TaxTMI 
TaxTMI 
JAO vs. FAO: Reassessment in the Faceless Era: The Continuing Validity of JAO Jurisdiction Pending Supreme Court Adjudication
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.... DELHI HIGH COURT) that both JAO and FAO enjoy concurrent jurisdiction to issue notices u/s 148. The petitioners, however, relied heavily on contrary High Court decisions (notably from Bombay, Telangana, Punjab & Haryana) and subsequent Supreme Court orders dismissing SLPs against those judgments to contend that only FAO has jurisdiction. The Supreme Court's later intervention in Yukti Export v. ITO, staying assessment proceedings and tagging the matter with a pending SLP, indicates that the question has now been elevated to a pan-India issue with wider systemic consequences. In the broader legal framework, these decisions lie at the intersection of: (i) statutory reconfiguration of assessment jurisdiction u/s 151A (faceless regime); (ii) constitutional principles governing precedential value of SLP orders; and (iii) inter-court comity and the doctrine of per incuriam as applied to conflicting High Court views. Key Legal Issues 1. Who has jurisdiction to issue notices u/s 148: JAO, FAO, or both? The primary substantive issue is whether, post Section 151A and the introduction of the faceless scheme, the power to initiate reassessment u/s 148 is vested exclusively in the FAO ....
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....4 (7) TMI 971 - BOMBAY HIGH COURT)-which, in substance, hold that after the introduction of Section 151A and the faceless reassessment architecture, only the FAO is competent to issue notices u/s 148. These judgments typically reason that: * The statutory and scheme-based restructuring centralizes reassessment in faceless units; and * Permitting JAO-initiated reassessments would undermine the policy and text of the faceless regime. By contrast, the Delhi High Court in T.K.S. Builders (and consistently thereafter) has taken the view that JAO and FAO enjoy concurrent jurisdiction. The present judgment reiterates this position, holding in para 10 that "both JAO and FAO possess concurrent jurisdiction to initiate reassessment proceedings u/s 148 of the Act." The Court does not reopen the interpretive exercise afresh; instead it treats T.K.S. Builders as binding precedent, thereby converting the petitions into a challenge primarily on the ground of inconsistency with alleged Supreme Court law. Although the text of Section 151A is not reproduced, the fault line is clear: whether Section 151A operates as a jurisdiction-shifting provision (exclusive FAO) or as an enabling/administrat....
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....nt of law actually contained in a speaking SLP dismissal (which would bind under Article 141), and (ii) the High Court judgment under challenge. Since the Supreme Court did not articulate reasoning on the jurisdictional question, there is no "law declared" that would disable the Delhi High Court from maintaining its earlier view. 3. Per incuriam and binding force of T.K.S. Builders The petitioners asserted that T.K.S. Builders was per incuriam in light of Section 151A and intervening Supreme Court developments. Reliance was placed on Hyder Consulting (UK) Ltd. v. State of Orissa, 2015 (3) TMI 1452 - Supreme Court, on the doctrine of per incuriam. The High Court (paras 9-11, 18-19) rejects this line of attack primarily on institutional grounds: * T.K.S. Builders is a coordinate bench decision squarely on the same issue, and has been consistently followed in multiple subsequent Delhi High Court cases, including PC Jeweller Ltd., Mala Petrochemicals and Polymers, Mehak Jagga, All India Kataria Education Society, and Empire Fasteners. * The SLP against T.K.S. Builders is pending; there is no stay of the judgment. Therefore it "still holds the fort" within Delhi (para 18). * No....
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.... within Article 141; and * does not nullify or stay the Delhi High Court's judgment as such-its operation is confined to the specific assessment proceedings of the petitioner before the Supreme Court. Practically, though, the Supreme Court's stay will likely encourage similarly situated assessees to seek protective relief, and may persuade lower fora to adopt a cautious approach pending final resolution by the Apex Court. Key Holdings and Reasoning 1. Operative holdings (ratio) The Delhi High Court's ratio decidendi can be distilled as follows: * Concurrent jurisdiction remains the law in Delhi: Until set aside by the Supreme Court or a larger bench, the decision in T.K.S. Builders (P.) Ltd. v. ITO governs; both JAO and FAO have concurrent jurisdiction to issue notices u/s 148 within the territorial jurisdiction of the Delhi High Court (paras 9-11, 18). * SLP dismissals do not, on these facts, displace that position: The Supreme Court's dismissals of SLPs against Bombay and Telangana decisions-whether non-speaking or in the form used in Prakash Pandurang Patil-do not amount to a declaration of law that invalidates the Delhi view or renders T.K.S. Builders ....