Delhi HC Reaffirms Concurrent Powers of JAO and FAO to Issue S.148 Reassessment Notices [Read Order]

The Delhi High Court has reaffirmed that both the Jurisdictional Assessing Officer (JAO) and the Faceless Assessing Officer (FAO) possess concurrent powers to issue reassessment notices under Section 148 of the Income Tax Act, 1961, while dismissing a batch of petitions challenging the validity of notices issued outside the faceless reassessment framework.

The petitions were filed by Inder Dev Gupta, All India Kataria Educational Society and Sumanglam Sewa Aivam Education Samiti. The dispute arose after the petitioners received notices under Section 148 of the Income Tax Act, 1961 from the JAO reopening their assessments over alleged income escaping assessment.

The case arose from the petitioners’ contention that, following the insertion of Section 151A by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2022, only the FAO functioning under the National Faceless Assessment Centre could issue such notices. The challenge before the High Court centered on the alleged lack of jurisdiction of the JAO to issue the notices.

The petitioners, represented by a counsel of representatives, submitted that the statutory mandate under Section 151A divests the JAO of the authority to issue reassessment notices. They asserted that several judgments by High Courts have held that only the FAO has jurisdiction under Section 148. Further, contended that the precedent in TKS Builders (2024), which recognised concurrent jurisdiction of both authorities, was inconsistent with the statutory scheme established under Section 151A and should be read down.

The respondents, represented by a counsel of representatives, argued that theCourt has consistently held that both the JAO and the FAO possess concurrent jurisdiction to issue notices under Section 148 of the Income Tax Act, 1961.

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The Bench consisting of Justice V. Kameswar Rao and Justice Vinod Kumar rejected the petitions. The Court held that its earlier ruling in TKS Builders (2024) continues to govern the jurisdictional issue and that both the JAO and the FAO possess concurrent authority to issue reassessment notices under Section 148. The Court also noted that Special Leave Petitions challenging TKS Builders are still pending before the Supreme Court and that there is no stay on the operation of the said judgment.

As TKS Builders remains operative and binding within the territorial jurisdiction of the Delhi High Court, the petitions seeking to invalidate reassessment notices issued by the JAO could not be sustained. Therefore, the Court dismissed all the petitions and declared the connected applications infructuous.

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