Reassessment Set 8
[Section 148 to 151 (from 01-01-2025 till 30-06-2025)]
71
“Change of Opinion on Expense Nature Invalidates Reassessment:”
Ratnagiri Gas and Power (P.) Ltd. v. ACIT [(2025) 174 taxmann.com 331 (Delhi)]
W.P.(C) No. 5901 of 2021, decided on 2 May 2025
(i) Issue Decided by the Court
Whether the reassessment notice issued under Section 148 for AY 2016–17 is sustainable when the material relied upon (audit objections and accounting entries) was already available during original assessment, and reopening is initiated merely due to re-characterisation of expenses (capital vs. revenue), thereby amounting to change of opinion.
(ii) Facts Relating to the Issue
The assessee, a public sector undertaking, had filed return for AY 2016–17 claiming revenue expenditure of ₹13.23 crore relating to a settlement payment made to a contractor (DGA). This payment was scrutinized in detail during the original assessment under Section 143(3), and the AO had accepted the claim. Subsequently, based on audit objections and internal notes, a reassessment notice was issued under Section 148 on 29 March 2021, alleging that the said expenditure should have been capitalized instead of being claimed as revenue expense.
(iii) Arguments of the Appellant (Assessee) in Brief
The expenditure in question was fully disclosed and examined during the original assessment.
The AO had raised queries, received detailed responses, and consciously accepted the claim.
Reopening on the same issue without new tangible material amounts to a change of opinion, which is impermissible.
Reassessment initiated after 4 years requires failure to disclose material facts, which was not the case.
(iv) Arguments of the Respondent (Revenue) in Brief
The expenditure was wrongly treated as revenue in nature, causing income to escape assessment.
The audit party flagged this mischaracterisation and recommended disallowance.
Therefore, reassessment was justified under Section 147.
(v) Decision of the Court
The Delhi High Court quashed the reassessment proceedings, holding that the reopening was invalid and constituted a change of opinion. The reassessment notice under Section 148 was set aside.
(vi) Reasoning Given by the Court for its Decision
All material facts including the expenditure details were fully disclosed and examined.
The AO had raised queries regarding the nature of the expense and accepted it post-application of mind.
There was no fresh tangible material to justify reopening.
The Court reaffirmed that change of opinion is not a permissible ground for reassessment, citing the binding precedent of CIT v. Kelvinator of India Ltd. [(2010) 320 ITR 561 (SC)].
The audit objection cannot substitute the AO's independent belief or constitute new material.
(vii) Judgment Relied Upon
CIT v. Kelvinator of India Ltd. [(2010) 320 ITR 561 (SC)]
(viii) Circumstances Where This Judgment Can Be Applied
Where reassessment is initiated after 4 years, and the Revenue fails to establish non-disclosure of material facts.
In cases involving reclassification of already disclosed expenditure (e.g., capital vs. revenue).
Where audit objections form the sole basis of reopening without independent application of mind.
When the AO has already considered the issue in the original assessment.
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72
“Reassessment Quashed for Breach of Limitation: Section 149 Time Bar”
ADM Agro Industries Latur and Vizag (P.) Ltd. v. ACIT [(2025) 174 taxmann.com 725 (Delhi)]
W.P.(C) No. 4583 of 2023, decided on 06.05.2025
(i) Issue Decided by the Court
Whether the reassessment notice issued under Section 148 on 20.07.2022 for AY 2013–14 is barred by limitation under the amended Section 149 of the Income-tax Act, 1961, considering the extension granted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) and the directions of the Supreme Court in Ashish Agarwal and Rajeev Bansal.
(ii) Facts Relating to the Issue
The AO issued an original notice under Section 148 (old regime) on 30.06.2021, the last day permitted under the extended limitation granted by TOLA.
In light of the Supreme Court judgment in Ashish Agarwal, this notice was treated as a deemed notice under Section 148A(b).
