Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ----
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    Transformation of Tax Deduction Mechanism in respect of donations to certain funds : Clause 133 of t...
    Simplified Rent Deduction Mechanism for Non-HRA Assessees : Clause 134 of the Income Tax Bill, 2025 ...
    offer financial relief to taxpayers who incur significant medical expenses on Specified Diseases in ...
    Supportive Tax Provisions for Individuals and HUFs Caring for Disabled Dependents persons : Clause 1...
    Understanding Health Insurance Deductions : Insights from Clause 126 of the Income Tax Bill, 2025 Vs...
    Tax incentives to individuals who are enrolled in the Agnipath Scheme : Clause 125 of the Income Tax...
    Tax Incentives for Pension Contributions under NPS : Clause 124 of the Income Tax Bill, 2025 Vs. Sec...
    Statutory provision offering tax deductions through savings and investments in specified financial p...
    Comprehensive Guide to Understanding Deductions from Gross total income in Clause 122 of Income Tax ...
    Conditions for submission of returns for losses and such losses can be carried forward and set off a...
    Disallowing the set-off of losses against undisclosed income detected through searches, requisitions...
    Legal Insights into carry forward and set off of losses under the head "Capital gains" : Clause 111 ...
    Condition for carry forward and set off of losses in cases of strategic restructuring : Clause 119 o...
    Condition under which losses can be carried forward and set off against future profits : Clause 119 ...
    Treatment of losses incurred in the activity of owning and maintaining race horses : Clause 115 of I...
    Structured mechanism for treatment of losses from specified businesses in Clause 114 of the Income T...
    Understanding the Tax Treatment of Speculation Losses in Clause 113 of Income Tax Bill, 2025 Vs. Sec...
    Legal Frameworks for losses and unabsorbed depreciation Carry Forward in Co-operative Bank Mergers a...
    Strategic Disinvestment and Tax Benefits in Clause 117 of the Income Tax Bill, 2025 VS. Section 72AA...
    Analysis of Tax Provisions in Corporate Amalgamations Clause 116 of the Income Tax Bill, 2025 Vs. Se...
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    Act RulesBills
    Show AI Summary
    Deduction for charitable donations: consolidated framework updates eligible recipients, compliance, digital reporting and anti-duplication rules.
    Clause 133 creates a consolidated deduction regime for monetary donations to specified funds and institutions, distinguishing deduction tiers, imposing an aggregate income-related cap on certain donations, prohibiting duplicate claims for the same donation, and requiring non-cash payment for larger contributions. Deduction entitlement is conditional on donee institutions furnishing prescribed information and accepting risk-based verification; definitions exclude purposes wholly or substantially of a religious nature and delegate procedural detail to subordinate legislation.
    Act RulesBills
    Show AI Summary
    Rent deduction for non-HRA assessees clarifies eligibility, computation limits, ownership exclusions and rule made procedural conditions.
    Clause 134 grants a deduction for rent paid by individuals for residential accommodation occupied as their own residence, allowable only for rent exceeding 10% of total income and capped at the lower of a prescribed monthly ceiling or 25% of total income, with percentages computed on total income before this deduction. The clause excludes assessees who own residential accommodation at the relevant place or who fall within a specified schedule entry, and authorises rule making for additional conditions and procedural requirements to enable verification and prevent double benefit.
    Act RulesBills
    Show AI Summary
    Medical expense deduction for specified diseases allows capped relief with specialist prescriptions and insurer offset.
    Clause 128 permits residents, including individuals and HUFs, to deduct out-of-pocket medical treatment expenses for specified diseases subject to prescribed monetary caps, requires prescriptions from specified medical specialists, reduces deductions by amounts reimbursed by insurers or employers, provides an increased cap for senior citizens, and defines key terms such as dependant and insurer; the clause aligns with Section 80DDB and Rule 11DD while simplifying certain documentation requirements and deferring disease enumeration to rules or notifications.
    Act RulesBills
    Show AI Summary
    Deduction for disabled dependents: proposed clause mirrors existing relief while altering exclusions and insurance conditions and documentation requirements.
    Clause 127 permits resident individuals and HUFs to deduct expenses for maintenance, medical treatment, training or rehabilitation of a dependant with a disability and contributions to qualifying insurance schemes; it prescribes standard and higher deduction limits for severe disability, conditions for scheme-based deductions (annuity or lump sum on death or at a specified age), taxability if the dependant predeceases the taxpayer, a mandatory medical certificate (with renewal where required), and an exclusion for dependants claiming relief under a separate provision.
    Act RulesBills
