Facts of the Case

The petitioner, UPES, challenged the reassessment proceedings initiated by the Revenue 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 under Section 148
  • Earlier notice dated 07.06.2021 under Section 148
  • Intimation dated 23.05.2022 treated as notice under Section 148A(b)

The reassessment proceedings originated from a survey conducted on 22.12.2020 involving the petitioner and other entities. Based on the survey, reassessment had already been triggered for earlier assessment years (AYs 2013–14 to 2017–18).

The petitioner contended that similar issues had already been examined in:

  • Earlier reassessment proceedings (which were dropped)
  • Regular assessment for AY 2018–19
  • Scrutiny assessment for AY 2020–21

 Issues Involved

  1. Whether notice issued under Section 148A(b) is invalid due to incorrect reliance on the Supreme Court judgment in Union of India vs Ashish Aggarwal?
  2. Whether reassessment proceedings can be initiated on issues already examined and dropped in earlier assessment years?
  3. Whether the Assessing Officer is required to consider past assessments and apply the principle of consistency?

Petitioner’s Arguments

  • The notice under Section 148A(b) was legally unsustainable as reliance on Ashish Aggarwal judgment was misplaced.
  • Limitation for AY 2019–20 had not expired (ending on 31.03.2023), hence extended timelines under the said judgment were not applicable.
  • The reassessment was based on issues already examined in earlier years and subsequent assessments.
  • The Assessing Officer failed to consider the petitioner’s detailed reply dated 13.06.2022 before passing the order under Section 148A(d).

 Respondent’s Arguments

  • The notice under Section 148A(b) was valid since limitation had not expired.
  • Mere reference to Ashish Aggarwal judgment does not invalidate the notice.
  • Since no final assessment order had been passed for AY 2019–20, the Assessing Officer was entitled to proceed and examine the matter independently.

Court’s Findings / Order

  • The Court upheld the validity of notice under Section 148A(b), stating that limitation had not expired.
  • It held that mere reference to the Supreme Court judgment does not render the notice invalid.
  • However, the Court accepted the petitioner’s contention regarding consistency.
  • The Assessing Officer must consider records of earlier assessment years where similar issues were examined and proceedings were dropped.
  • The AO must apply the principle of consistency before passing the assessment order.
  • A personal hearing must be granted to the petitioner.
  • A speaking order must be passed addressing all relevant aspects.

 

Important Clarification

  • The rule of res judicata does not apply to income tax proceedings (each AY is separate).
  • However, where facts and issues are identical across years, consistency must be maintained.
  • Reliance placed on:
    Radhasoami Satsang v CIT (1992) 193 ITR 321 (SC)

Sections Involved

  • Section 147 – Income Escaping Assessment
  • Section 148 – Issue of Notice for Reassessment
  • Section 148A(b) – Show Cause Notice before Reassessment
  • Section 148A(d) – Order for Initiation of Reassessment
  • Income Tax Act, 1961

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS26052023CW73772023_173207.pdf

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