The AO furnished the relevant material to the assessee on 25.05.2022, and the assessee replied on 09.06.2022.
Subsequently, an order under Section 148A(d) was passed on 19.07.2022, and a fresh notice under Section 148 was issued on 20.07.2022.
The assessee challenged the validity of the notice as being time-barred.
(iii) Arguments of the Appellant (Assessee) in Brief
The limitation for issuance of notice under Section 148 had expired on 16.06.2022, even after excluding permissible periods under TOLA and the Ashish Agarwal judgment.
The impugned notice dated 20.07.2022 was beyond the extended limitation period.
Thus, the notice and subsequent proceedings were without jurisdiction and deserved to be quashed.
(iv) Arguments of the Respondent (Revenue) in Brief
The period between 30.06.2021 and 04.05.2022 (date of Ashish Agarwal judgment) must be excluded from limitation computation.
Further exclusion was sought for the time provided to the assessee to respond to the 148A(b) notice.
The AO acted within the permissible extended time, considering these judicial relaxations.
(v) Decision of the Court
The Delhi High Court allowed the writ petition, holding that the reassessment notice under Section 148 issued on 20.07.2022 was barred by limitation, having been issued beyond the permissible time under Section 149 read with the TOLA Act and the Supreme Court's binding judgments.
(vi) Reasoning Given by the Court for Its Decision
The notice dated 30.06.2021 was the last permissible day under TOLA.
As per Ashish Agarwal, this was deemed a 148A(b) notice, and material was required to be provided within 30 days.
As clarified in Rajeev Bansal, time from 30.06.2021 to 04.05.2022 and the time allowed for the assessee’s response must be excluded.
Even after such exclusions, the last date for issuing notice was 16.06.2022.
Since the final notice was issued on 20.07.2022, it was beyond limitation, hence void.
The Court reaffirmed that jurisdiction to reopen assessments must strictly conform to statutory timelines, and any failure vitiates the proceedings.
(vii) Judgements Relied Upon
Ram Balram Buildhome (P.) Ltd. v. ITO [(2025) 171 taxmann.com 99 (Delhi)]
Union of India v. Ashish Agarwal [(2022) 138 taxmann.com 64 (SC)]
Union of India v. Rajeev Bansal [(2024) 167 taxmann.com 70 (SC)]
(viii) Circumstances Where This Judgement Can Be Applied
Where reassessment notices are issued post-30.06.2021 under old regime and converted to 148A(b) notices.
In cases involving transition period reassessments, governed by Ashish Agarwal and TOLA.
Where AO fails to issue final Section 148 notice within the computed limitation after exclusions under Provisos to Section 149(1).
Especially relevant in litigation regarding AYs 2013–14 and 2014–15 due to limitation expiry issues.
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73
ACIT v. Manish Financial – 2024 (12) TMI 1539 – ITAT Mumbai
ITAT Mumbai Quashes Time-Barred and Improperly Sanctioned Reassessment Notices Post-Ashish Agrawal Regime”
(i) Issue Decided by the Court:
Whether the reassessment notices issued under Section 148 for AYs 2015–16 and 2016–17 were valid under the new regime of Income-tax Act, 1961, specifically with reference to limitation and procedural approvals under amended Sections 147, 148, 148A, and 151.
(ii) Facts Relating to the Issue:
For AY 2015–16, notice u/s 148 was issued on 29.07.2022 based on alleged fictitious loss in equity derivatives.
For AY 2016–17, notice u/s 148 dated 30.07.2022 followed proceedings under Ashish Agrawal judgment.
Assessee challenged both notices on grounds of time-bar (Section 149) and improper approval (Section 151).
(iii) Arguments of the Appellant (Revenue):
Argued that reassessment notices were within limitation as extended by TOLA.
Claimed approvals were properly obtained from authorities under then-applicable regime.
(iv) Arguments of the Defendant (Assessee):
For AY 2015–16: Time limit expired under the old regime; notice issued after 6 years is invalid under first proviso to amended Section 149.
