Facts of the Case

This batch of writ petitions challenged reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961. Although multiple grounds were raised, the petitioners confined their challenge to the jurisdictional issue, namely whether reassessment notices issued by the Jurisdictional Assessing Officer (JAO) were invalid in light of the Faceless Assessment and Reassessment regime introduced under Sections 144B and 151A of the Act and the Faceless Reassessment Scheme, 2022.

 

Issues Involved

  1. Whether reassessment notices issued by the Jurisdictional Assessing Officer under Section 148 are invalid under the Faceless Reassessment Scheme.
  2. Whether Sections 144B and 151A of the Income Tax Act divest the JAO of jurisdiction to initiate reassessment proceedings.
  3. Whether reassessment proceedings initiated pursuant to Union of India v. Ashish Agarwal comply with the faceless regime.
  4. Whether the statutory framework contemplates concurrent jurisdiction between faceless authorities and the JAO.

 

Petitioner’s Arguments

  • After notification of the Faceless Reassessment Scheme under Section 151A, reassessment proceedings including issuance of notice under Section 148 must mandatorily be conducted through faceless mechanisms.
  • Jurisdictional Assessing Officers stood denuded of authority to issue notices under Section 148.
  • Reliance was placed on judgments of the Bombay, Telangana, Gauhati, and Punjab & Haryana High Courts which had quashed reassessment notices issued by JAOs post-notification of the Scheme.
  • Any reassessment initiated outside the faceless framework defeated the legislative intent of transparency and elimination of personal interface.

 

Respondent’s Arguments

  • The Act does not expressly or impliedly divest the JAO of jurisdiction to issue reassessment notices.
  • Sections 144B and 151A are procedural provisions aimed at efficiency and do not override substantive jurisdiction conferred under Section 148.
  • Cases are selected based on risk management strategy through automated systems, and the JAO acts only after such selection.
  • The statutory scheme envisages concurrent jurisdiction, and reassessment proceedings were validly initiated in accordance with law.

 

Court Order / Findings

  • The Delhi High Court held that Sections 144B and 151A do not oust or extinguish the jurisdiction of the Jurisdictional Assessing Officer.
  • The Faceless Reassessment Scheme was held to be procedural in nature and not a jurisdiction-ousting mechanism.
  • The Court affirmed that the Act contemplates concurrent jurisdiction between faceless assessment units and the JAO.
  • Reassessment notices issued by the JAO pursuant to the procedure laid down in Ashish Agarwal were held to be valid.
  • Contrary views expressed by other High Courts were respectfully disagreed with.

 

Important Clarification

The Court clarified that:

  • The faceless regime is intended to streamline and modernise tax administration, not to invalidate jurisdiction otherwise vested by statute.
  • Issuance of notice under Section 148 by the JAO does not per se violate the faceless framework.
  • Jurisdiction cannot be taken away by implication unless clearly mandated by statute.

 

Final Outcome

All writ petitions, including T.K.S. Builders Pvt. Ltd. v. Income Tax Officer, were dismissed. The Delhi High Court upheld the validity of reassessment notices issued by Jurisdictional Assessing Officers and confirmed that reassessment proceedings may continue in accordance with law.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1770114506_T.K.S.BUILDERSPVT.LTD.VsINCOMETAXOFFICERWARD253NEWDELHI.pdf 

 

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.