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DGL DIST GOVT TEACHERS CO-OPERATIVE SOCIETY LIMITED,DINDIGUL vs THE INCOME TAX OFFICER, DINDIGUL | BharatTax

DGL DIST GOVT TEACHERS CO-OPERATIVE SOCIETY LIMITED,DINDIGUL vs. THE INCOME TAX OFFICER, DINDIGUL

ITA 3341/CHNY/2025Status: DisposedITAT Chennai27 January 2026AY 2019-2018 pages

AI SummaryAllowed

Facts

The assessee challenged the jurisdiction of the Jurisdictional Assessing Officer (JAO) to issue a notice under Section 148 of the Income Tax Act, 1961. The assessee contended that as per the e-assessment scheme notified by the CBDT, such notices must be issued by the Faceless Assessing Officer (FAO). The revenue argued that the JAO had the jurisdiction.

Held

The Tribunal noted that a CBDT Notification dated 29.03.2022 formulated the e-assessment scheme, which mandates automated allocation and issuance of notices under Section 148 in a faceless manner. Multiple High Court judgments have affirmed that only the FAO has the jurisdiction to issue such notices. The Tribunal followed the jurisdictional High Court's decision in TVS Credit Services Ltd. v. DCIT, which held that notices issued by JAO are invalid.

Key Issues

Whether the Jurisdictional Assessing Officer (JAO) has the jurisdiction to issue a notice under Section 148 of the Income Tax Act, 1961, or if it is mandatory for the Faceless Assessing Officer (FAO) to issue such notices as per the e-assessment scheme.

Sections Cited

148, 147, 144B, 151A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, B BENCH: CHENNAI

Before: MS. PADMAVATHY S & SHRI MANU KUMAR GIRI

Hearing: 21.01.2026Pronounced: 27.01.2026

आदेश / O R D E R

PER MANU KUMAR GIRI, JM:

1.

1. The captioned appeal by the assessee is arising out of the order of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi dated 18.07.2025 for AY 2019-20.

(AY 2019-20) DGL Dist Govt Teachers Cooperative S Ltd Vs ITO :: 2 ::

2. Registry has noted delay of 50 days in filing appeal. Having perused the reasons given in affidavit, we condone the delay and admit the appeal for adjudication.

2.1 At the outset, we notice that the Assessee challenges (G.No.1) the JAO jurisdiction to issue notice u/s148 31.03.2023 of the Act.

3. We note that Page No.2 of the assessment order which talks of notice u/s.148 of the Act dated 31.03.2023 and pointed out that the notice u/s.148 has been issued by the Income Tax Officer, i.e; (JAO). He further referred to CBDT Notification dated 29.03.2022 which formulated a Scheme called “the e-assessment of income assessment scheme, 2022”.

4. The Ld.DR relied upon the impugned order and further, pleaded that CBDT Notification dated 29.03.2022 is not applicable in the present case. He further relied upon para 8 of the order the Hon’ble jurisdictional High Court in the case of TVS Credit Services Ltd. v.

DCIT in WP No.22402 of 2024 & WMP No.13336 of 2023 which is as under:

8. Keeping open all rights and contentions of parties, including liberty to apply to this Court, in case the Revenue succeeds before the Apex Court, for revival of these petitions, the notices issued in these petitions are quashed and set aside.

(AY 2019-20) DGL Dist Govt Teachers Cooperative S Ltd Vs ITO :: 3 ::

(i) Where an appeal or revision is provided against an order passed by a court, tribunal or any other authority before superior forum and such superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the subordinate forum merges in the decision by the superior forum and it is the latter which subsists, remains operative and is capable of enforcement in the eye of law. (ii) The jurisdiction conferred by Article 136 of the Constitution is divisible into two stages. The first stage is upto the disposal of prayer for special leave to file an appeal. The second stage commences if and when the leave to appeal (AY 2019-20) DGL Dist Govt Teachers Cooperative S Ltd Vs ITO is granted and the special leave petition is converted into an appeal. (iii) The doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or capable of being laid shall be determinative of the applicability of merger. The superior jurisdiction should be capable of reversing, modifying or affirming the order put in issue before it. Under Article 136 of the Constitution the Supreme Court may reverse, modify or affirm the judgment-decree or order appealed against while exercising its appellate jurisdiction and not while exercising the discretionary jurisdiction disposing of petition for special leave to appeal. The doctrine of merger can therefore be applied to the former and not to the latter. (iv) An order refusing special leave to appeal may be a non-speaking order or a speaking one. In either case it does not attract the doctrine of merger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed. (v) If the order refusing leave to appeal is a speaking order, i.e., gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting the special leave petition or that the order of the Supreme Court is the only order binding as res judicata in subsequent proceedings between the parties. (vi) Once leave to appeal has been granted and appellate jurisdiction of Supreme Court has been invoked the order passed in appeal would attract the doctrine of merger; the order may be of reversal, modification or merely affirmation.