For AY 2016–17: Notice issued without mandatory approval from Principal Chief Commissioner under Section 151(ii), making it jurisdictionally invalid.
(v) Decision of the Court:
For AY 2015–16: Notice u/s 148 was barred by limitation under the amended Section 149(1) and hence invalid.
For AY 2016–17: Approval was obtained from Pr. CIT instead of the Pr. Chief Commissioner as mandated by amended Section 151(ii), hence reassessment invalid.
(vi) Reasoning Given by the Court:
Applied the ratio of the Rajeev Bansal (SC) judgment: the ten-year limit under amended Section 149 applies only prospectively.
Approval must follow new Section 151 authority rules post-01.04.2021, especially for cases older than three years.
Procedural non-compliance with jurisdictional preconditions renders reassessment void ab initio.
(vii) Full Citation of the Judgment Relied Upon by the Court:
Union of India vs. Rajeev Bansal, 2024 (10) TMI 264 (SC)
Union of India vs. Ashish Agrawal, 2022 (5) TMI 240 (SC)
ITO vs. Pushpak Realities Pvt. Ltd., 2024 (11) TMI 763 (ITAT Mumbai)
(viii) Circumstances Where This Judgment Can Be Applied:
When reassessment notices are issued after 6 years for AYs prior to 2021-22.
When approval under amended Section 151(ii) is not taken from the correct authority.
Where TOLA is wrongly invoked to justify time-barred notices under the new regime.
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74
Anil Hari Inamdar v. DCIT [2025 (1) TMI 506 - ITAT Nagpur]
“Invalid Reopening and Deemed Income Without Real Gain”
(i) Issue decided by the Court
Whether the reopening of assessment under Section 148 and addition under Section 69 of the Income Tax Act on account of unexplained investment is valid in the absence of verification and reasonable belief of income escapement.
(ii) Facts relating to the issue
The assessee, a senior citizen and salaried teacher, invested ₹15.50 lakh with the Wasankar Group—a fraudulent entity. The AO reopened the assessment under Section 148 based on mere information of this investment and added the amount as unexplained investment under Section 69. The assessee claimed that the investment was made from legitimate withdrawals from his bank accounts.
(iii) Arguments of the Appellant in Brief
Investment was from past and current bank withdrawals (around ₹25 lakh).
Entire investment was lost; no real income accrued.
Cited CIT v. P.K. Noorjahan, Bokaro Steel Ltd., and Excel Industries Ltd. to argue that deemed income cannot be taxed when there’s no real income.
Assessment reopening without proper verification is invalid.
(iv) Arguments of the Respondent in Brief
The CIT(A) justified the reopening.
Partial addition of ₹13 lakh sustained due to insufficient linkage of withdrawals to the investment.
Claimed burden of proof not discharged satisfactorily.
(v) Decision of the Court
The ITAT allowed the appeal, quashed the notice under Section 148, and deleted the addition of ₹13 lakh under Section 69, holding the reopening and addition both invalid and unsustainable.
(vi) Reasoning Given by the Court
AO issued notice under Section 148 without verifying whether assessee lacked funds.
Explanation and bank records submitted by the assessee were not disproved.
No real income arose; investment was lost.
The “belief” of income escapement must be based on facts and verification—not mere suspicion or third-party information.
(vii) Full Citation of Judgments Relied Upon
CIT v. P.K. Noorjahan [1997 (1) TMI 6 - SC]
CIT v. Bokaro Steel Ltd. [1998 (12) TMI 4 - SC]
CIT v. Excel Industries Ltd. [2013 (10) TMI 324 - SC]
(viii) Circumstances Where This Judgment Can Be Applied
Reopenings under Section 148 based solely on unverified third-party information.
Where investments have been made from explained sources, especially when linked to prior withdrawals.
When there is no real income due to fraud or loss.
