Bombay HC Quashes Reassessment and Notices as Illegal and Arbitrary

Arunkumar Mahabirprasad Jatia Vs ACIT (Bombay High Court)

The Bombay High Court quashed the impugned order under Section 147A(d) and the notice under Section 148 for AY 2016-17, holding them wholly without jurisdiction, illegal, and arbitrary. The petition followed the reasoning in Karan Maheshwari v. ACIT, emphasizing that the reassessment proceedings were invalid.

As a result, the reassessment order dated 31st March 2024, which was based on the quashed 148A(d) order, was also invalidated. The Court disposed of the petition, confirming that any action relying on an order already set aside cannot survive. The decision reinforces that reassessment actions must strictly comply with statutory provisions to be valid.

Read SC Judgment: SC Dismisses Delayed SLP, Upholds Quashing of Reassessment Notices

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

1. Mr. Agarwal states that the facts and issues in this petition will be covered by the judgment of this court in Karan Maheshwari Vs. Assistant Commissioner of Income Tax, Central Circle 8(4) & Ors.¹ Mr. Suresh Kumar agrees.

2. Therefore, petition allowed in terms of prayer clause (a), which reads as under:

“(a) issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction under Article 226 of the Constitution of India, quashing the impugned order u/s 147A(d) dated 24^th April 2023(Exhibit O) the impugned notice u/s 148 dated 24^th April 2023 (Exhibit P) and the impugned reassessment proceedings for AY-2016-17 as being wholly without jurisdiction, illegal and arbitrary.”

3. Mr. Suresh Kumar states that after the petition was filed, a reassessment order dated 31^st March 2024 has been passed based on the order under Section 148A(d) of the Income Tax Act 1961 (the Act) dated 24^th April 2023. Since we have quashed and set aside the order under Section 148A(d) of the Act dated 24^th March 2023, the reassessment order based on a notice issued under Section 148 relying on the quashed order also cannot survive. Therefore, reassessment order dated 31^st March 2024 is also quashed and set aside.