    Show AI Summary
    Health insurance deduction expanded to cover premiums, medical expenditure, preventive checks, and senior citizen relief.
    Clause 126 provides deductions for health insurance premia and medical expenditure for individuals and HUFs, establishes separate caps for assessees and parents, specifies an aggregate ceiling for combined insurance and medical claims, allows a sub cap for preventive health check ups, prescribes payment modes with non cash norms for most deductions, recognises enhanced relief and lump sum treatment for senior citizens, and sets definitions and insurer eligibility criteria to guide application.
    Act RulesBills
    Show AI Summary
    Deduction for Agniveer contributions enables tax relief for enrolled personnel, encouraging savings, recruitment and retention.
    A statutory deduction allows full deduction of contributions to the Agniveer Corpus Fund by individuals enrolled in the Agnipath Scheme and of corresponding Central Government contributions, with eligibility defined by enrolment and effective date; taxpayers must substantiate contributions and authorities must adapt administration and reporting to process both individual and government contributions.
    Act RulesBills
    Show AI Summary
    Pension contribution deduction: new Clause enhances employer and individual relief while clarifying withdrawal and annuity rules.
    Clause 124 establishes statutory deductions for employer and individual contributions to Central Government-notified pension schemes, prescribing differentiated employer contribution caps, an aggregate individual contribution cap applicable to both adult and minor accounts, anti-double-deduction rules, taxable treatment of withdrawals with nominee/guardian exceptions on death, annuity purchase deferral of receipt, and a defined conception of salary for limit calculations.
    Act RulesBills
    Show AI Summary
    Deduction for specified savings: new clause aligns tax incentives with existing framework while preserving compliance conditions.
    Clause 123 grants deductions to individuals and HUFs for payments in a tax year towards life insurance premia, deferred annuities, provident fund contributions and other specified investments listed in Schedule XV, subject to a maximum deduction of INR 1,50,000 and to conditions set out in Schedule XV; it aligns with Section 80C's policy of incentivising long term savings while differing in the specific catalogue of eligible investments and the detailed conditions governing deductibility.
    Act RulesBills
    Show AI Summary
    Deductions from Gross Total Income now constrained by non-duplication and market-value rules, tightening tax compliance obligations.
    Clause 122 governs deductions from gross total income by capping aggregate deductions at gross total income, prohibiting duplication of deductions between entity and member levels, restricting multiple claims under different provisions, conditioning deductions on timely filing and claiming in the return, and requiring inter-business transfers to be recorded at market value; it also defines gross total income for deduction purposes.
    Act RulesBills
    Show AI Summary
    Filing requirement for loss carryforward: procedural return submission determines eligibility to set off future taxable income.
    Only losses determined pursuant to a return filed under the prescribed statutory procedure qualify for carry forward and set off; Clause 121 conditions eligibility on a return filed under Section 263(1) while Section 80 conditions it on a return filed under Section 139(3), each referencing the statutory provisions that define eligible loss categories and thereby tying substantive loss recognition to procedural compliance.
    Act RulesBills
    Show AI Summary
    Disallowing set off of losses against undisclosed income prevents offset after tax searches, requisitions, or surveys.
    Clause 120 of the Income Tax Bill, 2025 disallows any loss, whether carried forward or otherwise, and any unabsorbed depreciation from being set off against undisclosed income included in total income where such income is detected as a consequence of a search, requisition, or survey; the clause is expressly overriding and depends on the Bill's definition of undisclosed income for its scope.
    Act RulesBills
    Show AI Summary
    Carry forward of capital losses: long-term losses limited to long-term gains; short-term losses may be set off under new Bill.
    Clause 111 and Section 74 permit carry forward and set off of unabsorbed capital losses, distinguishing long-term losses (set off only against long-term capital gains) from short-term losses (set off against any capital gains), and both limit carry forward to an eight-year period measured from the year the loss was computed; Clause 111 uses the term "tax year" and cross-references related provisions in the new Bill while Section 74 refers to "assessment year."
    Act RulesBills
    Show AI Summary
    Carry-forward restrictions on losses after ownership or constitution changes limit tax benefits from strategic restructuring.
