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
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
    Act RulesIncome Tax
    Comparison of Section 85 "Capital gains not to be charged on investment in certain bonds." between t...
    Act RulesIncome Tax
    Comparison of Section 84 "Capital gains on compulsory acquisition of lands and buildings not to be c...
    Act RulesIncome Tax
    Comparison of Section 78 "Special provision for full value of consideration in certain cases." betwe...
    Act RulesIncome Tax
    Comparison of Section 74 "Special provision for computation of capital gains in case of depreciable ...
    Act RulesIncome Tax
    Comparison of Section 73 "Cost with reference to certain modes of acquisition" between the Income-Ta...
    Act RulesIncome Tax
    Comparison of Section 72 "Mode of computation of capital gains" between the Income-Tax Act, 2025 (as...
    Act RulesIncome Tax
    Comparison of Section 70 "Transactions not regarded as transfer" between the Income-Tax Act, 2025 (a...
    Act RulesIncome Tax
    Comparison of Section 66 "Interpretation" between the Income-Tax Act, 2025 (as passed) and the Incom...
    Act RulesIncome Tax
    Comparison of Section 62 "Maintenance of books of account" between the Income-Tax Act, 2025 (as pass...
    Act RulesIncome Tax
    Comparison of Section 61 "Special provision for computation of income on presumptive basis in respec...
    Act RulesIncome Tax
    Comparison of Section 58 "Special provision for computing profits and gains of business or professio...
    Act RulesIncome Tax
    Comparison of Section 53 "Full value of consideration for transfer of assets other than capital asse...
    Act RulesIncome Tax
    Comparison of Section 52 "Amortisation of expenditure for telecommunications services, amalgamation,...
    Act RulesIncome Tax
    Comparison of Section 51 "Amortisation of expenditure for prospecting certain minerals" between the ...
    Act RulesIncome Tax
    Comparison of Section 49 "Site Restoration Fund" between the Income-Tax Act, 2025 (as passed) and th...
    Act RulesIncome Tax
    Comparison of Section 48 "Tea development account, coffee development account and rubber development...
    Act RulesIncome Tax
    Comparison of Section 46 "Capital expenditure of specified business" between the Income-Tax Act, 202...
    Act RulesIncome Tax
    Comparison of Section 45 "Expenditure on scientific research" between the Income-Tax Act, 2025 (as p...
    Act RulesIncome Tax
    Comparison of Section 44 "Amortisation of certain preliminary expenses" between the Income-Tax Act, ...
    Act RulesIncome Tax
    Comparison of Section 42 "Capitalising impact of foreign exchange fluctuation" between the Income-Ta...
❯❯
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 RulesIncome Tax
    Show AI Summary
    Roll over relief for capital gains: reinvestment in specified long term bonds defers tax subject to time, holding and cap conditions.
    Relief defers tax on long term capital gains from transfer of land or building when reinvested within six months into notified long term bonds, with a statutory investment ceiling and a five year holding requirement; breach by transfer, conversion to money, or borrowing on the bond triggers deeming of previously exempted amounts as taxable long term capital gains and disallows a specified deduction for amounts claimed under the relief.
    Act RulesIncome Tax
    Show AI Summary
    Capital gains deferral for compulsory acquisition where reinvestment in industrial undertaking preserves tax neutrality subject to deposit and timelines.
    Section 84 conditions tax neutrality for capital gains on compulsory acquisition of industrial land/buildings where the assessee reinvests proceeds in a replacement asset within the prescribed reinvestment period; excess proceeds over new-asset cost are charged as income and certain cost-basis adjustments apply for disposals within the reinvestment period. Unutilised proceeds must be deposited in a specified institution and applied per a notified scheme by the return-filing due date, with documentary proof required and residual unutilised amounts charged as income.
    Act RulesIncome Tax
    Show AI Summary
    Deemed consideration rule: stamp duty value treated as full consideration for capital gains when declared consideration is lower.
    The provision deems the stamp duty value of land or building to be the full value of consideration for section 72 where declared consideration is lower, subject to a date of agreement exception conditioned on prescribed electronic/banking payment modes and a 110% safe harbour allowing actual consideration to prevail when stamp duty value does not exceed 110% of consideration; Assessing Officers may refer valuation claims to a Valuation Officer where the assessee asserts stamp duty value exceeds fair market value and the stamp duty value has not been contested.
    Act RulesIncome Tax
    Show AI Summary
    Deeming of short-term capital gains where transfers from a depreciable block exceed transfer expenses, opening WDV and acquisition cost.
    Section 74 prescribes that when consideration received or accruing in a tax year for transfers of one or more assets in a depreciable block exceeds, after deducting transfer-related expenditure, the opening written-down value of the block and the actual cost of additions during the year, the excess is deemed to be capital gains arising from the transfer of short-term capital assets; if the entire block is transferred in the year, cost of acquisition is the opening WDV plus costs of additions and resulting receipts are similarly deemed short-term capital gains.
