2025 (4) TMI 269 - AT - Income Tax

Reassessment proceedings u/s 148 beyond period of limitation - treatment to notices issued on 01.04.2021 and 30.06.2021 following the extended time line provided under Taxation and Other Laws (Relaxation and Amendment of Certain provisions) Act 2020 is short called TOLA - HELD THAT - Admittedly in the present case the case of the assessee was reopened keeping in view the Apex Court decision passed inASHISH AGARWAL 2022 (5) TMI 240 - SUPREME COURT . We find substance in the argument of the Ld. Counsel of the assessee is that the case be restored into the file of AO for a fresh decision keeping in view the recent judgment ofRAJEEV BANSAL 2024 (10) TMI 264 - SUPREME COURT (LB) Accordingly the order passed by the AO confirmed by the Ld. CIT(A) are hereby set aside. The appeal of the assessee restored into the file of AO with a direction to pass afresh order. Appeal filed by the assessee is allowed for statistical purposes.

ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment include:

Whether the reopening of the assessee's case under Section 147 of the Income Tax Act was valid, considering the subsequent Supreme Court decision in the case of Union of India & Ors. Vs. Rajib Bansal.
Whether the assessment order passed by the Assessing Officer (AO) based on the Supreme Court's earlier decision in Union of India & Ors. Vs. Asish Agarwal was appropriate.

ISSUE-WISE DETAILED ANALYSIS

Reopening of the Case under Section 147

Relevant legal framework and precedents: The reopening of the case was initiated under Section 147 of the Income Tax Act, which allows for reassessment of income if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment. The case was reopened following the Supreme Court's decision in Union of India & Ors. Vs. Asish Agarwal, which initially guided the AO's actions.
Court's interpretation and reasoning: The Tribunal noted that the reopening was based on the Supreme Court's decision in the Asish Agarwal case. However, subsequent to this, the Supreme Court in Union of India & Ors. Vs. Rajib Bansal provided a concrete finding that resolved controversies surrounding reassessment proceedings under Section 148, particularly those notices issued under the extended timeline provided by TOLA.
Key evidence and findings: The Tribunal found that the reopening of the case was influenced by the earlier Supreme Court decision, but the later judgment in the Rajib Bansal case provided new legal context that needed consideration.
Application of law to facts: The Tribunal applied the principles from the Rajib Bansal case to determine that the reopening under Section 147 needed reconsideration in light of the new Supreme Court decision.
Treatment of competing arguments: The Tribunal acknowledged the argument from the assessee's counsel that the case should be reconsidered by the AO in light of the new Supreme Court decision. The Revenue did not object to this suggestion.
Conclusions: The Tribunal concluded that the case should be restored to the AO for a fresh decision, taking into account the Supreme Court's decision in the Rajib Bansal case.

SIGNIFICANT HOLDINGS

The Tribunal held that the assessment order passed by the AO, which was initially based on the Supreme Court's decision in the Asish Agarwal case, should be set aside. The Tribunal emphasized the need to consider the subsequent Supreme Court decision in the Rajib Bansal case.
Core principles established: The judgment underscores the importance of applying the most current legal standards and precedents, especially when higher courts provide new interpretations that affect ongoing or completed proceedings.
Final determinations on each issue: The appeal by the assessee was allowed for statistical purposes, with the direction that the AO reassess the case in light of the Supreme Court's decision in the Rajib Bansal case. This effectively means that the earlier assessment order is vacated, and a new order must be passed considering the updated legal framework.

In conclusion, the Tribunal's decision reflects the dynamic nature of legal interpretation, especially in tax law, where higher court decisions can significantly alter the landscape of ongoing assessments and disputes. The Tribunal's approach ensures that the assessee's case is evaluated under the most relevant legal standards, promoting fairness and consistency in tax administration.

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