwal, SSC, Mr. Viplav Acharya, JSC, Ms. Priya Sarkar, JSC, Mr. Anugrah Dwivedi and Mr. Utkarsh Tiwari, Advs.

Case Title: Inder Dev Gupta & Ors. vs Assistant Commissioner of Income Tax Central Circle 2-Delhi & Ors.
Neutral Citation: 2025: DHC:10268-DB
Case Number: W.P.(C) 16937/2025 & connected matters
Bench: Justice V. Kameswar Rao, Justice Vinod Kumar