    Act RulesIncome Tax
    Show AI Summary
    Deemed cost of acquisition: prior-owner cost continuity and formulaic apportionment govern non purchase transfers and restructurings.
    Section 73 prescribes deemed cost of acquisition rules for assets received by non-purchase modes: generally continuing the previous owner's cost (adjusted for improvements) and prescribing formulaic apportionment or fair market value bases for corporate reorganisations, mutual fund segregations/consolidations and specified instruments, with application guided by cross-references and delegated definitions.
    Act RulesIncome Tax
    Show AI Summary
    Indexation of acquisition costs limited to prescribed computation item, narrowing administrative discretion and clarifying taxpayer application.
    Section 72 prescribes that capital gains equal the full value of consideration less specified deductions (transfer expenditures, cost of acquisition and improvements), with indexation applying in prescribed contexts as indexed equivalents; it excludes certain items from deduction, provides cost adjustments for business trust distributions, grants specified entities additional prescribed deductions, and imposes special currency conversion and rupee appreciation rules for non residents, while defining indexed cost calculations by reference to a Cost Inflation Index.
    Act RulesIncome Tax
    Show AI Summary
    Tax-neutrality for corporate reorganisations, IFSC fund relocations, non-resident transfers and conversions subject to specified conditions.
    Section 70 treats specified transfers as not constituting a transfer for capital gains, rendering many corporate reorganisations, succession transfers, conversions, certain non-resident-to-non-resident transactions and relocations of foreign funds into IFSC-located resultant funds tax-neutral only where qualifying tests - including shareholding continuity, residency/domestic-company status, regulatory registration and non-taxation in the foreign jurisdiction - and documentary conditions are satisfied.
    Act RulesIncome Tax
    Show AI Summary
    Specified derivative transaction criteria change tax classification and impose documentary and platform compliance obligations for derivative trades.
    The enacted Section 66 narrows and reorders interpretive definitions governing Chapter IV D, alters key terms (including shifting focus from "commodity derivative" to "commodities transaction tax"), moves some enterprise classifications to notification based criteria, and changes successor/predecessor coverage. It also revises the functional tests and documentary preconditions for specified derivative transaction and speculative transaction status - emphasising electronic execution, prescribed platforms/intermediaries and time stamped contract notes with UCI and PAN - thereby creating clear compliance triggers and greater reliance on delegated notifications and rules.
    Act RulesIncome Tax
    Show AI Summary
    Maintenance of books of account: record keeping duty for specified professions and businesses; Board to prescribe particulars and retention.
    Section 62 requires maintenance of books and documents to enable computation of total income by specified professions, businesses meeting alternative income or turnover tests, and professions notified by the Board. The Board may prescribe the form, particulars, manner, place and retention periods. The enacted text repositions the Board's notification power into the definition of specified professions, corrects an apparent turnover threshold error for individuals/HUFs, and revises cross references affecting deemed profits carve outs; operational details depend on subsequent rules and the referenced tables.
    Act RulesIncome Tax
    Show AI Summary
    Presumptive taxation for non resident activities fixes taxable profits on defined receipts and narrows audit relief.
    Section 61 prescribes a presumptive taxation method for six specified non resident activities, fixing taxable profits as percentages of defined receipts (A and B) and supplying definitions and examples for those receipts; it bars deductions or losses against income so computed, prescribes written down value treatment, and permits audit based claims of lower actual profits only where expressly allowed and subject to strict bookkeeping and audit compliance, while the Act narrows those reliefs and clarifies definitional and non application provisions.
    Act RulesIncome Tax
    Show AI Summary
    Presumptive taxation regime clarified for small businesses and goods carriage operators, altering computation and compliance timing.
    Section 58 creates a presumptive taxation regime for small businesses, goods carriage operations and specified professions, prescribing turnover limits and fixed presumptive computation methods. Taxpayers may elect actual profits but must maintain books and obtain an audit if total income exceeds the basic exemption limit. The enacted text clarifies that receipts received by specified banking or online modes count for a lower percentage only if received during the tax year or before the due date, treats non account payee cheques/bank drafts as cash for cash tests, and expressly excludes goods carriage receipts from aggregation for monetary limits under book keeping/audit rules.
    Act RulesIncome Tax
    Show AI Summary
    Deemed consideration: stamp duty value may be treated as full value where declared consideration is lower.
    The provision deems the stamp duty value to be the full value of consideration for transfers of non-capital land or buildings where declared consideration is below stamp duty value, subject to a statutory tolerance that preserves actual consideration if stamp duty value is within a specified margin; agreement date stamp valuations may be used when agreement and registration dates differ provided consideration (or part) was received by specified banking/online modes on or before the agreement date, with determination mechanics governed by cross referenced valuation rules.
    Act RulesIncome Tax
    Show AI Summary
    Amortisation rules for telecom spectrum and licence fees require time spread deductions and proceeds offset on transfer.
