Tewatia Construction Private Limited Vs DCIT ( ITAT Delhi)
Delhi ITAT: Second Section 148 Notice During Pendency of Earlier Reassessment Is Invalid; Reassessment Quashed
The Delhi ITAT dealt with a jurisdictional challenge to reassessment proceedings. The assessee had already been issued a notice u/s 148 dated 13.04.2023, pursuant to which reassessment proceedings remained pending. While those proceedings were still alive, the Department issued another notice u/s 148 on 21.03.2024 for the very same assessment year.
The assessee contended that two reassessment proceedings for the same assessment year cannot simultaneously subsist, and that a fresh reassessment could not be initiated without first bringing the earlier proceedings to a valid end.
The Tribunal relied upon the Delhi High Court decision in CIT v. Sanjay Kumar Garg, which held that where assessment or reassessment proceedings are already pending, the AO cannot issue another notice u/s 148. A fresh reassessment can be initiated only when no assessment/reassessment proceeding is pending. The Tribunal also noted reliance on the Gujarat High Court ruling in Marwadi Shares and Finance Ltd. v. DCIT (2018) 304 CTR 899.
Significantly, the Departmental Representative could not dispute either the factual position or the legal proposition. The ITAT therefore sustained the assessee’s additional jurisdictional ground, allowed the appeal and quashed the impugned reassessment order.
Key takeaway: A second reassessment cannot be initiated for the same assessment year while an earlier reassessment proceeding remains pending. The Department must first validly conclude the existing proceedings before issuing a fresh section 148 notice.
Cases Discussed
- Marwadi Shares and Finance Ltd. Vs. DCIT (Gujarat High Court), Special Civil Application No. 17698/2017 order dated 07.03.2018 (2018) 304 CTR 899
- CIT Vs. Sanjay Kumar Garg (Delhi High Court), ITA No. 92/2012 order dated 02.09.2015
- Nilofer Hameed v. Income Tax Officer (Kerala High Court), [1999] 235 ITR 161 (Ker)
FULL TEXT OF THE ORDER OF ITAT DELHI
