Yes

Remove tile. Do not to remove soffit. Build cabinets to the bottom of soffit. Provide a 3/4 inch reveal between the two.

Daniel @ artgreeT.com

If you are doing a recreation of a 50s kitchen keep the soffit. If you are doing a modern updated design remove it and you can use taller cabints, to the ceiling. It will look nicer and you'll have a bit more storage space—and who doesn't need more storage space? The only caveat is to make sure there are no mechanicals in the soffit such as HVAC ducts.

Disfromage is absolutely right. If you want to do a kitchen that looks original to the house, keep the soffit.

Sometimes they would hide wire runs or HVAC runs in those, so make sure that's not the case before you start tearing it out and then have to replace it to hide something.

Always the first question is what is in the soffit. The kitchen in these pics had soffits with all kinds of electrical running in them and I decided to save my clients money and kept them but totally modernized the whole kitchen.