    Clause 119 restricts carry forward and set off of losses after changes in firm constitution, business succession by non-inheritance successors, and corporate shareholding changes unless continuity of beneficial voting power is maintained. It permits an exception for start-ups where all original shareholders retain their shares and losses occurred within the first ten years, and enumerates exceptions (death, gifts to relatives, specified amalgamations/demergers, approved insolvency resolution plans) while defining terms relevant for application.
    Act RulesBills
    Show AI Summary
    Loss carryforward restrictions: ownership or constitution changes can bar set-off unless continuity conditions and specified exceptions apply.
    Clause 119 conditions the permissibility of carrying forward and setting off past losses where ownership or constitution changes occur: it denies set-off for losses attributable to retired or deceased partners upon firm reconstitution, disallows successors (other than by inheritance) from using predecessor losses, and restricts non-public companies from setting off prior losses after shareholding changes unless continuity conditions including original beneficial owner control or start-up safeguards are met; specified exceptions and ongoing compliance requirements are provided.
    Act RulesBills
    Show AI Summary
    Ring fenced treatment of racehorse losses restricts cross setoff and permits carry forward only within the same activity.
    Clause 115 creates a ring fenced regime: losses from the specified activity of owning and maintaining race horses cannot be set off against other income; unabsorbed losses may be carried forward and set off only against income from the same activity, subject to continuation of the activity and defined temporal limits and eligibility definitions.
    Act RulesBills
    Show AI Summary
    Restriction on loss set-off: specified business losses may be offset only against profits of other specified businesses.
    Losses from a specified business are restricted to set-off only against profits of other specified businesses in the same year; unabsorbed losses may be carried forward and set off exclusively against profits of specified businesses in subsequent years. The provision relies on defined terms for "specified business" and "unabsorbed loss," confines tax incentives to their intended category to prevent cross-business erosion of the tax base, and requires segregated record-keeping to ensure compliance.
    Act RulesBills
    Show AI Summary
    Set-off of speculation losses confined to speculation profits; carry forward limited and prioritised before other allowances.
    Clause 113 confines adjustment of losses from a speculation business to profits of another speculation business in the same year; permits carry forward of unabsorbed speculation losses to subsequent years for set off only against speculation business profits within a limited statutory period; requires that unabsorbed speculation losses be set off before certain carried forward allowances; and defines both speculation business (including a deeming rule for share trading to that extent) and specified exceptions to that classification.
    Act RulesBills
    Show AI Summary
    Carry forward and set off of losses preserved for successor co operative banks, subject to specified conditions and penalties.
    Successor co operative banks may set off predecessor accumulated business losses and unabsorbed depreciation in amalgamations as if the amalgamation had not occurred; in demergers directly related tax attributes transfer wholly to the resulting bank while non relatable attributes are apportioned by asset distribution. Application requires continuity of banking business, retention and use of fixed assets, and genuine continuation of operations; failure to meet conditions renders previously allowed set offs taxable in the year of non compliance. Clause 118 adds a Central Government power to prescribe further conditions to ensure genuine business purposes.
    Act RulesBills
    Show AI Summary
    Treatment of accumulated losses and unabsorbed depreciation: successor may utilise predecessor tax attributes subject to a limited carry forward period.
    Clause 117 deems accumulated loss and unabsorbed depreciation of specified predecessor entities to be those of the amalgamated entity when amalgamations involve banking companies, corresponding new banks, or government companies under Central Government sanctioned schemes, including cases following strategic disinvestment; successor entities may utilize these tax attributes in the year of amalgamation but are subject to a limited carry forward period and prescribed compliance and reporting requirements.
    Act RulesBills
    Show AI Summary
    Treatment of accumulated losses and unabsorbed depreciation allows continuity on corporate reorganisations subject to compliance conditions.
    Clause 116 permits continuity of accumulated loss and unabsorbed depreciation on amalgamation, demerger and related reorganisations by deeming the transferor's tax attributes to be those of the transferee or successor, subject to conditions such as asset retention and business continuity. It limits transfers in strategic disinvestment to amounts existing when public sector status ceased, allocates losses in demergers according to transferred undertakings or retained assets, extends treatment to successor entities including LLPs, and empowers the Central Government to prescribe conditions; non compliance attracts tax liabilities for successor entities.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters

