Reassessment of Concluded Assessments Not Permissible Without New Information: Delhi High Court Curtails Tax Authority’s Reach
The Delhi High Court pronounced a crucial verdict, holding that the Income Tax Department cannot reopen concluded assessments under Section 148 of the Income Tax Act, absent new grounds or information, relying on the Supreme Court’s ruling in Union of India v. Ashish Agarwal. The reassessment notices issued to Ms. Akshita Jindal for the Assessment Year 2015-16 were declared invalid and subsequently quashed.
Legal Context and Facts
The focal point of the dispute was whether reassessment proceedings for a previously concluded assessment year could be reinitiated based on the apex court’s decision. The petitioner, Akshita Jindal, contended against the notices issued under Sections 148, 148A(b), and 148A(d) post her final assessment. The initial reassessment notice was followed by an order adding substantial amounts to the petitioner’s income citing undisclosed penny stock transactions.
Detailed Judicial Analysis
Hon’ble Mr. Justice Purushaindra Kumar Kaurav and Hon’ble Mr. Justice Yashwant Varma meticulously reviewed the legislative intent behind the reassessment provisions. Justice Kaurav clarified, “Reassessment proceedings already concluded cannot be re-opened based on the same information which was already assessed, under the cover of the Supreme Court’s Ashish Agarwal decision.”
Referencing Anindita Sengupta v. ACIT, the Court observed that the procedures stipulated by Ashish Agarwal applied strictly to ongoing, non-finalized proceedings, thus not extending to closed cases. The bench criticized the department’s reinitiation of proceedings on the same grounds as those addressed in the original final assessment order, marking it as a significant overreach.
Conclusion and Implications
The ruling underscores the judiciary’s stance on limiting retrospective reassessment unless new evidence or discrepancies are unearthed post the original assessment. The impugned notices and the order under Section 148A(d) were quashed, reinforcing the boundaries of lawful administrative action in tax reassessment cases.
Date of Decision: May 1, 2024
Akshita Jindal vs. Income Tax Officer Ward 54(1) Delhi & Ors
