Facts of the Case

The petitioner challenged the initiation of reassessment proceedings for Assessment Year 2014-15 by issuance of notice dated 19 July 2022 under Section 148 of the Income-tax Act, 1961, pursuant to an order passed under Section 148A(d).

The petitioner had filed the original return declaring income of ₹2,29,80,740/-, which was assessed under Section 143(3) on 30 December 2016. On the basis of information from the Investigation Wing alleging that the petitioner had benefited to the extent of ₹3.07 crores through misuse of the NSEL platform, reassessment proceedings were initiated earlier by notice dated 31 March 2021. The reassessment proceedings were concluded by an order dated 30 March 2022, making additions and determining total income at ₹5,43,20,297/-.

While the appeal against the reassessment order dated 30 March 2022 was pending before the Commissioner (Appeals), the Assessing Officer issued a fresh show cause notice under Section 148A(b) on 02 June 2022 on the same material and allegations, followed by an order under Section 148A(d) and a fresh notice under Section 148 dated 19 July 2022.

 

Issues Involved

Whether reassessment proceedings can be initiated again on the same material after earlier reassessment has already been completed.

Whether the Supreme Court decision in Union of India v. Ashish Agarwal permits reopening of concluded reassessment proceedings.

Whether the impugned notice amounts to impermissible double reassessment.

Whether reassessment initiated on identical reasons suffers from lack of jurisdiction.

 

Petitioner’s Arguments

The petitioner contended that the reassessment proceedings for AY 2014-15 had already culminated in a final order dated 30 March 2022 and that initiation of fresh reassessment proceedings on identical material was impermissible in law.

It was argued that the reliance placed by the Revenue on Ashish Agarwal was misconceived, as the said judgment does not mandate reopening of concluded assessments. The petitioner submitted that the impugned reassessment amounted to double addition on the same alleged escapement of income and was therefore void ab initio.

 

Respondent’s Arguments

The Revenue contended that the notice issued under Section 148 dated 31 March 2021 was deemed to be a show cause notice under Section 148A(b) in view of the Supreme Court decision in Ashish Agarwal. It was argued that the subsequent proceedings initiated in July 2022 were in compliance with the procedure laid down by the Supreme Court.

The Revenue submitted that the reassessment was validly initiated in accordance with the amended reassessment regime.

 

Court Order / Findings

The Delhi High Court allowed the writ petition and quashed the impugned order under Section 148A(d) and the consequent notice under Section 148 dated 19 July 2022. The Court held that:

The reassessment proceedings had already been concluded by an order dated 30 March 2022.

The fresh reassessment was initiated on the same set of reasons and material, which is impermissible in law.

The decision in Ashish Agarwal was intended to salvage pending reassessment notices and does not mandate reopening of concluded assessments.

Reliance on Ashish Agarwal to reopen completed reassessment proceedings is legally unsustainable.

The Court followed its earlier decision in Anindita Sengupta v. ACIT and reiterated that the Supreme Court judgment cannot be read as authorising reopening of matters that had already attained finality.

 

Important Clarification

The judgment conclusively clarifies that:

Completed reassessment proceedings cannot be reopened again on the same material.

The ruling in Ashish Agarwal applies only to cases where reassessment proceedings were pending and had not attained finality.

Re-initiation of reassessment on identical reasons amounts to lack of jurisdiction and is liable to be quashed.

The Income-tax Department cannot invoke the amended reassessment regime to disturb concluded proceedings.

This decision reinforces the principle of finality in tax proceedings and limits the scope of reassessment under the post-2021 regime.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1770203364_SATISHCHANDJAINVsASSISTANTCOMMISSIONEROFINCOMETAXCIRCLE521DELHIANR..pdf  

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