      JAO vs. FAO: Reassessment in the Faceless Era: The Continuing Validity of JAO Jurisdiction Pending Supreme Court Adjudication

      9 December, 2025

      Contents
      Acts
      Plus +
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Deciphering Legal Judgments: A Comprehensive Analysis of Judgment

      Reported as:

      2025 (10) TMI 435 - DELHI HIGH COURT

      Introduction

      The controversy at the heart of these proceedings concerns who has the lawful jurisdiction to initiate reassessment proceedings u/s 148 of the Income-tax Act, 1961 ("the Act") in the post-faceless regime: the traditional Jurisdictional Assessing Officer ("JAO") or the Faceless Assessing Officer ("FAO"). The Delhi High Court's decision dated 26 September 2025, followed by the Supreme Court's interim order dated 6 November 2025 in Yukti Export, together form a significant chapter in the evolving jurisprudence surrounding faceless assessment and reassessment, the effect of Special Leave Petition ("SLP") dismissals, and the operation of Article 141 of the Constitution.

      The High Court's ruling reaffirms, within the Delhi territorial jurisdiction, its earlier position in T.K.S. Builders (P.) Ltd. v. ITO (2024 (10) TMI 1586 - 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 or whether the JAO continues to retain independent and concurrent jurisdiction. This is mainly a matter of statutory interpretation (Sections 148 and 151A and related scheme notifications), informed by the nature and architecture of the faceless regime.

      2. Effect of Supreme Court's dismissal of SLPs on the binding force of contrary High Court judgments

      The petitioners argued that Supreme Court's dismissal of SLPs against Bombay and Telangana High Court judgments (which favoured exclusive FAO jurisdiction) operates as a declaration of law under Article 141 and impliedly overrules or renders per incuriam the Delhi High Court's contrary view in T.K.S. Builders. This raises a procedural and constitutional issue: when, and to what extent, does a speaking order dismissing an SLP amount to "law declared" and affect subsisting High Court precedent?

      3. Per incuriam and intra-High Court precedent

      The petitioners contended that T.K.S. Builders is per incuriam because it allegedly disregarded binding Supreme Court law and the statutory command of Section 151A. The issue here concerns whether, in light of subsequent developments and other High Court decisions, a coordinate bench judgment can be treated as per incuriam and therefore not binding.

      4. Impact of Supreme Court's subsequent interim stay in Yukti Export

      The Supreme Court's order in Yukti Export staying the assessment proceedings and tagging the matter with an earlier SLP raises questions about: (i) whether the High Court's position remains operative; (ii) how far such an interim order indicates that the legal question is open; and (iii) the practical consequences for taxpayers and the Revenue pending final adjudication.

