DCIT Vs Shiv Vegpro Private Limited (ITAT Jaipur)
Jaipur ITAT: Rajasthan HC Judgment Quashing Reassessment Attains Finality After Supreme Court Dismisses Revenue’s SLP-Dismissal on Delay Does Not Help Revenue
The Jaipur ITAT dismissed the Revenue’s appeal and upheld the CIT(A)’s decision quashing reassessment proceedings under Section 147, since the reassessment had already been quashed by the Rajasthan High Court in the assessee’s own case and the Revenue’s SLP against that judgment had subsequently been dismissed by the Supreme Court.
The AO had completed reassessment by making an addition of ₹6.39 crore under Section 68, treating certain sales transactions as non-genuine and in the nature of accommodation entries. The assessee simultaneously challenged the reassessment proceedings before the Rajasthan High Court. By order dated 25.11.2024, the High Court allowed the writ petition and quashed the assessment order. Following the jurisdictional High Court’s judgment, the CIT(A) allowed the assessee’s appeal.
Before the ITAT, the Revenue argued that it had challenged the High Court judgment by filing an SLP before the Supreme Court and, therefore, the CIT(A) should not have treated the High Court decision as conclusive. However, the assessee pointed out that the Supreme Court had already dismissed the Revenue’s SLP on 12.09.2025. The Department admitted the dismissal but argued that it was only on account of delay and not on merits.
The Tribunal rejected this contention. It held that once the Revenue’s SLP had been dismissed, the Rajasthan High Court judgment had attained finality and continued to hold the field. The fact that the SLP was dismissed on the ground of delay did not improve the Revenue’s case. The CIT(A) could not be faulted for following a binding judgment of the jurisdictional High Court rendered in the assessee’s own case.
Accordingly, the ITAT found no infirmity in the CIT(A)’s order, dismissed all grounds raised by the Revenue and consequently dismissed the Revenue’s appeal.
Key principle: A Revenue challenge does not dilute the binding effect of a jurisdictional High Court judgment. Once the SLP against that judgment is dismissed, the High Court ruling continues to govern the assessee’s case; the Revenue cannot avoid its application merely by contending that the SLP was dismissed on limitation rather than merits.
Cases Discussed