When addition under Section 69 is made without proper inquiry or rebuttal of evidence submitted by the assessee.
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75
Validity of Income Tax Notices Issued Post-Demerger under Section 148A
Sonansh Creations Pvt Ltd v. ACIT- 2025 (1) TMI 600 - HC
(i) Issue Decided by the Court:
Whether a reassessment notice under Section 148A(d) issued to a non-existent entity (i.e., Sonansh Creations Pvt. Ltd., after its merger into another company) is valid in law.
(ii) Facts Relating to the Issue:
Sonansh Creations Pvt. Ltd. amalgamated with Sonansh Infrastructure Pvt. Ltd. as per NCLT order dated 21.06.2022 with effect from 01.04.2019. However, the Income Tax Department issued a notice under Section 148A(b) to Sonansh Creations Pvt. Ltd. on 23.05.2023, alleging income escapement for AY 2016–17. The petitioner contended that the notice was issued to a non-existent entity.
(iii) Arguments of the Appellant (Petitioner):
· The reassessment proceedings were initiated against an entity that had legally ceased to exist post-merger.
· Issuance of notice against a dissolved company violates the principle laid down in Maruti Suzuki Ltd. and other precedents.
· The amalgamated company was never served or made a party. Hence, the reassessment lacks jurisdiction.
(iv) Arguments of the Defendant (Respondent – Revenue):
· The merger was not reported to the department at the time of reassessment.
· Revenue acted based on information available on record and had no knowledge of the dissolution of Sonansh Creations Pvt. Ltd.
· The omission was procedural and does not vitiate the proceedings.
(v) Decision of the Court:
The Bombay High Court quashed the reassessment notice under Section 148A(d) and all consequential proceedings. The Court held that a notice issued to a non-existent company is void ab initio.
(vi) Reasoning Given by the Court:
· The Court relied on the ratio in PCIT vs. Maruti Suzuki India Ltd. (2019), which categorically held that issuance of notice to a non-existent entity is invalid even if the merger is not known to the department.
· Knowledge or lack thereof of the amalgamation is immaterial once the legal existence of the company ceases.
· The Revenue’s contention that the procedural lapse was curable was rejected.
(vii) Full Citation of the Judgment Relied Upon by the Court:
· PCIT vs. Maruti Suzuki India Ltd. (2019) 416 ITR 613 (SC)
· Also followed: CIT vs. Spice Enfotainment Ltd. (2017) 247 Taxman 527 (SC)
(viii) Circumstances Where This Judgment Can Be Applied:
· Where reassessment notices are issued post-merger or amalgamation.
· When Revenue proceeds against an entity no longer legally in existence.
· In disputes where notice under Section 148A(b)/(d) is challenged for jurisdictional lapses due to corporate restructuring.
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76
“Concurrent Use of Section 70 Summons During Adjudication Upheld”
M/s Patran Foods Pvt Ltd, Monika Gupta, Rajiv Aggarwal & Tara Corporation v UOI – 2025 (1) TMI 702 – HC
(i) Issue decided by the Court
Whether the issuance of summons under Section 70 of the CGST Act, 2017 during the pendency of proceedings under Sections 73 or 74 amounts to abuse of process, and whether such summons can be quashed.
(ii) Facts relating to the issue
The petitioners were subjected to summons under Section 70 of the CGST Act despite the pendency of adjudication proceedings under Sections 73/74. They contended that the repeated summons caused harassment, and the department already had access to the required documents.
(iii) Arguments of the appellant in brief
· Issuance of summons after initiation of adjudication violates principles of natural justice.
· Repeated summons amount to harassment.
· The department is misusing Section 70 powers.
· No need for further enquiry when matter is sub judice under Sections 73/74.
(iv) Arguments of the defendant in brief
· Summons are part of a statutory mechanism to gather evidence.
· Section 70 empowers proper officers to summon any person during an enquiry.