      Detailed Issue-wise Analysis

      1. Jurisdiction u/s 148 in the faceless era

      The petitioners relied on a series of High Court decisions-Hexaware Technologies Ltd. (2024 (5) TMI 302 - BOMBAY HIGH COURT), Prakash Pandurang Patil (2025 (8) TMI 1700 - SC Order), Sri Venkataramana Reddy Patloola (2024 (9) TMI 100 - TELANGANA HIGH COURT), Deepanjan Roy (2024 (8) TMI 1598 - TELANGANA HIGH COURT), Jatinder Singh Bhangu (2024 (7) TMI 1191 - PUNJAB AND HARYANA HIGH COURT), Royal Bitumen (2024 (7) TMI 906 - BOMBAY HIGH COURT), Everest Kanto Cylinder (2024 (7) TMI 589 - BOMBAY HIGH COURT), Sundaram Multi Pap (2024 (7) TMI 1192 - BOMBAY HIGH COURT), Venus Jewel (2024 (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/administrative provision (permitting faceless reassessment while not extinguishing pre-existing JAO powers). The Delhi High Court implicitly adopts the latter construction.

      2. Article 141 and the effect of SLP dismissals

      The petitioners' core argument was that dismissal of SLPs against Bombay and Telangana decisions-particularly the order in Prakash Pandurang Patil noting "dismissed on the ground of delay as well as merits"-constitutes a declaration of law binding under Article 141 and therefore negates the Delhi High Court's concurrent-jurisdiction view.

      The High Court rejects this for reasons grounded firmly in Supreme Court precedent:

      • Fuljit Kaur v. State of Punjab, 2010 (6) TMI 687 - Supreme Court: Dismissal of SLP in limine does not affirm the High Court's reasoning nor trigger merger; it only reflects that the case was not considered worthy of examination and does not operate as res judicata or a declaration of law (para 13).
      • State of Orissa v. Dhirendra Sundar Das, 2019 (5) TMI 1949 - Supreme Court: reiterates that in limine SLP dismissal, without detailed reasons, is not a binding precedent under Article 141 (para 14).
      • Kunhayammed v. State of Kerala, 2000 (7) TMI 67 - Supreme Court (LB): exhaustively distinguishes between (i) rejection of SLP (speaking or non-speaking), which does not attract merger, and (ii) orders passed after grant of leave, which do (paras 40-41). It clarifies that even a speaking order rejecting SLP declares law only to the limited extent of what is expressly or by necessary implication decided, but it does not amount to affirmance of the lower court judgment itself.
      • Khoday Distilleries Ltd. v. Mahadeshwara Sahakara Sakkare Karkhane, 2019 (3) TMI 232 - Supreme Court : re-states Kunhayammed and confirms that a speaking SLP rejection may declare law, but still does not effect merger (para 16).

      Applying these principles, the High Court reasons (paras 12, 17) that the Supreme Court's mere recitation that it sees "no reason to interfere" and dismissal "on delay as well as merits" in Prakash Pandurang Patil:

      • does not amount to a detailed or reasoned adjudication of the FAO-JAO jurisdiction issue; and
      • cannot, by necessary implication, be construed as overturning T.K.S. Builders or affirming Hexaware Technologies as binding nationwide precedent.

      Crucially, the Court distinguishes between (i) any statement 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).
      • Nothing in the Supreme Court's SLP orders expressly declares the Delhi view contrary to law or incompatible with Section 151A.

      By emphasising that T.K.S. Builders remains binding until set aside or overruled, the Court implicitly constrains the per incuriam doctrine to its narrow, traditionally accepted field: where a decision neglects a binding statute or a clear Supreme Court ratio. Since no such binding contrary ratio existed, the Court refuses to treat a coordinate bench's view as per incuriam purely because other High Courts or SLP dismissals have taken another view.

      The petitioners' further argument that the Supreme Court's interim order in PC Jeweller (permitting proceedings but directing that adverse orders not be given effect) undermines reliance on T.K.S. Builders is also rejected. The High Court reads that order as only an interim protective arrangement, not as a pronouncement on the correctness of its own precedent.

      4. Supreme Court's subsequent order in Yukti Export

      Following the Delhi High Court's dismissal of the writ petitions, Yukti Export approached the Supreme Court by way of SLP (C) Nos. 31818-31822 of 2025. On 6 November 2025 (2025 (11) TMI 1524 - SC ORDER), the Supreme Court:

      • issued notice;
      • permitted dasti service;
      • stayed the assessment proceedings "in the meantime" until the next date of hearing; and
      • tagged the matter with SLP(C) No. 29723/2025.

