Synokem Pharmaceuticals Ltd Vs ACIT (Delhi High Court)
The Delhi High Court considered an application filed by the petitioner in the context of proceedings concerning reassessment under the Income Tax Act, 1961. The petitioner’s counsel submitted that a batch of appeals filed by both assessees and the Union of India (UOI) had been heard by the Supreme Court and, by order dated 10.04.2026, the matters were remanded to the High Courts to consider the effect of the amendment to Section 147A introduced by Act No. 4 of 2026.
The respondent opposed the application. Learned Senior Standing Counsel submitted that the application was liable to be rejected because the Delhi High Court had already held in T.K.S. Builder Pvt. Ltd. vs. Income Tax Officer, New Delhi (2024) DHC 8330 DB that, following insertion of Section 151A of the Income Tax Act, the Faceless Assessing Officer (FAO) and Jurisdictional Assessing Officer (JAO) possessed concurrent jurisdiction and that a notice under Section 148 could be issued by either officer.
The respondent further pointed out that the writ petitions filed by the assessees had been decided against them by the Delhi High Court and that appeals against those judgments were pending before the Supreme Court. According to the respondent, paragraphs 22 and 23 of the Supreme Court’s order dated 10.04.2026 showed that only those orders in appeals filed by the department where the High Court had ruled in favour of the assessee had been set aside, while the assessees were given liberty to examine the retrospectivity of the amendment to Section 147A.
The High Court considered the submissions and the Supreme Court’s order. It observed that the Finance Act, 2026, through Act No. 4 of 2026, amended Section 147A to provide that the FAO and JAO have concurrent jurisdiction. The Court stated that this was precisely what had been held in its judgment in K.S. Builder Pvt. Ltd. (supra).
The Court noted that several other High Courts had taken a divergent view, holding that notices under Section 148 could be issued only by the NFAC. The Revenue had challenged those judgments before the Supreme Court, contending that both the FAO and JAO had jurisdiction to initiate proceedings under Section 148.
Before the Supreme Court could decide the issue, the legislative amendment was introduced. While dealing with the connected appeals on 10.04.2026, the Supreme Court observed that the High Courts had primarily quashed reassessment notices on the ground that JAOs lacked competence to initiate the proceedings, but that the foundation of that view had been altered by the amending legislation. The Supreme Court therefore set aside the judgments in favour of the assessees on that limited ground and remitted the matters to the respective High Courts for fresh consideration. The assessees were granted liberty to amend their writ petitions to challenge Section 147A as introduced by Act No. 4 of 2026 or any connected or consequential provision. The Supreme Court also directed that, during the pendency of the writ petitions before the High Courts, further assessment or reassessment proceedings pursuant to the impugned notices would remain stayed, subject to conditions imposed by the respective High Courts.
The Delhi High Court held that paragraph 22 of the Supreme Court’s order made it clear that the appeals filed by the UOI were allowed only to the limited extent of setting aside the High Court judgments because of the subsequent legislative amendment to Section 147A. The assessees retained liberty to amend their writ petitions before the respective High Courts to challenge the retrospectivity or otherwise of the amendment introduced by Act No. 4 of 2026.
In the present petition, the High Court noted that the writ petition had already been dismissed by the Court and observed that whatever remained to be argued had been affected by the introduction of the amendment. The Court consequently held that the petitioner’s application was misconceived and rejected the application.
Cases Discussed
- T.K.S. Builder Pvt. Ltd. vs. Income Tax Officer, New Delhi (Delhi High Court), (2024) DHC 8330 DB
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
The matter comes up for consideration of an application moved by the petitioner, qua which learned counsel for the petitioner contended that the batch of appeals filed both by the assessees and by the Union of India (hereinafter referred to as ‘UOI’) were heard by Hon’ble the Supreme Court and vide order dated 10.04.2026, the matter has been remanded with a direction to this Court to consider the effect of the amendment in Section 147A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’) which has been introduced by the Act No. 4 of 2026.