· Ongoing adjudication does not bar parallel investigation or information gathering.
· The petition is premature and devoid of merit.
(v) Decision of the Court
The High Court dismissed the petition, holding that issuance of summons under Section 70 is legally permissible even during adjudication under Section 73/74. It declined to quash the summons.
(vi) Reasoning given by the Court for its decision
· Section 70 is an independent investigatory tool and its usage is not barred by other proceedings.
· The petitioners were not able to show any mala fide intent or abuse of power by authorities.
· Investigating authority has a wide scope for enquiry and cannot be pre-emptively restrained.
· Summons are procedural and part of legitimate evidence-gathering process.
(vii) Circumstances where this judgement can be applied
· When taxpayers challenge summons during GST investigation.
· In matters where adjudication and investigation proceed simultaneously.
· For determining the validity of summons under Section 70 of CGST Act.
· Where allegations of harassment via summons are raised without clear mala fide.
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77
“Disallowance of Commission under Section 69C—Rejection without Rebuttal Unjustified”
Matchless Infrastructure Pvt. Ltd. v. ITO 2025 (1) TMI 866 - ITAT DELHI
(i) Issue Decided by the Court:
Whether the addition made under Section 69C of the Income Tax Act, 1961 on the ground of unexplained expenditure for commission payments was justified, despite the existence of evidence showing the genuineness of such expenditure.
(ii) Facts Relating to the Issue:
The assessee, Matchless Infrastructure Pvt. Ltd., had claimed commission expenditure in its profit and loss account. The Assessing Officer (AO) doubted the genuineness of such expenditure and made additions under Section 69C. The CIT(A) upheld the addition. The assessee appealed before the ITAT.
(iii) Arguments of the Appellant (Assessee):
· The assessee had duly submitted confirmation letters from the commission agents.
· TDS was deducted and deposited.
· The payment was made via banking channels.
· The services were rendered and linked to revenue generation.
· No opportunity for cross-examination of commission agents was granted.
(iv) Arguments of the Respondent (Revenue):
· The AO contended that the commission agents were not traceable.
· The genuineness of services rendered was not conclusively proved.
· Lack of response to summons indicated the possibility of bogus transactions.
(v) Decision of the Court:
The ITAT allowed the appeal of the assessee and deleted the addition under Section 69C. It held that the burden of proof was discharged by the assessee through documentary evidence, and failure of the Revenue to rebut it meant the addition could not be sustained.
(vi) Reasoning Given by the Court:
· The payment was made through banking channels and subjected to TDS provisions.
· Confirmations and PAN details of agents were available on record.
· In the absence of any contrary evidence, the disallowance was unjustified.
· The AO did not bring any material to prove that the payments were bogus.
· No cross-examination of agents was offered.
(vii) Circumstances Where This Judgment Can Be Applied:
· When addition is made under Section 69C due to lack of personal verification despite existing documentary evidence.
· When TDS compliance, banking proof, and agent confirmations are furnished.
· In cases where denial of cross-examination violates natural justice.
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78
“Ten-Year Time Bar and Jurisdictional Failure Invalidates Reassessment”
Mahender Kumar Jain and Kamlesh Jain v. ACIT 2025 (1) TMI 976 – Delhi HC
(i) Issue Decided by the Court:
Whether the reassessment notice issued under Section 148 of the Income Tax Act for AY 2015–16 is barred by limitation under the applicable provisions, especially Section 153C read with the amended Section 149.
(ii) Facts Relating to the Issue:
The petitioners challenged a reassessment notice dated 30.08.2024 issued under Section 148 for AY 2015–16. The contention was that it was issued beyond the permissible time limit of 10 years as per the First Proviso to Section 149(1), introduced by the Finance Act, 2021. The Assessing Officer (AO) had prepared a satisfaction note dated 23.08.2024, approved on 29.08.2024, but it was not by the AO of the “searched person,” which is a precondition under Section 153C.
