Facts of the Case

A search operation was conducted under Section 132 in a connected group case.

Based on the search, proceedings were earlier initiated under Section 153C, which were quashed by appellate authorities due to absence of incriminating material.

After the Supreme Court’s decision in Abhisar Buildwell, the Department issued fresh reassessment notices under Section 148, relying on CBDT Instruction No. 1/2023.

The reassessment pertained to completed/unabated assessment years, long past the normal limitation period.

 

Issues Involved

Whether reassessment under Sections 147/148 can be initiated for completed assessments without incriminating material.

Whether observations in Abhisar Buildwell constitute a “finding or direction” under Section 150 to bypass limitation.

Whether CBDT Instruction No. 1/2023 can override statutory limitation under Section 149.

 

Petitioner’s Arguments

The Supreme Court in Abhisar Buildwell did not issue any binding direction mandating reassessment.

A casual observation that reassessment may be permissible “if allowed by law” cannot extend limitation.

Section 150 applies only when there is a specific finding or direction, which was absent.

Reassessment beyond limitation violates Article 265 of the Constitution.

CBDT instructions cannot override statutory provisions.

 

Respondent’s Arguments (Revenue)

The Supreme Court preserved the right of reassessment under Sections 147/148.

CBDT Instruction No. 1/2023 mandates uniform implementation of Abhisar Buildwell.

Section 150 permits reopening notwithstanding limitation.

Revenue would otherwise be left remediless.

 

Court’s Findings & Legal Analysis

The Delhi High Court categorically held:

Abhisar Buildwell does NOT constitute a “finding or direction” under Section 150.

Liberty to reassess “if permissible under law” does not override limitation.

Completed/unabated assessments cannot be reopened merely because Section 153 proceedings failed.

Incriminating material is a jurisdictional prerequisite for search-linked reassessment.

CBDT Instruction No. 1/2023 cannot expand statutory powers or dilute limitation safeguards.

Section 147 reassessment must independently satisfy:

Limitation under Section 149

Conditions under Section 148A

Existence of legally sustainable “reason to believe”

 

Important Clarifications by the Court

Section 150 applies only where reassessment is necessary to give effect to a judicial finding, not a general observation.

Failure of search assessments does not revive time-barred reassessment powers.

Administrative instructions cannot create jurisdiction where none exists.

 

Final Outcome

Reassessment notices issued under Section 148 were quashed
 Proceedings held to be barred by limitation
 CBDT Instruction No. 1/2023 declared inapplicable to override statutory safeguards
 Strong reaffirmation of taxpayer protection against arbitrary reassessment

Link to download the order - https://www.mytaxexpert.co.in/uploads/1770191565_ANKUSHSALUJAVsDEPUTYCOMMISSIONEROFINCOMETAXCENTRALCRICLE5DELHIANR..pdf 

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