ITO Vs United Associates (Supreme Court of India)
The matter relates to Assessment Year 2016–17 and concerns repeated attempts by the tax authorities to reopen an assessment that had already attained finality. The assessee had filed its return declaring an income of ₹19.75 lakh, which was scrutinised and accepted without any additions by an order dated 27 December 2018 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961.
Read Delhi HC Judgment: Reassessment Quashed as Completed Assessment Had Attained Finality: Delhi HC
Subsequently, the Revenue initiated reassessment proceedings by issuing a notice dated 31 March 2021 under Section 148. The assessee complied, filed objections, and participated in the proceedings. These reassessment proceedings culminated in an order dated 31 March 2022 passed under Section 147 read with Section 144B, once again accepting the returned income on merits. Thus, both the original assessment and the subsequent reassessment stood completed in favour of the assessee.
Despite this, the Revenue issued yet another notice dated 30 May 2022 under Section 148A(b), followed by an order under Section 148A(d) and a fresh notice under Section 148 dated 28 June 2022. The justification advanced was that, in light of the Supreme Court decision in Union of India v. Ashish Agarwal, earlier reassessment notices issued during the extended limitation period were to be treated as non est, thereby permitting initiation of fresh proceedings.