13. In Fuljit Kaur vs. State of Punjab and Others, (2010) 11 SCC 455, the Supreme Court in paragraph 7 has held as under:- “7. There is no dispute to the settled proposition of law that dismissal of the special leave petition in limine by this Court (AY 2019-20) DGL Dist Govt Teachers Cooperative S Ltd Vs ITO does not mean that the reasoning of the judgment of the High Court against which the special leave petition has been filed before this Court stands affirmed or the judgment and order impugned merges with such order of this Court on dismissal of the petition. It simply means that this Court did not consider the case worth examining for the reason, which may be other than merit of the case. Nor such an order of this Court operates as res judicata. An order rejecting the special leave petition at the threshold without detailed reasons therefore does not constitute any declaration of law or a binding precedent.” (Emphasis supplied) 14. In this regard, we may refer to the judgment of the Supreme Court in State of Orissa and Another vs. Dhirendra Sundar Das and Others, (2019) 6 SCC 270, wherein it was observed as under:- “9.27. It is a well-settled principle of law emerging from a catena of decisions of this Court, including Supreme Court Employees’ Welfare Assn. V. Union of India [Supreme Court Employees’ Welfare Assn. V. Union of India, (1989) 4 SCC 187, paras 22 and 23 : 1989 SCC (L&S) 569] and State of Punjab v. Davinder Pal Singh Bhullar [State of Punjab v. Davinder Pal Singh Bhullar, (2011) 14 SCC 770, paras 112 and 113 : (2012) 4 SCC (Civ) 1034 : (2012) 4 SCC (Cri) 496 : (2014) 1 SCC (L&S) 208] , that the dismissal of an SLP in limine simply implies that the case before this Court was not considered W.P. (C) 15024/2024 & connected matters Page 8 of 13 worthy of examination for a reason, which may be other than the merits of the case. Such in limine dismissal at the threshold without giving any detailed reasons, does not constitute any declaration of law or a binding precedent under Article 141 of the Constitution.”(Emphasis supplied) 15. Even in the judgment in Kunhayammed and Others (Supra) relied upon by Mr. Chaudhuri, the Supreme Court has observed as under:- 40. A petition seeking grant of special leave to appeal may be rejected for several reasons. For example, it may be rejected (i) as barred by time, or (ii) being a defective presentation, (iii) the petitioner having no locus standi to file the petition, (iv) the conduct of the petitioner disentitling him to any indulgence by the court, (iv) the question raised by the petitioner for consideration by this Court being not fit for consideration or deserving being dealt with by the Apex Court of the country and so on. The expression often (AY 2019-20) DGL Dist Govt Teachers Cooperative S Ltd Vs ITO employed by this Court while disposing of such petitions are — “heard and dismissed”, “dismissed”, “dismissed as barred by time” and so on. May be that at the admission stage itself the opposite party appears on caveat or on notice and offers contest to the maintainability of the petition. The Court may apply its mind to the merit worthiness of the petitioner's prayer seeking leave to file an appeal and having formed an opinion may say “dismissed on merits”. Such an order may be passed even ex parte, that is, in the absence of the opposite party. In any case, the dismissal would remain a dismissal by a non-speaking order where no reasons have been assigned and no law has been declared by the Supreme Court. The dismissal is not of the appeal but of the special leave petition. Even if the merits have been gone into, they are the merits of the special leave petition only. In our opinion neither doctrine of merger nor Article 141 of the Constitution is attracted to such an order. Grounds entitling exercise of review jurisdiction conferred by Order 47 Rule 1 CPC or any other statutory provision or allowing review of an order passed in exercise of writ or supervisory jurisdiction of the High Court (where also the principles underlying or emerging from Order 47 Rule 1 CPC act as guidelines) are not necessarily the same on which this Court exercises discretion to grant or not to grant special leave to appeal while disposing of a petition for the purpose. Mere rejection of a special leave petition does not take away the jurisdiction of the court, tribunal or forum whose order forms the subject-matter of petition for special leave to review its own order if grounds for exercise of review jurisdiction are shown to exist. Where the order rejecting an SLP is a speaking order, that is, where reasons have been assigned by this Court for rejecting the petition for special leave and are stated in the order still the order remains the one rejecting prayer for the grant of leave to appeal. The petitioner has been turned away at the threshold without having been allowed to enter in the appellate jurisdiction of this Court. Here also the doctrine of merger would not apply. But the law stated or declared by this Court in its order shall attract applicability of Article 141 of the Constitution. The reasons assigned by this Court in its order expressing its adjudication (expressly or by necessary implication) on point of fact or law shall take away the jurisdiction of any other court, tribunal or authority to express any opinion in conflict with or in departure from the view taken by this Court because permitting to do so would be subversive of judicial discipline and an affront to the (AY 2019-20) DGL Dist Govt Teachers Cooperative S Ltd Vs ITO order of this Court. However this would be so not by reference to the doctrine of merger.

43.

We may look at the issue from another angle. The Supreme Court cannot and does not reverse or modify the decree or order appealed against while deciding a petition for special leave to appeal. What is impugned before the Supreme Court can be reversed or modified only after granting leave to appeal and then assuming appellate jurisdiction over it. If the order impugned before the Supreme Court cannot be reversed or modified at the SLP stage obviously that order cannot also be affirmed at the SLP stage.” (Emphasis supplied) 16. Further, in Khoday Distilleries Ltd. & Others vs. Sri Mahadeshwara Sahakara Sakkare Karkhane Limited, Kollegal, (2019) 4 SCC 376, the Supreme Court held as under:- “26.2. We reiterate the conclusions relevant for these cases as under: (Kunhayammed case, SCC p. 384) “(iv) An order refusing special leave to appeal may be a non-speaking order or a speaking one. In either case it does not attract the doctrine of merger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not (AY 2019-20) DGL Dist Govt Teachers Cooperative S Ltd Vs ITO inclined to exercise its discretion so as to allow the appeal being filed. (v) If the order refusing leave to appeal is a speaking order i.e. gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting the special leave petition or that the order of the Supreme Court is the only order binding as res judicata in subsequent proceedings between the parties. (vi) Once leave to appeal has been granted and appellate jurisdiction of the Supreme Court has been invoked the order passed in appeal would attract the doctrine of merger; the order may be of reversal, modification or merely affirmation. (vii) On an appeal having been preferred or a petition seeking leave to appeal having been converted into an appeal before the Supreme Court the jurisdiction of the High Court to entertain a review petition is lost thereafter as provided by sub-rule (1) of Order 47 Rule 1 CPC.”