2. Mr. Puneet Rai, learned Senior Standing Counsel for the respondent, on the other hand, submitted that the application moved by the petitioner is liable to be rejected, inasmuch as, Delhi High Court vide judgment in T.K.S. Builder Pvt. Ltd. vs. Income Tax Officer, New Delhi (2024) DHC 8330 DB, has already held that after introduction of Section 151A in Act of 1961, the Faceless Assessing Officer (hereinafter referred to as ‘FAO’) and the Jurisdictional Assessing Officer (hereinafter referred to as ‘JAO’) both had the concurrent jurisdiction and notice under Section 148 of the Act of 1961 can be issued by either of these two officers.
3. He emphasised that this is a matter of fact that the writ petitions filed by the assessees were decided against them by the Delhi High Court and that the assessees’ appeals against the judgment(s) of Delhi High Court were pending before Hon’ble the Supreme Court.
4. He further submitted that, a perusal of paragraph no. 22 and 23 of the order dated 10.04.2026 clearly reveals that only the orders in appeals filed by the department in which the High Court had held in favour of the assessee, have been set aside while granting the liberty to the assessees to examine the retrospectivity of the amendment introduced under Section 147A of the Act.
5. Heard learned counsel for the parties and perused the order dated 10.04.2026 passed by Hon’ble the Supreme Court.
6. It does not need much deliberation that what has been introduced by the Finance Act, 2026 (No. 4 of 2026), by way of amendment to Section 147A is, that the FAO and the JAO both have concurrent jurisdiction. And that is precisely what has been held by this Court vide its judgment rendered in the case of K.S. Builder Pvt. Ltd. (supra).
7. True it is, many other High Courts had taken a divergent view and held that notice under Section 148 could have been issued only by NFAC. Challenging such judgments of different High Courts, the revenue had preferred SLPs/appeals before Hon’ble the Supreme Court contending that both the FAO and JAO hold the jurisdiction to initiate proceedings under Section 148 of the Act of 1961.
8. Before Hon’ble the Apex Court could decide the issue the Act no. 4 of 2026 brought in an amendment and Hon’ble the Supreme Court while considering the batch of connected appeals (both by the assessees and Revenue) was apprised of the said amendment and Hon’ble the Supreme Court disposed of assessees appeals, as can be discerned from reading the order dated 10.04.2026.
9. It will not be out of place to reproduce relevant part of reasoning given by Hon’ble the Supreme Court, vide order dated 10.04.2026:
“22. Since the High Courts have primarily quashed the reassessment notices on the ground that the JAOs lacked competence to initiate such proceedings, and the very foundation of that view now stands altered by the amending legislation, the impugnedjudgments in favor of the assessees are set aside on this limited ground. The matters are accordingly remitted to the respective High Courts for fresh consideration. Ordered accordingly.
The assessees are granted liberty to amend their writ petitions, ifso advised, within a period offour (4) weeks from the date of uploading of this order, so as to enable them to lay challenge to Section 147A of the IT Act, as introduced by Act No. 4 of 2026, or to any other connected or consequential provision.
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27. Finally, during the pendency of the writ petitions before the High courts, there shall be an interim stay of further assessment/reassessment proceedings pursuant to the impugned notices, subject to such terms and conditions as may be imposed by the High Courts.”
(Emphasis supplied)
10. Above part of the judgment of Hon’ble the Supreme Court more particularly paragraph no. 22 ibid leaves no manner of ambiguity that the appeals filed by the Union of India alone were allowed, only to the limited extent of setting aside of the judgements of the High Court on account of subsequent legislative amendment introduced under Section 147A of the Act, however, with a liberty to the assessees to amend the writ petitions before respective High Court to challenge the retrospectivity or otherwise of the amendment introduced vide Act no. 4 of 2026.
11. So far as the present petition is concerned, the writ petition had been dismissed by this Court and whatever little remained to be argued has been washed away by the introduction of the above referred amendment. We are, therefore, of the considered opinion that the application filed by the petitioner is misconceived. The same is, therefore, rejected.
