In a significant ruling, the Delhi High Court has once again clarified that both the Jurisdictional Assessing Officer (JAO) and the Faceless Assessing Officer (FAO) have the power to initiate reassessment proceedings under Section 148 of the Income-tax Act, 1961. This decision came in the case of Yukti Export vs. Income-tax Officer (2025), where the Court dismissed multiple writ petitions challenging reassessment notices issued by JAOs.
Several taxpayers argued that reassessment notices under Section 148 should be issued only by the Faceless Assessing Officer (FAO), relying on various High Court rulings – especially from Bombay, Telangana and Punjab & Haryana – which had taken that view. They also claimed that since the Supreme Court had dismissed certain SLPs arising from those High Court decisions, the law was now settled in favour of FAO-only jurisdiction.
The Delhi High Court rejected these arguments and upheld the view already settled in its earlier judgment T.K.S. Builders Pvt. Ltd. v. ITO (2024).
Concurrent Jurisdiction of JAO and FAO
The Court reaffirmed that
• Both the JAO and FAO have concurrent powers to issue notices under Section 148.
• This position has been consistently followed by various benches of the Delhi High Court
- No Stay on T.K.S. Builders Judgment
Though T.K.S. Builders is under challenge before the Supreme Court, there is no stay, so it continues to bind all authorities in Delhi.
Dismissal of SLP by Supreme Court Does NOT Mean Affirmation
The Court clarified an important legal point:
• When the Supreme Court dismisses an SLP without detailed reasoning, it does not amount to affirmation of the High Court’s ruling.
• Such dismissal does not constitute a declaration of law under Article 141 of the Constitution.
- Bombay High Court Judgments Do Not Override Delhi HC
Since the Supreme Court has not decided the issue on merits, the Delhi High Court is free to follow its own precedent.
What This Means for Taxpayers
• In Delhi jurisdiction, reassessment proceedings may be lawfully initiated by either:
◦ the Jurisdictional AO (JAO), or
◦ the Faceless AO (FAO).
• Taxpayers cannot challenge Section 148 notices solely on the ground that they were issued by a JAO instead of FAO.
• Litigation relying on contrary Bombay or Telangana High Court decisions may not succeed in Delhi.
In view of the above discussion, the Yukti Export ruling strengthens the legal position already laid down in T.K.S. Builders making it clear that both JAO and FAO hold concurrent jurisdiction for issuing Section 148 notices in Delhi. Until the Supreme Court finally decides the issue, taxpayers in Delhi must treat notices issued by either authority as valid.
A recurring legal dispute in recent years relates to who has the authority to issue a notice under Section 148 of the Income-tax Act, 1961 – particularly after the introduction of the Faceless Assessment Scheme and Section 151A. Several High Courts, especially Bombay, have taken the view that only the Faceless Assessing Officer (FAO) has the power to initiate reassessment.However, the Delhi High Court has consistently taken a different view, reaffirming its stand in the recent case Yukti Export vs. ITO (2025) that both the Jurisdictional Assessing Officer (JAO) and the Faceless Assessing Officer (FAO) have concurrent jurisdiction to issue notices under Section 148.
This detailed analysis explains the judgment, arguments made, and its implications for taxpayers.
Background of the Litigation :The petitioners challenged the reassessment notices issued to them by Jurisdictional Assessing Officers (JAOs). Their primary contention was – Only the FAO has the authority to issue notices under Section 148, and JAO-issued notices are without jurisdiction. They relied heavily on:
-Hexaware Technologies Ltd. v. ACIT (Bombay HC)
-Prakash Pandurang Patil v. ITO (Bombay HC)
-Sri Venkataramana Reddy Patloola v. DCIT (Telangana HC)
-Jatinder Singh Bhangu v. UOI (P&H HC) and other similar judgments.
The petitioners also argued that the Supreme Court dismissed some Special Leave Petitions (SLPs) challenging these High Court orders, and therefore those rulings have now attained finality. The petitioners argued that Section 151A introduced faceless reassessments and therefore all Section 148 notices must be issued only by FAO. They claimed the JAO has no power left after the faceless scheme. They cited several cases from Bombay, Telangana, and Punjab & Haryana High Courts which held thatonly FAO can issue Section 148 notices post the faceless scheme.
