25-July-2025 Income Tax >> Tax Laws  

This judgment of Savitri Steels and Rerollings Pvt Ltd. , Vesrus The Assistant Commissioner of Income Tax addresses a batch of writ petitions challenging notices issued under Section 148A or assessment orders passed under Section 147 of the Income Tax Act, 1961. These provisions relate to the reopening of income tax assessments.

Key Issue and Precedent:

The core issue in all these petitions is whether the Income Tax Department's actions, specifically the issuance of reassessment notices, were legally valid. The counsel for all parties in the present cases concurred that the matter is squarely covered by a previous Division Bench order of the same High Court in W.P.No.26304 of 2024, dated April 28, 2025.

 

 

Ruling in the Precedent Case (W.P.No.26304 of 2024)

The earlier judgment in W.P.No.26304 of 2024 had quashed similar reassessment notices and consequential orders. This decision was in line with a consistent stand taken by numerous High Courts, which found the Income Tax Department's actions to be violative of the Finance Act, 2020, and Finance Act, 2021.

The High Court in the precedent case had specifically held that:

• The impugned notices and proceedings were illegal and unsustainable due to procedural flaws and lack of jurisdiction.
• As a consequence, all consequential orders passed under Sections 147 and 148 were also quashed.
• The Court clarified that its decision was based solely on this jurisdictional issue, leaving other potential arguments open for future appropriate proceedings.
• Importantly, the High Court noted that the Revenue's right to proceed further was reserved, consistent with the Supreme Court's "one-time measure" in the case of Ashish Agarwal, which allowed the Revenue to proceed under substituted provisions.

Condition for the Present Disposal:

The High Court in the precedent case, and consequently in the present batch of petitions, made it clear that its decision to quash the notices and orders is subject to the outcome of Special Leave Petitions (SLPs) filed by the Income Tax Department before the Supreme Court. Specifically, the decision is contingent on the outcome of SLP No. 3574 of 2024, which challenges the High Court's earlier decision in Kankanala Ravindra Reddy v. Income-Tax Officer.

This means that if the Supreme Court rules in favor of the Income Tax Department in the pending SLP, either party may seek a revival of these writ petitions.

Conclusion of the Present Case:

Given the consensus among the counsels and the clear precedent, the High Court disposed of the current batch of writ petitions (W.P.Nos.21601, 21641, 21643, 21685, 21612, 21622, and 21635 of 2025) in terms of its order dated April 28, 2025, in W.P.No.26304 of 2024.

Therefore, the reassessment notices under Section 148A and assessment orders under Section 147 challenged in these petitions are set aside/quashed, along with any consequential orders. This decision is, however, conditional on the final ruling of the Supreme Court in the related SLP.

No costs were awarded in these petitions, and any pending miscellaneous applications were closed.

Section 147, Income Tax Act - 1961  

Section 148, Income Tax Act - 1961  

Income Tax Act, 1961