Facts of the Case

The petitioner challenged the reassessment proceedings initiated by the Income Tax Department for Assessment Year (AY) 2019–20. The challenge was directed against:

  • Order dated 30.07.2022 passed under Section 148A(d)
  • Notice dated 31.07.2022 issued under Section 148
  • Earlier notice dated 07.06.2021 under Section 148
  • Intimation dated 23.05.2022 under Section 148A(b)

The reassessment proceedings were triggered based on a survey conducted on 22.12.2020, which had also led to reassessment proceedings for earlier assessment years (AYs 2013–14 to 2017–18).

The petitioner contended that similar issues had already been examined in prior years and even in scrutiny/regular assessments for AY 2018–19 and AY 2020–21.

 Issues Involved

  1. Whether notice issued under Section 148A(b) was invalid due to reliance on the Supreme Court judgment in Union of India vs Ashish Aggarwal.
  2. Whether reassessment proceedings were sustainable when similar issues had been examined or dropped in earlier assessment years.
  3. Whether the Assessing Officer (AO) failed to consider relevant material and past assessment records before passing the order under Section 148A(d).

 Petitioner’s Arguments

  • The notice under Section 148A(b) was unsustainable in law as it incorrectly relied on the judgment in Union of India vs Ashish Aggarwal.
  • Limitation for AY 2019–20 had not expired (would expire on 31.03.2023), hence benefit of the said judgment could not be invoked.
  • Reassessment was based on identical issues already examined in earlier years (AYs 2013–14 to 2017–18).
  • Similar issues were also scrutinized in AY 2018–19 and AY 2020–21.
  • The AO failed to consider petitioner’s detailed reply dated 13.06.2022 before passing order under Section 148A(d).

Respondent’s Arguments

  • The notice under Section 148A(b) was valid, as limitation had not expired.
  • Reference to Ashish Aggarwal judgment does not invalidate the notice.
  • After 01.04.2021, reassessment proceedings must follow the new regime under Section 148A, which was duly complied with.
  • Since no assessment order had yet been passed for AY 2019–20, the AO was entitled to consider material independently.

 Court’s Findings / Order

  • The Court held that notice under Section 148A(b) is valid, as limitation had not expired and it was issued under the new statutory regime.
  • Mere reference to Ashish Aggarwal judgment does not render the notice invalid.
  • However, the Court accepted the petitioner’s contention that:
    • Similar issues had been examined in earlier years
    • The AO must consider past records before proceeding

 Important Clarification by Court

  • Rule of res judicata does not apply in income tax matters (each AY is separate).
  • However, where issues are identical across years, principle of consistency must be followed.
  • Reliance placed on:
    • Radhasoami Satsang v CIT (1992) 193 ITR 321 (SC)

Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/RAS31052023CW75342023_171758.pdf

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