      This order is brief and does not articulate reasons. Nevertheless, its implications are noteworthy:

      • The Supreme Court has considered the challenge sufficiently arguable to warrant notice, which implicitly indicates that the legal issue is not treated as foreclosed by earlier SLP dismissals.
      • The stay of assessment proceedings, though interim and case-specific, provides immediate relief to the petitioner and signals judicial caution in allowing reassessments to proceed in circumstances where jurisdiction is under serious challenge.
      • Tagging with another SLP suggests that the Court intends to hear and decide the broader jurisdictional question (and perhaps related challenges to T.K.S. Builders and the Delhi line of authority) in a consolidated manner.

      However, applying the same principles discussed by the Delhi High Court (Kunhayammed, Fuljit Kaur, Khoday Distilleries), this interim order:

      • does not, at this stage, constitute "law declared" 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:

      1. 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).
      2. 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 per incuriam (paras 12-17).
      3. Per incuriam challenge fails: The petitioners' attempt to characterise T.K.S. Builders as per incuriam is rejected; the Court is bound by that coordinate bench decision, especially in the absence of any contrary binding Supreme Court ratio (paras 18-19).
      4. Petitions dismissed: On this basis, the writ petitions assailing JAO-initiated reassessment notices are dismissed (para 20).

      2. Obiter dicta and significant observations

      The judgment also contains important observations, which, though not strictly ratio, are influential:

      • The Court underscores the limited precedential effect of SLP dismissals and stresses that even a speaking order rejecting SLP does not necessarily affirm the High Court judgment (paras 13-17), reinforcing judicial discipline on the use of Article 141.
      • It reiterates that until the Supreme Court grants leave and decides the matter in appeal, the High Court's own precedents remain binding, notwithstanding conflicting decisions of other High Courts.

      The Supreme Court's interim order in Yukti Export does not yet contain a discernible ratio; it is a protective order pending fuller hearing.

      Conclusion

      The Delhi High Court's decision of 26 September 2025 consolidates, within its jurisdiction, a firm stance that both JAO and FAO possess concurrent authority to initiate reassessment u/s 148, notwithstanding a rising body of contrary High Court authority and SLP dismissals. Its careful reliance on Fuljit Kaur, Kunhayammed, Dhirendra Sundar Das and Khoday Distilleries fortifies the doctrinal clarity on the effect of SLP dismissals and resists the temptation to treat cryptic Supreme Court orders as implied overrulings.

      The Supreme Court's subsequent order in Yukti Export, however, indicates that the controversy has reached a critical juncture. By staying the assessment proceedings and tagging the matter with an earlier SLP, the Court has signalled its intention to examine-and possibly harmonise-competing interpretations of the faceless regime and Section 151A. Until a definitive pronouncement is rendered, the Delhi view technically remains operative within its jurisdiction, but is now under active reconsideration at the highest level.

      Practically, this unsettled state of the law implies:

      • Assessees facing JAO-initiated reassessment notices have a credible basis to seek interim protection, especially where the issue is already sub judice before the Supreme Court;
      • The Revenue must anticipate the possibility that reassessments founded solely on JAO action may be invalidated if the Supreme Court ultimately endorses the exclusive FAO jurisdiction line; and
      • Uniform national clarity on the allocation of reassessment powers under the faceless regime is urgently needed to avoid forum shopping, inconsistent outcomes, and administrative uncertainty.

      Future reforms-whether legislative or through detailed CBDT instructions-may also be warranted to explicitly delineate roles of JAO and FAO in reassessment, and to ensure that the statutory text, scheme notifications, and technological architecture are in full harmony with the constitutional demands of certainty, fairness, and non-arbitrariness in tax administration. The forthcoming Supreme Court judgment in the tagged SLPs will be pivotal in setting the interpretive baseline upon which such reforms, and future litigation strategy for both taxpayers and the Revenue, will rest.

       


      Full Text:

      2025 (10) TMI 435 - DELHI HIGH COURT

      Topics

      ActsIncome Tax