(iii) Arguments of the Appellant (Petitioners):
· The initiation of reassessment is time-barred since AY 2015–16 falls beyond the 10-year window from the end of the relevant AY.
· The AO of the searched person did not prepare the satisfaction note, violating Section 153C requirements.
· Reliance was placed on precedents like Dinesh Jindal, Ojjus Medicare, and Jasjit Singh, which clarify limitation periods post-Finance Act, 2021.
(iv) Arguments of the Defendant (Revenue):
· The satisfaction note prepared by the AO (not of the searched person) was within time.
· They attempted to justify limitation using the date of satisfaction note and placing of material on the Insight portal.
· But during proceedings, Revenue concurred with the limitation computation presented by the petitioners.
(v) Decision of the Court:
The Delhi High Court held that the reassessment proceedings were time-barred under Section 153C read with the amended Section 149. The impugned notice dated 30.08.2024 and all proceedings pursuant thereto were set aside.
(vi) Reasoning Given by the Court:
· Under the amended law, for reassessment post-01.04.2021 involving searches, limitation must be computed with reference to the satisfaction note prepared by the AO of the searched person.
· Since this statutory requirement was not fulfilled and the 10-year limit from FY 2015–16 expired, reassessment was invalid.
· The Court reiterated precedents (like Dinesh Jindal, SSP Aviation, RRJ Securities, Jasjit Singh) emphasizing the importance of date of handover of material and jurisdictional compliance.
(vii) Judgments Relied Upon:
· Dinesh Jindal v. ACIT: 2024:DHC:4554-DB
· Ojjus Medicare Pvt. Ltd. v. Pr. CIT: 2024:DHC:2629-DB
· CIT v. Jasjit Singh: 2023 SCC OnLine SC 1265
· SSP Aviation Ltd. v. DCIT: 2012 (4) TMI 335
(viii) Circumstances Where This Judgement Can Be Applied:
· Reassessment proceedings under Section 148 involving search or requisition post-01.04.2021.
· Cases where AO of the searched person has not recorded satisfaction under Section 153C.
· Where limitation is computed under the First Proviso to Section 149 (as amended by Finance Act, 2021).
· Assessments against "other persons" not directly searched.
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79
“Invalid Reassessment for Want of Proper Sanction”
Davos International Fund C/o Harel Mallac Global Services Ltd. v. ACIT [2025 (1) TMI 1052 - ITAT Mumbai]
(i) Issue Decided by the Court:
Whether the reassessment notice issued under Section 148 of the Income Tax Act, 1961, was valid when the prior approval was not obtained from the correct authority as mandated under Section 151(ii).
(ii) Facts Relating to the Issue:
The assessee, a SEBI-registered Foreign Portfolio Investor based in Mauritius, was alleged to have earned bogus Long Term Capital Gains (LTCG) in shares of Kushal Ltd. based on a search in the Kushal Group. The Assessing Officer (AO) initiated reassessment proceedings under Section 147, issued a notice under Section 148 dated 04.04.2022, but obtained prior approval from the Commissioner of Income Tax (CIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT), which is mandated under Section 151(ii) for reassessment beyond three years.
(iii) Arguments of the Appellant in Brief:
· Approval for notice under Section 148 should have been obtained from PCCIT as reassessment was initiated beyond 3 years.
· The approval from CIT (IT) was legally insufficient.
· The fifth proviso to Section 149, which was used by Revenue to extend limitation, came into effect only from 01.04.2023 and is not retrospectively applicable.
(iv) Arguments of the Defendant in Brief (Revenue):
· The time given to the assessee for reply under Section 148A(b) should be excluded from computing the 3-year limitation, thus keeping the case within the 3-year window.
· Hence, approval by CIT (IT) was valid under Section 151(i).
· Relied on provisos to Sections 149 and 151 inserted later to justify computation.