    The section prescribes amortisation in equal instalments for four categories of expenditure-amalgamation/demerger costs, SVR payments, spectrum fees and licence fees-starting from specified initial tax years (event/payment or later of business commencement/payment) and, for spectrum/licence, running co terminous with the life of the right. Transfers of spectrum/licence rights trigger offsetting of proceeds against remaining unallowed expenditure with specified income inclusion rules and a formula for part transfers; amalgamation/demerger transfers to an Indian company preserve the section's application to the successor. Depreciation exclusion and reassessment mechanics for wrongful allowance are also provided.
    Act RulesIncome Tax
    Show AI Summary
    Amortisation of prospecting expenditure permits staged tax deduction subject to funding reductions, exclusions and audit conditions.
    Amortisation allows an Indian company or resident (other than a company) engaged in prospecting for specified minerals to capitalise qualifying expenditure incurred in the year of commercial production and up to four preceding years, claim periodic instalments after reducing amounts funded by others and realizations (sale, salvage, compensation, insurance), and excluding site/deposit acquisitions and depreciable capital assets; instalments are limited so as not to reduce income from commercial exploitation below nil, unallowed amounts may be carried forward within the overall amortisation period, and audit and prescribed reporting are required for non-company assessees.
    Act RulesIncome Tax
    Show AI Summary
    Site restoration fund deductions for petroleum operations, with recapture on asset disposals governed by Schedule X.
    Section 49 creates a Site Restoration Fund regime for petroleum and natural gas operations under a Central Government agreement, allowing deductions for deposits to a designated special account or site restoration account with computation governed by Schedule X. Withdrawals or transfers from those accounts are taxable in the year of withdrawal/transfer under Schedule X. The Act removes a clause in the Bill that explicitly deemed a portion of asset cost relatable to prior deductions as business income on sale within a specified holding period, instead delegating disposal and recapture rules to Schedule X.
    Act RulesIncome Tax
    Show AI Summary
    Recapture on premature disposal reverses deduction for deposits into designated tea, coffee and rubber development accounts, taxing attributable cost on disposal.
    Clause 48 permits a deduction for deposits into designated tea, coffee and rubber development accounts, with computation governed by Schedule IX; withdrawals or transfers are chargeable to tax in the year of transfer/withdrawal as per Schedule IX, and disposal of assets acquired under the scheme within the protective holding period results in deeming that portion of the asset cost attributable to earlier deductions as business income in the year of sale or transfer.
    Act RulesIncome Tax
    Show AI Summary
    Immediate deduction of capital expenditure for specified businesses, subject to conditions, approvals and an eight-year recapture rule.
    The Act permits an elective immediate deduction of whole capital expenditure incurred wholly and exclusively for specified businesses in the year of incurrence (or in year of commencement if pre-commencement cost is capitalised), subject to specified commencement dates, definitions and conditions. The deduction is disallowed where a business is formed by splitting/reconstruction or by transfer of previously used machinery (except a limited de minimis exception), requires specified approvals/notifications for certain sectors, excludes land/goodwill/financial instruments and cash over prescribed limits, and is subject to an eight-year sole-use recapture mechanism with depreciation adjustment.
    Act RulesIncome Tax
    Show AI Summary
    Scientific research deductions conditional on prescribed authority certification, approval for in-house R&D, and prohibition on duplicate claims.
    The provision allows deductions for capital and revenue expenditure on business-related scientific research, excluding land costs, and deems qualifying pre-commencement salaries, materials and capital costs to the year of commencement if certified by the prescribed authority. In-house R&D deductions are available for prescribed companies with approved facilities and qualifying costs subject to prescribed conditions and documentation. Payments to approved research entities are deductible only for approved programmes and recipients. Non-duplication rules bar claiming the same expenditure under other provisions and exclude parallel asset-based deductions where research deductions have been taken.
    Act RulesIncome Tax
    Show AI Summary
    Amortisation of preliminary expenses allows spreading eligible start-up costs over successive years subject to statutory cap and compliance conditions.
    The provision permits amortisation of specified preliminary and project-related expenditures by resident Indian assessees through equal annual deductions over five successive tax years beginning with the year the undertaking becomes operational or the year of commencement. Eligible items include feasibility and project reports, market surveys, engineering services, specified legal and registration costs, prospectus and public issue expenses for companies, and other prescribed items not deductible under any other provision. A statutory cap restricts the allowable deduction to a percentage of project cost or capital employed, with project cost tied to actual cost as shown in the books, and procedural conditions require prescribed filings and audited accounts for certain taxpayers.
    Act RulesIncome Tax
    Show AI Summary
    Capitalising foreign exchange fluctuation adjusts asset cost to reflect exchange-rate differences between acquisition and payment.
    Section 42 requires capitalisation of foreign exchange variation by computing A = B - C, where B is INR paid during the tax year (excluding parts met by others) for asset cost or repayment of foreign-currency borrowings used to acquire the asset, and C is the INR liability corresponding to that payment at acquisition; the variation is added to or deducted from the asset's actual cost, specified capital expenditure categories, or cost of acquisition for set-off purposes, with forward-contract-covered amounts computed at the contract rate.

    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