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2024 (4) TMI 96 - DELHI HIGH COURTValidity of reassessment proceedings - scope of new regime u/s 148A - As per revenue as decided in Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] held that all reassessment notices issued after 01 April 2021 would be treated as notices referable to clause (b) of Section 148A and the procedure prescribed therein being followed thereafter - respondents thus read Ashish Agarwal as mandating the aforesaid procedure being liable to be followed irrespective of the stage of the reassessment proceedings and thus extending even to situations where final orders may have come to be passed on culmination of reassessment. According to the petitioner, the judgment in Ashish Agarwal only sought to cure the procedural defects which beset notices issued after 01 April 2021 and where the Department proceeded on the assumption that it would be the unamended reassessment provisions which would apply and the directions in Ashish Agarwal were merely intended to validate such notices and cannot possibly be read or construed as warranting the reopening of reassessment proceedings which had attained finality even though the same may have been commenced on the basis of notices issued post 01 April 2021. HELD THAT:- We are of the firm opinion that Ashish Agarwal neither intended nor mandated concluded assessments being reopened. The respondent clearly appears to have erred in proceedings along lines contrary to the above as would be evident from the reasons which follow. Firstly, Ashish Agarwal was principally concerned with judgments rendered by various High Courts’ striking down Section 148 notices holding that the respondents had erred in proceeding on the basis of the unamended family of provisions relating to reassessment. They had essentially held that it was the procedure constructed in terms of the amendments introduced by Finance Act, 2021 which would apply. None of those judgements were primarily concerned with concluded assessments. It is this indubitable position which constrained the Supreme Court to frame directions requiring those notices to be treated as being under Section 148A(b) and for the AO proceeding thereafter to frame an order as contemplated by Section 148A(d) of the Act. Our view of the judgement being confined to proceedings at the stage of notice is further fortified from the Supreme Court providing in para 8 of the report that “The respective impugned Section 148 notices issued to the respective assessees shall be deemed to have been issued under section 148A of the Income Tax Act as substituted by Finance Act, 2021 and treated to be show cause notices in terms of Section 148A(b).” As would be manifest from the aforesaid extract, the emphasis clearly was on the notices which formed the subject matter of challenge before various High Courts’ and the aim of the Supreme Court being to salvage the process of reassessment. This is further evident from the Supreme Court observing that the AO would thereafter proceed to pass orders referable to Section 148A(d). We consequently find ourselves unable to construe Ashish Agarwal as an edict which required completed assessments to be invalidated and reopened. Ashish Agarwal cannot possibly be read as mandating the hands of the clock being rewound and reversing final decisions which may have come to be rendered in the interregnum. The petitioner never questioned the validity of the original notices on grounds which were urged before the various High Courts and where assessees had questioned the invocation of the unamended provisions. The petitioner chose to contest the reassessment proceedings on merits. It is also admitted before us that the petitioner was also not a party to the Man Mohan Kohli batch of matters. There was therefore no justification for the respondent to have issued notices afresh seeking to reopen proceedings which had been rendered a closure prior to the judgment rendered in Ashish Agarwal. At the cost of being repetitive we deem it appropriate to observe that the Ashish Agarwal judgment neither spoke of completed assessments nor did it embody any direction that could be legitimately or justifiably construed as mandating completed assessments being reopened and moreso where the assessee had raised no objection to the initiation of proceedings. We are also of the firm opinion that even para 25.5 of Ashish Agarwal would not sustain the stand taken by the respondent since the same clearly confines itself to decisions or judgments rendered by a High Court invalidating a notice under Section 148 and the manifest intent of the Supreme Court being that its judgment would apply and govern irrespective of whether an appeal had been laid before it. We also bear in mind the pertinent observations rendered by the Constitution Bench in High Court Bar Association [2024 (3) TMI 63 - SC ORDER] when it held that a direction under Article 142 of the Constitution should not impact the substantive rights of those litigants who are not even parties to the lis - Thus we quash reassessment proceedings and impugned SCN issued u/s 148A(b), the order issued u/s 148A(d) as well as the notice referable to Section 148 - Decided in favour of assessee.
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