Reassessment notices under Section 148 upheld; concurrent JAO and FAO jurisdiction confirmed under Section 151A and 2022 Scheme

HC dismissed the writ petitions challenging reassessment notices issued under Section 148 of the Act. It held that, under Section 151A and the E-Assessment of Income Escaping Assessment Scheme, 2022, both Jurisdictional Assessing Officer (JAO) and Faceless Assessing Officer (FAO) have concurrent jurisdiction to initiate reassessment, following its earlier ruling in TKS Builders, which remains binding in Delhi as the pending SLP before SC has not resulted in any stay. The HC rejected reliance on the Bombay HC view, noting that SC's dismissal of the SLP against that judgment without reasons does not impliedly overrule TKS Builders. Consequently, reassessment proceedings were upheld.

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1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether, after insertion of Section 151A of the Income Tax Act, 1961 and notification of the "E-Assessment of Income Escaping Assessment Scheme, 2022", only the Faceless Assessing Officer has jurisdiction to issue notices under Section 148, thereby excluding the Jurisdictional Assessing Officer.

1.2 Whether dismissal in limine of special leave petitions by the Supreme Court against judgments of other High Courts holding that only Faceless Assessing Officers have jurisdiction under Section 148 alters or negates the binding effect, within the territorial jurisdiction of this Court, of the decision recognising concurrent jurisdiction of Jurisdictional Assessing Officers and Faceless Assessing Officers.

1.3 Whether interim orders passed by the Supreme Court staying assessment proceedings in other cases, where similar issues arise, require this Court to grant similar relief in the present petitions on the ground of parity.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Jurisdiction under Section 148 post Section 151A and Faceless Scheme

Interpretation and reasoning

2.1 The petitioners contended that Section 151A, read with the "E-Assessment of Income Escaping Assessment Scheme, 2022" and Section 144B, mandates that all reassessment and issuance of notices under Section 148 must be conducted in a faceless manner by the Faceless Assessing Officer alone, divesting the Jurisdictional Assessing Officer of power to issue such notices.

2.2 The Court noted that it has already decided this very issue in an earlier judgment, where it held that both the Jurisdictional Assessing Officer and the Faceless Assessing Officer possess concurrent jurisdiction to initiate reassessment proceedings under Section 148. That judgment has been consistently followed by this Court in subsequent cases involving similar challenges to notices under Section 148.

2.3 The Court observed that the earlier decision recognising concurrent jurisdiction is under challenge before the Supreme Court, but there is no stay of that judgment. A co-ordinate bench has also relied upon it to dismiss similar writ petitions, and the Supreme Court, while permitting the Revenue to proceed with reassessment in one such matter, has merely directed that any adverse order not be given effect to, without staying or setting aside this Court's reasoning.

Conclusions

2.4 The Court reaffirmed that, within its territorial jurisdiction, both the Jurisdictional Assessing Officer and the Faceless Assessing Officer presently have concurrent jurisdiction to issue notices under Section 148 and to initiate reassessment proceedings.

2.5 Consequently, the notices issued by the Jurisdictional Assessing Officer under Section 148 are not without jurisdiction or void ab initio on the ground urged, and the challenge founded on exclusive jurisdiction of the Faceless Assessing Officer fails.

Issue 2: Effect of Supreme Court's dismissal of SLPs against other High Courts' judgments (precedential value and doctrine of merger)

Legal framework discussed

2.6 The Court referred to and relied upon the settled law declared by the Supreme Court in Fuljit Kaur v. State of Punjab, State of Orissa v. Dhirendra Sundar Das, Kunhayammed v. State of Kerala and Khoday Distilleries Ltd. v. Sri Mahadeshwara Sahakara Sakkare Karkhane, regarding the effect of dismissal of special leave petitions under Article 136 of the Constitution.

2.7 The Court emphasised the principles that: (i) dismissal of an SLP in limine, without detailed reasons, does not amount to affirmation of the reasoning of the impugned judgment; (ii) such dismissal does not attract the doctrine of merger, does not constitute a declaration of law under Article 141, and does not operate as res judicata; (iii) even where limited reasons are recorded while refusing leave, the order remains one of refusal of leave, and the underlying judgment does not merge in the Supreme Court's order.

Interpretation and reasoning

2.8 The petitioners argued that dismissal of the SLPs by the Supreme Court against decisions of other High Courts (including those holding that only the Faceless Assessing Officer has jurisdiction under Section 148) effectively affirms those judgments and, by necessary implication, negates this Court's earlier decision recognising concurrent jurisdiction.

2.9 The Court rejected this contention, holding that the Supreme Court, in dismissing the SLPs, merely stated that it did not find merit in the petitions and did not enter into a detailed consideration of the issues; such non-speaking or limited orders of dismissal do not constitute binding precedent or declaration of law under Article 141, nor do they result in merger of the High Court judgments.

2.10 The Court noted that the SLP against its own decision recognising concurrent jurisdiction remains pending and has not yet been adjudicated on merits. Hence, there is no pronouncement of the Supreme Court overruling or reading down that decision.

Conclusions

2.11 Dismissal in limine of SLPs against other High Court judgments, including those which favour the petitioners' interpretation, does not alter or displace the binding effect of this Court's prior judgment recognising concurrent jurisdiction of Jurisdictional Assessing Officers and Faceless Assessing Officers.

2.12 Until the Supreme Court decides the pending SLP against this Court's earlier judgment, that decision "holds the fort" and continues to bind this Court in matters arising within its jurisdiction.

Issue 3: Effect of Supreme Court's interim orders staying assessment proceedings in other matters; claim of parity

Interpretation and reasoning

2.13 The petitioners relied on certain interim orders of the Supreme Court where notices were issued and assessment proceedings were stayed in cases arising from orders of this Court based on the same earlier judgment, and contended that, on parity, similar protection ought to be extended in the present petitions.

2.14 The Court observed that in those matters the Supreme Court had stayed further assessment proceedings or directed that adverse orders not be given effect to, but had not stayed or suspended the operation or reasoning of this Court's underlying judgments based on the earlier decision on concurrent jurisdiction.

2.15 The Court held that such case-specific interim orders by the Supreme Court, pending consideration of SLPs, do not amount to a stay of this Court's legal view and do not, by themselves, require this Court to depart from its settled position or to grant identical interim relief in all similar matters.

Conclusions

2.16 The Supreme Court's interim orders staying assessment proceedings in other cases do not undermine the binding nature of this Court's earlier decision on concurrent jurisdiction, and do not, by themselves, mandate grant of similar interim protection in the present petitions.

2.17 No relief on the basis of parity with those interim orders is warranted; the petitions cannot succeed merely because similar issues are sub judice before the Supreme Court with interim protection granted therein.

Overall Disposition

2.18 In light of the binding precedent of this Court recognising concurrent jurisdiction of the Jurisdictional Assessing Officer and the Faceless Assessing Officer under Section 148, and the limited legal effect of in limine dismissal of SLPs and case-specific interim orders of the Supreme Court, the impugned notices issued by the Jurisdictional Assessing Officer are held not to be without jurisdiction.

2.19 The writ petitions challenging the notices under Section 148 and the consequent reassessment proceedings are dismissed, and all pending applications are disposed of as infructuous.

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