(v) Decision of the Court:
The ITAT ruled in favor of the assessee. It held that:
· Approval was not obtained from the appropriate authority (PCCIT) as required under Section 151(ii).
· The notice issued under Section 148 was invalid.
· Reassessment under Section 147 r.w.s. 144C(13) is quashed.
(vi) Reasoning Given by the Court for Its Decision:
· Citing the Bombay High Court decisions, especially Vodafone Idea Ltd. (2024), the tribunal held that the amendment to Section 149/151 cannot be applied retrospectively.
· The AO’s reliance on the fifth proviso to Section 149 was erroneous since it was inserted on 01.04.2023, whereas the reassessment pertained to AY 2018–19.
· Without valid prior sanction from PCCIT, the notice was unsustainable in law.
(vii) Judgments Relied Upon by the Court for Its Decision:
· Vodafone Idea Ltd. v. DCIT [2024 (2) TMI 1408 - Bombay High Court]
· Siemens Financial Services Pvt. Ltd. v. DCIT [2023 (9) TMI 552 - Bombay High Court]
· Holiday Developers Pvt. Ltd. v. ITO [2024 (8) TMI 286 - Bombay High Court]
· Agnello Oswin Dias v. ACIT [2024 (8) TMI 180 - Bombay High Court]
(viii) Circumstances Where This Judgment Can Be Applied:
· Reassessment proceedings initiated beyond 3 years without proper sanction from PCCIT.
· Where retrospective application of Section 149/151 amendments is being wrongly invoked by AO.
· Cases involving Foreign Portfolio Investors (FPIs) alleging bogus LTCG.
· When approvals under Section 148A(d)/148 are questioned on procedural legality.
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80
“Invalid Reassessment during Pending Rectification”
M/s Vimoni India Pvt. Ltd. vs DCIT Circle 17(1), New Delhi” [2025 (1) TMI 1123 - ITAT Delhi
(i) Issue Decided by the Court:
Whether initiation of reassessment proceedings under Section 148 of the Income Tax Act is valid when rectification proceedings under Section 154, based on the same grounds, were already pending.
(ii) Facts Relating to the Issue:
The Assessing Officer (AO) had issued a notice under Section 154 for rectifying certain issues arising out of tax audit reports. Before disposing of the Section 154 proceedings, the AO issued a notice under Section 148 to reopen the assessment on the same grounds. The assessee challenged the reopening on the ground that two parallel proceedings cannot be initiated on the same issues.
(iii) Arguments of the Appellant in Brief:
The assessee argued that the reasons recorded under Section 148 were identical to those under Section 154.
Initiating proceedings under Section 148 while Section 154 proceedings were pending is beyond the jurisdiction of the AO.
It amounted to a change of opinion without any fresh material, making the reassessment invalid.
(iv) Arguments of the Defendant (Revenue) in Brief:
The Department defended the reopening under Section 148 as valid and argued that the reassessment was properly approved and initiated.
(v) Decision of the Court:
The ITAT Delhi quashed the reassessment proceedings initiated under Section 148, holding them to be bad in law due to the pendency of Section 154 proceedings on the same subject matter.
(vi) Reasoning Given by the Court for Its Decision:
Citing the Supreme Court’s ruling in S.M. Overseas Pvt. Ltd. (2022), the ITAT held that two simultaneous proceedings under Sections 154 and 147/148 cannot be sustained.
Since Section 154 proceedings were pending and not withdrawn, initiating Section 148 proceedings on the same issues was invalid and beyond jurisdiction.
(vii) Judgment Relied Upon:
S.M. Overseas Pvt. Ltd. vs. CIT, 2022 (12) TMI 702 - SC Order
(viii) Circumstances Where This Judgment Can Be Applied:
Where Section 148 proceedings are initiated while rectification under Section 154 is pending.
When the reassessment is based on the same reasons as those mentioned in pending rectification proceedings.
To prevent the Revenue from bypassing statutory remedies through parallel actions.