The petitioners argued that since the Supreme Court dismissed SLPs in Deepanjan Roy and Prakash Pandurang Patil,these High Court judgments now stand “affirmed,” and therefore, Delhi HC’s earlier ruling (T.K.S. Builders) is no longer correct.They particularly highlighted that the Supreme Court dismissed one SLP “on delay as well as merits”, implying a positive affirmation of FAO-only jurisdiction.
Delhi HC judgment “per incuriam”
The petitioners claimed that the Delhi HC judgment in T.K.S. Builders did not consider Section 151A properly, therefore, it is per incuriam and not binding.
Revenue’s Counter-Arguments : The Department argued that Delhi High Court already settled the issue in T.K.S. Builders (2024) and subsequent cases, the Delhi HC clearly held Both JAO and FAO have concurrent jurisdiction. There is no stay on this judgment by the Supreme Court. Further, dismissal of SLPs does not create law. The Department relied on several Supreme Court decisions:
-Fuljit Kaur (2010)
-Dhirendra Sundar Das (2019)
-Kunhayammed (2000)
-Khoday Distilleries (2019)
These cases establish that dfismissal of an SLP without a detailed speaking order does NOT amount to affirmation of the High Court judgment, and does NOT constitute a declaration of law under Article 141. Further Bombay HC decisions do not bind Delhi HC. Different High Courts may take different views. Delhi HC is bound only by its own precedents unless Supreme Court settles the issue with a reasoned order.
Court’s Analysis and Findings :The Delhi High Court carefully evaluated the legal position and made the observations:
-Its earlier judgment in T.K.S. Builders still holds the field.
-It has not been overturned by the Supreme Court.
-It is binding on all authorities and benches within Delhi.
-in Delhi, both JAO and FAO can issue Section 148 notices.
The Court noted that several recent cases also followed T.K.S. Builders, including:
- PC Jeweller Ltd.
-Mala Petrochemicals & Polymers
-Mehak Jagga
-All India Kataria Education Society
-Empire Fasteners
All these judgments dismissed similar petitions.
SLP Dismissal Does NOT Affirm High Court Judgment : This is the most critical part. The Court explained that a dismissal of SLP without detailed reasons is “in limine.” It does not amount toaffirmation of the High Court judgment, declaration of law under Article 141, or merger of orders. Even if the Supreme Court notes “dismissed on merits,” it applies only to the SLP stage, not the issue itself.
The issue is still pending before the Supreme Court : The Court noted that the SLP against T.K.S. Builders itself is pending.Therefore, the issue is yet to be conclusively settled by the Supreme Court.
Final Ruling : The Delhi High Court dismissed all writ petitions and held
-Both the Jurisdictional AO (JAO) and the Faceless AO (FAO) have concurrent jurisdiction to issue reassessment notices under Section 148.
-T.K.S. Builders continues to be the binding law in Delhi.
-SLP dismissals do not amount to Supreme Court confirmation of contrary High Court views.
Practical Implications for Taxpayers
-Notices issued by JAO are valid in Delhi
-Taxpayers cannot challenge Section 148 notices only on the ground that they were not issued by FAO.
-Avoid filing petitions in Delhi HC on this ground
-Several such petitions have already been dismissed.
Nationwide confusion continues :Until the Supreme Court gives a detailed ruling, jurisdiction will differ State by State.
-Different High Courts have taken different positions:
-Delhi HC: JAO + FAO (concurrent)
-Bombay HC: FAO only
-Telangana HC: FAO only
Taxpayers must watch for the upcoming Supreme Court judgment. The final word will come only when the Supreme Court decides the SLP in T.K.S. Builders or the jurisdictional conflict across HCs. The Yukti Export judgment reinforces the Delhi High Court’s clear position that both JAO and FAO have concurrent authority to issue notices under Section 148. SLP dismissals without reason do not overturn Delhi HC’s stance. Therefore, until the Supreme Court issues a reasoned decision, this remains the binding legal position in Delhi.
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